1. ANTONIO A. MECANO, petitioner, vs. COMMISSION ON AUDIT, respondent.
t. Mecano Administrative Code of 1917; Allowances in case of injury, death or sickness incurred in performance
vs. Commission on Audit, 216 SCRA 500, G.R. No. 103982 December 11, 1992
Statutes; Administrative Code of 1987; Implied repeal.—In the case of the two Administrative Codes
in question, the ascertainment of whether or not it was the intent of the legislature to supplant the old
Code with the new Code partly depends on the scrutiny of the repealing clause of the new Code.
This provision is found in Section 27, Book VII (Final Provisions) of the Administrative Code of 1987
which reads: “Sec. 27. Repealing Clause.—All laws, decrees, orders, rules and regulations, or
portions thereof, inconsistent with this Code are hereby repealed or modified accordingly.” The
question that should be asked is: What is the nature of this repealing clause? It is certainly not an
express repealing clause because it fails to identify or designate the act or acts that are intended to
be repealed. Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, S.
1991. It is a clause which predicates the intended repeal under the condition that a substantial
conflict must be found in existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency and
repugnancy exist in the terms of the new and old laws. This latter situation falls under the category of
an implied repeal.
Same; Same; Same.—There are two categories of repeal by implication. The first is where provisions
in the two acts on the same subject matter are in an irreconcilable conflict, the later act to the extent
of the conflict constitutes an implied repeal of the earlier one. The second is if the later act covers the
whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the
earlier law. Implied repeal by irreconcilable inconsistency takes place when the two statutes cover
the same subject matter; they are so clearly inconsistent and incompatible with each other that they
cannot be reconciled or harmonized; and both cannot be given effect, that is, that one law cannot be
enforced without nullifying the other. Comparing the two Codes, it is apparent that the new Code
does not cover nor attempt to cover the entire subject matter of the old Code. There are several
matters treated in the old Code which are not found in the new Code, such as the provisions on
notaries public, the leave law, the public bonding law, military reservations, claims for sickness
benefits under Section 699, and still others.
Same; Same; Same.—Lastly, it is a well-settled rule of statutory construction that repeals of statutes
by implication are not favored. The presumption is against inconsistency and repugnancy for the
legislature is presumed to know the existing laws on the subject and not to have enacted inconsistent
or conflicting statutes. This Court, in a case, explains the principle in detail as follows: “Repeals by
implication are not favored, and will not be decreed unless it is manifest that the legislature so
intended. As laws are presumed to be passed with deliberation with full knowledge of all existing
ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to some matter, unless the repugnancy between
the two is not only irreconcilable, but also clear and convincing, and flowing necessarily from the
language used, unless the later act fully embraces the subject matter of the earlier, or unless the
reason for the earlier act is beyond peradventure renewed. Hence, every effort must be used to
make all acts stand and if, by any reasonable construction, they can be reconciled, the later act will
not operate as a repeal of the earlier.
of duty; Payment of compensation under Employees’ Compensation Program does not bar recovery
under Sec. 699 of the Revised Administrative Code.—Regarding respondent’s contention that
recovery under this subject section shall bar the recovery of benefits under the Employees’
Compensation Program, the same cannot be upheld. The second sentence of Article 173, Chapter II,
Title II (dealing on Employees’ Compensation and State Insurance Fund), Book IV of the Labor
Code, as amended by P.D. 1921, expressly provides that “the payment of compensation under this
Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised
Administrative Code x x x whose benefits are administered by the system (meaning SSS or GSIS) or
by other agencies of the government.” Mecano vs. Commission on Audit, 216 SCRA 500, G.R. No.
103982 December 11, 1992
2. PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO,
petitioners, vs. INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES &
CIVIL AERONAUTICS ADMINISTRATION, respondents.
Contracts; Interpretation; Public Officers; Rule that mistakes of government personnel should not
affect public interest.—The billing of the petitioners by the Accounting Department of the CAA if
indeed it transpired, after the cancellation of Contract “A” is obviously an error. However, this Court
has already ruled that the mistakes of government personnel should not affect public interest. In San
Mauricio Mining Company v. Aricheta (105 SCRA 391, 422), it has been held that as a matter of law
rooted in the protection of public interest, and also as a general policy to protect the government and
the people, errors of government personnel in the performance of their duties should never deprive
the people of the right to rectify such error and recover what might be lost or be bartered away in any
actuation, deal or transaction concerned. In the case at bar, the lower court in its decision which has
been affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the amount of
rentals which was not due from them with 6% interest per annum until fully paid.
Same; Same; Statutory Construction; When the words and language of documents is clear and plain
or readily understandable by an ordinary reader thereof, there is absolutely no room for interpretation
or construction anymore.—In Contract “A”, it was categorically stated that it is the lessee (petitioner)
who will manage and operate the gasoline station. The fact that Mobil Oil was mentioned in that
contract was clearly not intended to give approval to a sublease between petitioners and said
company but rather to insure that in the arrangements to be made between them, it must be
understood that after the expiration of the lease contract, whatever improvements have been
constructed in the leased premises shall be relinquished to CAA. Thus, this Court held that “the
primary and elementary rule of construction of documents is that when the words or language thereof
is clear and plain or readily understandable by any ordinary reader thereof, there is absolutely no
room for interpretation or construction anymore.” (San Mauricio Mining Company v. Ancheta, supra).
Same; Same; Same; Administrative Law; Under 567 of the Revised Administrative Code, the Civil
Aeronautics Administration has the authority to enter into Contracts of Lease for the government.—
Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the
President of the Philippines, or (2) by an officer duly designated by him or (3) by an officer expressly
vested by law. It is readily apparent that in the case at bar, the Civil Aeronautics Administration has
the authority to enter into Contracts of Lease for the government under the third category. Thus, as
correctly ruled by the Court of Appeals, the Civil Aeronautics Administration has the power to execute
the deed or contract involving leases of real properties belonging to the Republic of the Philippines,
not because it is an entity duly designated by the President but because the said authority to execute
the same is, by law expressly vested in it.
Same; Same; Same; Same; General legislation must give way to special legislation on the same
subject.—In this regard, this Court ruled that another basic principle of statutory construction
mandates that general legislation must give way to special legislation on the same subject, and
generally be so interpreted as to embrace only cases in which the special provisions are not
applicable (Sto. Domingo v. De los Angeles, 96 SCRA 139), that specific statute prevails over a
general statute (De Jesus v. People, 120 SCRA 760) and that where two statutes are of equal
theoretical application to a particular case, the one designed therefor specially should prevail (Wil
Wilhensen, Inc. v. Baluyot, 83 SCRA 38).
3. LUZON DEVELOPMENT BANK, petitioner, vs. ASSOCIATION OF LUZON
DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her capacity as
VOLUNTARY ARBITRATOR, respondents.
Labor Law; Arbitration; Words and Phrases; “Arbitration,” Defined.—In labor law context, arbitration
is the reference of a labor dispute to an impartial third person for determination on the basis of
evidence and arguments presented by such parties who have bound themselves to accept the
decision of the arbitrator as final and binding.
Same; Same; Same; Arbitration may be classified as either compulsory or voluntary.—Arbitration
may be classified, on the basis of the obligation on which it is based, as either compulsory or
voluntary.
Same; Same; Same; “Compulsory Arbitration,” Explained .—Compulsory arbitration is a system
whereby the parties to a dispute are compelled by the government to forego their right to strike and
are compelled to accept the resolution of their dispute through arbitration by a third party. The
essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested
third party whose decision is final and binding on the parties, but in compulsory arbitration, such a
third party is normally appointed by the government.
Same; Same; Same; “Voluntary Arbitration,” Explained.—Under voluntary arbitration, on the other
hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their
collective agreement, to an impartial third person for a final and binding resolution.
Same; Same; Collective Bargaining Agreements; In the Philippine context, the parties to a Collective
Bargaining Agreement are required to include therein provisions for a machinery for the resolution of
grievances arising from the interpretation or implementation of the CBA or company personnel
policies.—In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are
required to include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. For this purpose, parties
to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or include
a procedure for their selection, preferably from those accredited by the National Conciliation and
Mediation Board (NCMB).
Same; Same; Administrative Law; The voluntary arbitrator, whether acting solely or in a panel, enjoys
in law the status of a quasijudicial agency but independent of, and apart from, the NLRC since his
decisions are not appealable to the latter.—In Volkschel Labor Union, et al. v. NLRC, et al., on the
settled premise that the judgments of courts and awards of quasi-judicial agencies must become final
at some definite time, this Court ruled that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as judgments of a court. In Oceanic Bic
Division (FFW), et al. v. Romero, et al., this Court ruled that “a voluntary arbitrator by the nature of
her functions acts in a quasi-judicial capacity.” Under these rulings, it follows that the voluntary
arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter.
Same; Same; Same; Words and Phrases; Governmental “Agency” or “Instrumentality,” Explained.—
An “instrumentality” is anything used as a means or agency. Thus, the terms governmental “agency”
or “instrumentality” are synonymous in the sense that either of them is a means by which a
government acts, or by which a certain government act or function is performed. The word
“instrumentality,” with respect to a state contemplates an authority to which the state delegates
governmental power for the performance of a state function.
Same; Same; B.P. 129; Jurisdiction; Appeals; The voluntary arbitrator performs a state function
pursuant to a governmental power delegated to him under the provisions therefor in the Labor Code
and he falls, therefore, within the contemplation of the term “instrumentality” in Sec. 9 of B.P. 129.—
The voluntary arbitrator no less performs a state function pursuant to a governmental power
delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the
contemplation of the term “instrumentality” in the aforequoted Sec 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor Code does not place him within the exceptions to
said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that,
although the Employees Compensation Commission is also provided for in the Labor Code, Circular
No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid down
the procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
Same; Same; Same; Same; Same; The decision or award of the voluntary arbitrator or panel of
arbitrators should be appealed to the Court of Appeals.—A fortiori, the decision or award of the
voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in
line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the
quasi-judicial agencies, boards and commissions enumerated therein.
Arbitration Law (RA 876); Under the Arbitration Law, the award or decision of the voluntary arbitrator
is equated with that of the Regional Trial Courts.—In the same vein, it is worth mentioning that under
Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed a
special proceeding of which the court specified in the contract or submission, or if none be specified,
the Regional Trial Court for the province or city in which one of the parties resides or is doing
business, or in which the arbitration is held, shall have jurisdiction. A party to the controversy may, at
any time within one (1) month after an award is made, apply to the court having jurisdiction for an
order confirming the award and the court must grant such order unless the award is vacated,
modified or corrected. In effect, this equates the award or decision of the voluntary arbitrator with that
of the regional trial court. Consequently, in a petition for certiorari from that award or decision, the
Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As a
matter of policy, this Court shall henceforth remand to the Court of Appeals
4. IRON AND STEEL AUTHORITY, petitioner, vs. THE COURT OF APPEALS and MARIA
CRISTINA FERTILIZER CORPORATION, respondents.
Actions; Parties; Pleadings and Practice; Those who can be parties to a civil action may be broadly
categorized into two (2) groups—i.e., persons, whether natural or juridical, and, entities authorized by
law.—Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action: “Section
1. Who May Be Parties.—Only natural or juridical persons or entities authorized by law may be
parties in a civil action.” Under the above quoted provision, it will be seen that those who can be
parties to a civil action may be broadly categorized into two (2) groups: (a) those who are recognized
as persons under the law whether natural, i.e., biological persons, on the one hand, or juridical
persons such as corporations, on the other hand; and (b) entities authorized by law to institute
actions.
Administrative Law; Government Owned and Controlled Corporations; Government Agencies and
Instrumentalities; The Iron and Steel Authority (ISA) appears to be a non-incorporated agency or
instrumentality of the Republic of the Philippines, or more precisely of the Government of the
Republic of the Philippines.—Clearly, ISA was vested with some of the powers or attributes normally
associated with juridical personality. There is, however, no provision in P.D. No. 272 recognizing ISA
as possessing general or comprehensive juridical personality separate and distinct from that of the
Government. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality
of the Republic of the Philippines, or more precisely of the Government of the Republic of the
Philippines. It is common knowledge that other agencies or instrumentalities of the Government of
the Republic are cast in corporate form, that is to say, are incorporated agencies or instrumentalities,
sometimes with and at other times without capital stock, and accordingly vested with a juridical
personality distinct from the personality of the Republic.
Same; Same; Same; Words and Phrases; The term “Authority” has been used to designate both
incorporated and non-incorporated agencies or instrumentalities of the Government.—It is worth
noting that the term “Authority” has been used to designate both incorporated and non-incorporated
agencies or instrumentalities of the Government. Same; Same; Same; Agency; The ISA is an agent
or delegate of the Republic, while the Republic itself is a body corporate and juridical person vested
with the full panoply of powers and attributes which are compendiously described as “legal
personality.”—We consider that the ISA is properly regarded as an agent or delegate of the Republic
of the Philippines. The Republic itself is a body corporate and juridical person vested with the full
panoply of powers and attributes which are compendiously described as “legal personality.”
Same; Same; Same; Same; When the statutory term of a non-incorporated agency expires, the
powers, duties and functions as well as the assets and liabilities of that agency revert back to, and
are reassumed by, the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof.—When the statutory term of a non-incorporated agency
expires, the powers, duties and functions as well as the assets and liabilities of that agency revert
back to, and are re-assumed by, the Republic of the Philippines, in the absence of special provisions
of law specifying some other disposition thereof such as e.g., devolution or transmission of such
powers, duties, functions, etc to some other identified successor agency or instrumentality of the
Republic of the Philippines. When the expiring agency is an incorporated one, the consequences of
such expiry must be looked for, in the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a non-
incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets and
liabilities are properly regarded as folded back into the Government of the Republic of the Philippines
and hence assumed once again by the Republic, no special statutory provision having been shown
to have mandated succession thereto by some other entity or agency of the Republic.
Actions; Parties; Eminent Domain; The expiration of ISA’s statutory term did not by itself require or
justify the dismissal of the eminent domain proceedings.—From the foregoing premises, it follows
that the Republic of the Philippines is entitled to be substituted in the expropriation proceedings as
party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the
expiration of ISA’s statutory term did not by itself require or justify the dismissal of the eminent
domain proceedings.
Same; Same; Same; Pleadings and Practice; The non-joinder of the Republic which occurred upon
the expiration of ISA’s statutory term was not a ground for dismissal of the expropriation
proceedings.—It is also relevant to note that the non-joinder of the Republic which occurred upon the
expiration of ISA’s statutory term, was not a ground for dismissal of such proceedings since a party
may be dropped or added by order of the court, on motion of any party or on the court’s own initiative
at any stage of the action and on such terms as are just. In the instant case, the Republic has
precisely moved to take over the proceedings as party-plaintiff.
Same; Same; Same; Administrative Law; The Republic may initiate or participate in actions involving
its agents.—In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, the Court
recognized that the Republic may initiate or participate in actions involving its agents. There the
Republic of the Philippines was held to be a proper party to sue for recovery of possession of
property although the “real” or registered owner of the property was the Philippine Ports Authority, a
government agency vested with a separate juridical personality. The Court said: “It can be said that
in suing for the recovery of the rentals, the Republic of the Philippines acted as principal of the
Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as
its agent. x x x”
Same; Same; Same; No new legislative act is necessary should the Republic decide, upon being
substituted for ISA, in fact to continue to prosecute the expropriation proceedings—the legislative
authority, a long time ago, enacted a continuing or standing delegation of authority to the President of
the Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the
Government.—While the power of eminent domain is, in principle, vested primarily in the legislative
department of the government, we believe and so hold that no new legislative act is necessary
should the Republic decide, upon being substituted for ISA, in fact to continue to prosecute the
expropriation proceedings. For the legislative authority, a long time ago, enacted a continuing or
standing delegation of authority to the President of the Philippines to exercise, or cause the exercise
of, the power of eminent domain on behalf of the Government of the Republic of the Philippines.
5. ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the
PEOPLE OF THE PHILIPPINES, respondents.**
Administrative Law; Schools and Universities; Statutes; P.D. 1341 did not abolish, but only changed,
the former Philippine College of Commerce into what is now the Polytechnic University of the
Philippines—what took place was a change in academic status of the educational institution, not in its
corporate life.—P.D. No. 1341 did not abolish, but only changed, the former Philippine College of
Commerce into what is now the Polytechnic University of the Philippines, in the same way that earlier
in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the
Philippine College of Commerce. What took place was a change in academic status of the
educational institution, not in its corporate life. Hence the change in its name, the expansion of its
curricular offerings, and the changes in its structure and organization.
Same; Same; Same; When the purpose is to abolish a department or an office or an organization
and to replace it with another one, the lawmaking authority says so.—As petitioner correctly points
out, when the purpose is to abolish a department or an office or an organization and to replace it with
another one, the lawmaking authority says so.
Same; Same; Same; Neither the addition of new course offerings nor changes in its existing structure
and organization bring about the abolition of an educational institution and the creation of a new
one—only an express declaration to that effect by the lawmaking authority will.—But these are hardly
indicia of an intent to abolish an existing institution and to create a new one. New course offerings
can be added to the curriculum of a school without affecting its legal existence. Nor will changes in its
existing structure and organization bring about its abolition and the creation of a new one. Only an
express declaration to that effect by the lawmaking authority will.
Same; Same; Same; Statutory Construction; Words and Phrases; “Stand transferred” simply means
that lands transferred to the PCC were to be understood as transferred to the PUP as the new name
of the institution.—The law does not state that the lands, buildings and equipment owned by the PCC
were being “transferred” to the PUP but only that they “stand transferred” to it. “Stand transferred”
simply means, for example, that lands transferred to the PCC were to be understood as transferred
to the PUP as the new name of the institution.
6. CESAR G. VIOLA, Chairman, Bgy. 167, Zone 15, District II, Manila, petitioner, vs.
HON. RAFAEL M. ALUNAN III, Secretary, DILG, ALEX L. DAVID, President/Secretary
General, National Liga ng mga Barangay, LEONARDO L. ANGAT, President, City of
Manila, Liga ng mga Barangay, respondents.
Actions; Moot and Academic Questions; Courts will decide a question which is otherwise moot and
academic if it is “capable of repetition, yet evading review.”—Although the elections are now over, the
issues raised in this case are likely to arise again in future elections of officers of the Liga ng mga
Barangay. For one thing, doubt may be cast on the validity of the acts of those elected. For another,
this comes within the rule that courts will decide a question which is otherwise moot and academic if
it is “capable of repetition, yet evading review.”
Municipal Corporations; Local Government Code; Barangays; The creation of additional positions in
the National Liga ng mga Barangay and its chapters is authorized by the Local Government Code.—
The post of executive vice president is in reality that of the vice president in §493 of the LGC, so that
the only additional positions created for each chapter in the Constitution and By-laws are those of
first, second and third vice presidents and auditor. Contrary to petitioner’s contention, the creation of
the additional positions is authorized by the LGC which provides as follows: §493. Organization. The
liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly
elect a president, a vice-president, and five (5) members of the board of directors. The board shall
appoint its secretary and treasurer and create such other positions as it may deem necessary for the
management of the chapter. A secretary-general shall be elected from among the members of the
national liga and shall be charged with the overall operation of the liga on the national level. The
board shall coordinate the activities of the chapters of the liga. (emphasis added)
Same; Same; Same; Delegation of Powers; That Congress can delegate the power to create
positions has been settled by previous decisions upholding the validity of reorganization statutes
authorizing the President of the Philippines to create, abolish or merge offices in the executive
department.—This provision in fact requires—and not merely authorizes—the board of directors to
“create such other positions as it may deem necessary for the management of the chapter” and
belies petitioner’s claim that said provision (§493) limits the officers of a chapter to the president, vice
president, five members of the board of directors, secretary, and treasurer. That Congress can
delegate the power to create positions such as these has been settled by our decisions upholding the
validity of reorganization statutes authorizing the President of the Philippines to create, abolish or
merge offices in the executive department. The question is whether, in making a delegation of this
power to the board of directors of each chapter of the Liga ng mga Barangay, Congress provided a
sufficient standard so that, in the phrase of Justice Cardozo, administrative discretion may be
“canalized within proper banks that keep it from overflowing.”
Same; Same; Same; Same; Section 493 of the Local Government Code, in directing the board of
directors of the liga to “create such other positions as may be deemed necessary for the
management of the chapter[s],” embodies a fairly intelligible standard—there is no undue delegation
of power by Congress.—Statutory provisions authorizing the President of the Philippines to make
reforms and changes in government owned or controlled corporations for the purpose of promoting
“simplicity, economy and efficiency” in their operations and empowering the Secretary of Education
to prescribe minimum standards of “adequate and efficient instruction” in private schools and
colleges have been found to be sufficient for the purpose of valid delegation. Judged by these cases,
we hold that §493 of the Local Government Code, in directing the board of directors of the liga to
“create such other positions as may be deemed necessary for the management of the chapter[s],”
embodies a fairly intelligible standard. There is no undue delegation of power by Congress.
Same; Same; Same; The Barangay National Assembly was actually the Pambansang Katipunan ng
mga Barangay or PKB, and pending the organization of the Liga ng mga Barangay, it served as the
Liga.—Pursuant to these provisions, pending the organization of the Liga ng mga Barangay, the
board of directors of the PKB was constituted into a committee, headed by the PKB president, who
acted as secretary general, with a two-fold mandate: “[1] exercise the powers and duties of the
national liga and [2] draft or amend the constitution and by-laws of the national liga to conform to the
provisions of this Rule.” The board of directors of the PKB, functioning in place of the board of
directors of the National Liga ng mga Barangay, exercised one of these powers of the National Liga
board, namely, to create additional positions which it deemed necessary for the management of a
chapter. There is therefore no basis for the claim that because the power to create additional
positions in the Liga or its chapters is vested only in the board of directors the exercise of this power
by the Barangay National Assembly is unauthorized and illegal and the positions created are void.
The Barangay National Assembly was actually the Pambansang Katipunan ng mga Barangay or
PKB. Pending the organization of the Liga ng mga Barangay, it served as the Liga.
Same; Same; Same; Since the board of directors of a local chapter can create additional positions to
provide for the needs of the chapter, the board of directors of the National Liga must be deemed to
have the power to create additional positions not only for its management but also for that of all the
chapters at the municipal, city, provincial and metropolitan political subdivision levels—the fact is that
§493 grants the power to create positions not only to the boards of the local chapters but to the board
of the Liga at the national level as well.—While the board of directors of a local chapter can create
additional positions to provide for the needs of the chapter, the board of directors of the National Liga
must be deemed to have the power to create additional positions not only for its management but
also for that of all the chapters at the municipal, city, provincial and metropolitan political subdivision
levels. Otherwise the National Liga would be no different from the local chapters. There would then
be only so many local chapters without a national one, when what is contemplated in the above-
quoted provisions of the LGC is that there should be one Liga ng mga Barangay with local chapters
at all levels of local government units. The dissent, by denying to the board of directors at the
National Liga the power to create additional positions in the local chapters, would reduce such board
to a board of a local chapter. The fact is that §493 grants the power to create positions not only to the
boards of the local chapters but to the board of the Liga at the national level as well.
Same; Same; Same; The creation by the board of the National Liga of the positions of first, second
and third vice presidents, audi tors and public relations officers was intended to provide uniform
officers for the various chapters in line with the mandate in Art. 210(g)(2) of the Rules and
Regulations Implementing the Local Government Code of 1991 to the Barangay National Assembly
to “formulate uniform constitution and by-laws applicable to the national liga and all local chapters.”—
Indeed what was done in the Constitution and By-laws of their liga was to create additional positions
in each chapter, whether national or local, without however precluding the boards of directors of the
chapters as well as that of the national liga from creating other positions for their peculiar needs. The
creation by the board of the National Liga of the positions of first, second and third vice presidents,
auditors and public relations officers was intended to provide uniform officers for the various chapters
in line with the mandate in Art. 210(g)(2) of the Rules and Regulations Implementing the Local
Government Code of 1991 to the Barangay National Assembly to “formulate uniform constitution and
by-laws applicable to the national liga and all local chapters.” The various chapters could have
different minor officers depending on their local needs, but they must have the same major elective
officers, meaning to say, the additional vice presidents and auditors.
Same; Same; Same; The additional positions to be created pursuant to the power granted by §493 of
the Local Government Code need not be limited to appointive positions.—The dissent further argues
that, following the rule of ejusdem generis, what may be created as additional positions can only be
appointive ones because the positions of secretary and treasurer are appointive positions. The rule
might apply if what is involved is the appointment of other officers. But what we are dealing with in
this case is the creation of additional positions. Section 493 actually gives the board the power to
“[1]appoint its secretary and treasurer and [2]create such other positions as it may deem necessary
for the management of the chapter.” The additional positions to be created need not therefore be
appointive positions.
Same; Same; Same; Management positions are not necessarily limited to appointive positions—
elective officers, such as the president and vice president, can be expected to be involved in the
general administration or management of the chapter.—Nor is it correct to say that §493, in providing
that additional positions to be created must be those which are “deemed necessary for the
management of the chapter,” contemplates only appointive positions. Management positions are not
necessarily limited to appointive positions. Elective officers, such as the president and vice president,
can be expected to be involved in the general administration or management of the chapter. Hence,
the creation of other elective positions which may be deemed necessary for the management of the
chapter is within the purview of §493.
7. LOUIS “BAROK” C. BIRAOGO, petitioner, vs. THE PHILIPPINE TRUTH COMMISSION OF
2010, respondent.
Public Officers; Philippine Truth Commission (PTC); Words and Phrases; Truth commissions have
been described as bodies that share the following characteristics: (1) they examine only past events;
(2) they investigate patterns of abuse committed over a period of time, as opposed to a particular
event; (3) they are temporary bodies that finish their work with the submission of a report containing
conclusions and recommendations; and (4) they are officially sanctioned, authorized or empowered
by the State; The Philippine Truth Commission (PTC) is different from the truth commissions in other
countries which have been created as official, transitory and non-judicial fact-finding bodies “to
establish the facts and context of serious violations of human rights or of international humanitarian
law in a country’s past.”—The PTC is different from the truth commissions in other countries which
have been created as official, transitory and non-judicial fact-finding bodies “to establish the facts and
context of serious violations of human rights or of international humanitarian law in a country’s past.”
They are usually established by states emerging from periods of internal unrest, civil strife or
authoritarianism to serve as mechanisms for transitional justice. Truth commissions have been
described as bodies that share the following characteristics: (1) they examine only past events; (2)
they investigate patterns of abuse committed over a period of time, as opposed to a particular event;
(3) they are temporary bodies that finish their work with the submission of a report containing
conclusions and recommendations; and (4) they are officially sanctioned, authorized or empowered
by the State. “Commission’s members are usually empowered to conduct research, support victims,
and propose policy recommendations to prevent recurrence of crimes. Through their investigations,
the commissions may aim to discover and learn more about past abuses, or formally acknowledge
them. They may aim to prepare the way for prosecutions and recommend institutional reforms.”
Judicial Review; Requisites.—Like almost all powers conferred by the Constitution, the power of
judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling
for the exercise of judicial power; (2) the person challenging the act must have the standing to
question the validity of the subject act or issuance; otherwise stated, he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of
its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4)
the issue of constitutionality must be the very lis mota of the case.
Same; Locus Standi; An act of the Executive which injures the institution of Congress causes a
derivative but nonetheless substantial injury, which can be questioned by a member of Congress.—
The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to
assail Executive Order No. 1. Evidently, their petition primarily invokes usurpation of the power of the
Congress as a body to which they belong as members. This certainly justifies their resolve to take
the cudgels for Congress as an institution and present the complaints on the usurpation of their
power and rights as members of the legislature before the Court. As held in Philippine Constitution
Association v. Enriquez, 235 SCRA 506 (1994)—“To the extent the powers of Congress are
impaired, so is the power of each member thereof, since his office confers a right to participate in the
exercise of the powers of that institution. An act of the Executive which injures the institution of
Congress causes a derivative but nonetheless substantial injury, which can be questioned by a
member of Congress. In such a case, any member of Congress can have a resort to the courts.”
Same; Same; The Supreme Court leans on the doctrine that the rule on standing is a matter of
procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens, taxpayers, and
legislators when the public interest so requires, such as when the matter is of transcendental
importance, of overreaching significance to society, or of paramount public interest.—The Court
leans on the doctrine that “the rule on standing is a matter of procedure, hence, can be relaxed for
nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so
requires, such as when the matter is of transcendental importance, of overreaching significance to
society, or of paramount public interest.” Thus, in Coconut Oil Refiners Association, Inc. v. Torres,
465 SCRA 47 (2005), the Court held that in cases of paramount importance where serious
constitutional questions are involved, the standing requirements may be relaxed and a suit may be
allowed to prosper even where there is no direct injury to the party claiming the right of judicial
review. In the first Emergency Powers Cases, 84 Phil. 368 (1949), ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders although they had only an
indirect and general interest shared in common with the public.
Presidency; Philippine Truth Commission (PTC); Reorganizations; Administrative Code of 1987 (E.O.
292); Words and Phrases; To say that the Philippine Truth Commission (PTC) is borne out of a
restructuring of the Office of the President under Section 31, Chapter 10, Book III, of Executive Order
(E.O.) No. 292, is a misplaced supposition, even in the plainest meaning attributable to the term
“restructure”—an “alteration of an existing structure”—the PTC was not part of the structure of the
Office of the President prior to the enactment of Executive Order No. 1.—The question, therefore,
before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize
as expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates
“reorganization” as limited by the following functional and structural lines: (1) restructuring the internal
organization of the Office of the President Proper by abolishing, consolidating or merging units
thereof or transferring functions from one unit to another; (2) transferring any function under the
Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency
under the Office of the President to any other Department/Agency or vice versa. Clearly, the
provision refers to reduction of personnel, consolidation of offices, or abolition thereof by reason of
economy or redundancy of functions. These points to situations where a body or an office is already
existent but a modification or alteration thereof has to be effected. The creation of an office is
nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question
is in the negative. To say that the PTC is borne out of a restructuring of the Office of the President
under Section 31 is a misplaced supposition, even in the plainest meaning attributable to the term
“restructure”—an “alteration of an existing structure.” Evidently, the PTC was not part of the structure
of the Office of the President prior to the enactment of Executive Order No. 1.
Same; Same; Same; Same; Power of Control; The power of control is entirely different from the
power to create public offices—the former is inherent in the Executive, while the latter finds basis
from either a valid delegation from Congress, or his inherent duty to faithfully execute the laws.—In
the same vein, the creation of the PTC is not justified by the President’s power of control. Control is
essentially the power to alter or modify or nullify or set aside what a subordinate officer had done in
the performance of his duties and to substitute the judgment of the former with that of the latter.
Clearly, the power of control is entirely different from the power to create public offices. The former is
inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or
his inherent duty to faithfully execute the laws.
Same; Same; Same; Same; Same; Statutes; The Court declines to recognize Presidential Decree
(P.D.) No. 1416 as a justification for the President to create a public office—P.D. No. 1416, as
amended by P.D. No. 1772, became functus oficio upon the convening of the First Congress, as
expressly provided in Section 6, Article XVIII of the 1987 Constitution.—The Court, however, declines
to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree is
already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President
Marcos of the authority to reorganize the administrative structure of the national government
including the power to create offices and transfer appropriations pursuant to one of the purposes of
the decree, embodied in its last “Whereas” clause: WHEREAS, the transition towards the
parliamentary form of government will necessitate flexibility in the organization of the national
government. Clearly, as it was only for the purpose of providing manageability and resiliency during
the interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon the convening
of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987 Constitution.
Same; Same; Faithful Execution Clause; The creation of the Philippine Truth Commission (PTC)
finds justification under Section 17, Article VII of the Constitution, imposing upon the President the
duty to ensure that the laws are faithfully executed.—While the power to create a truth commission
cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the creation of the
PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President
the duty to ensure that the laws are faithfully executed. Section 17 reads: Section 17. The President
shall have control of all the executive departments, bureaus, and offices. He shall ensure that the
laws be faithfully executed. (Emphasis supplied). As correctly pointed out by the respondents, the
allocation of power in the three principal branches of government is a grant of all powers inherent in
them. The President’s power to conduct investigations to aid him in ensuring the faithful execution of
laws—in this case, fundamental laws on public accountability and transparency—is inherent in the
President’s powers as the Chief Executive. That the authority of the President to conduct
investigations and to create bodies to execute this power is not explicitly mentioned in the
Constitution or in statutes does not mean that he is bereft of such authority.
Same; Same; Same; Residual Powers; The powers of the President are not limited to those specific
powers under the Constitution—one of the recognized powers of the President granted pursuant to
this constitutionally-mandated duty is the power to create ad hoc committees, a power which flows
from the obvious need to ascertain facts and determine if laws have been faithfully executed.—The
Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above,
the powers of the President are not limited to those specific powers under the Constitution. One of
the recognized powers of the President granted pursuant to this constitutionally-mandated duty is the
power to create ad hoc committees. This flows from the obvious need to ascertain facts and
determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano, 457
SCRA 438 (2005), the authority of the President to issue Administrative Order No. 298, creating an
investigative committee to look into the administrative charges filed against the employees of the
Department of Health for the anomalous purchase of medicines was upheld.
Same; Same; Same; The purpose of allowing ad hoc investigating bodies to exist is to allow an
inquiry into matters which the President is entitled to know so that he can be properly advised and
guided in the performance of his duties relative to the execution and enforcement of the laws of the
land.—It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to
allow an inquiry into matters which the President is entitled to know so that he can be properly
advised and guided in the performance of his duties relative to the execution and enforcement of the
laws of the land. And if history is to be revisited, this was also the objective of the investigative bodies
created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo
Commission and the Zenarosa Commission. There being no changes in the government structure,
the Court is not inclined to declare such executive power as non-existent just because the direction
of the political winds have changed.
Same; Same; Appropriations; There is no usurpation on the part of the Executive of the power to
appropriate funds where there is only allotment or allocations of existing funds already
appropriated.—On the charge that Executive Order No. 1 transgresses the power of Congress to
appropriate funds for the operation of a public office, suffice it to say that there will be no
appropriation but only an allotment or allocations of existing funds already appropriated. Accordingly,
there is no usurpation on the part of the Executive of the power of Congress to appropriate funds.
Further, there is no need to specify the amount to be earmarked for the operation of the commission
because, in the words of the Solicitor General, “whatever funds the Congress has provided for the
Office of the President will be the very source of the funds for the commission.” Moreover, since the
amount that would be allocated to the PTC shall be subject to existing auditing rules and regulations,
there is no impropriety in the funding.
Same; Same; Words and Phrases; No quasi-judicial powers have been vested in the Philippine Truth
Commission (PTC) as it cannot adjudicate rights of persons who come before it; Quasi-judicial
powers involve 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 law itself in enforcing and
administering the same law.—Invoking this authority, the President constituted the PTC to primarily
investigate reports of graft and corruption and to recommend the appropriate action. As previously
stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate rights of
persons who come before it. It has been said that “Quasi-judicial powers involve 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 law itself in enforcing and administering the same law.” In simpler
terms, judicial discretion is involved in the exercise of these quasi-judicial power, such that it is
exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of
administrative agencies.
Same; Same; Same; “Power to Investigate,” and “Power to Adjudicate,” Distinguished.—The
distinction between the power to investigate and the power to adjudicate was delineated by the Court
in Cariño v. Commission on Human Rights, 204 SCRA 483 (1991). Thus: “Investigate,” commonly
understood, means to examine, explore, inquire or delve or probe into, research on, study. The
dictionary definition of “investigate” is “to observe or study closely: inquire into systematically: “to
search or inquire into: x x to subject to an official probe x x: to conduct an official inquiry.” The
purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere
included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts established by the inquiry. The legal meaning of
“investigate” is essentially the same: “(t)o follow up step by step by patient inquiry or observation. To
trace or track; to search into; to examine and inquire into with care and accuracy; to find out by
careful inquisition; examination; the taking of evidence; a legal inquiry;” “to inquire; to make an
investigation,” “investigation” being in turn described as “(a)n administrative function, the exercise of
which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or
otherwise, for the discovery and collection of facts concerning a certain matter or matters.”
“Adjudicate,” commonly or popularly understood, means to adjudge, arbitrate, judge, decide,
determine, resolve, rule on, settle. The dictionary defines the term as “to settle finally (the rights and
duties of the parties to a court case) on the merits of issues raised: x x to pass judgment on: settle
judicially: x x act as judge.” And “adjudge” means “to decide or rule upon as a judge or with judicial or
quasi-judicial powers: x x to award or grant judicially in a case of controversy x x.” In the legal sense,
“adjudicate” means: “To settle in the exercise of judicial authority. To determine finally. Synonymous
with adjudge in its strictest sense;” and “adjudge” means: “To pass on judicially, to decide, settle or
decree, or to sentence or condemn. x x. Implies a judicial determination of a fact, and the entry of a
judgment.”
Same; Same; Same; Ombudsman; The Philippine Truth Commission (PTC) will not supplant the
Ombudsman or the Department of Justice (DOJ) or erode their respective powers—if at all, the
investigative function of the commission will complement those of the two offices; The Ombudsman’s
power to investigate under Republic Act (R.A.) No. 6770 is not exclusive but is shared with other
similarly authorized government agencies.—Contrary to petitioners’ apprehension, the PTC will not
supplant the Ombudsman or the DOJ or erode their respective powers. If at all, the investigative
function of the commission will complement those of the two offices. As pointed out by the Solicitor
General, the recommendation to prosecute is but a consequence of the overall task of the
commission to conduct a fact-finding investigation.” The actual prosecution of suspected offenders,
much less adjudication on the merits of the charges against them, is certainly not a function given to
the commission. The phrase, “when in the course of its investigation,” under Section 2(g), highlights
this fact and gives credence to a contrary interpretation from that of the petitioners. The function of
determining probable cause for the filing of the appropriate complaints before the courts remains to
be with the DOJ and the Ombudsman. At any rate, the Ombudsman’s power to investigate under
R.A. No. 6770 is not exclusive but is shared with other similarly authorized government agencies.
Same; Same; Equal Protection Clause; The equal protection of the laws is embraced in the concept
of due process, as every unfair discrimination offends the requirements of justice and fair play.—One
of the basic principles on which this government was founded is that of the equality of right which is
embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is
embraced in the concept of due process, as every unfair discrimination offends the requirements of
justice and fair play. It has been embodied in a separate clause, however, to provide for a more
specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness
in general may be challenged on the basis of the due process clause. But if the particular act
assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the
equal protection clause.
Same; Same; Same; The concept of equal justice under the law requires the state to govern
impartially, and it may not draw distinctions between individuals solely on differences that are
irrelevant to a legitimate governmental objective; The equal protection clause is aimed at all official
state actions, not just those of the legislature.—According to a long line of decisions, equal protection
simply requires that all persons or things similarly situated should be treated alike, both as to rights
conferred and responsibilities imposed.” It “requires public bodies and institutions to treat similarly
situated individuals in a similar manner.” “The purpose of the equal protection clause is to secure
every person within a state’s jurisdiction against intentional and arbitrary discrimination, whether
occasioned by the express terms of a statue or by its improper execution through the state’s duly
constituted authorities.” “In other words, the concept of equal justice under the law requires the state
to govern impartially, and it may not draw distinctions between individuals solely on differences that
are irrelevant to a legitimate governmental objective.” The equal protection clause is aimed at all
official state actions, not just those of the legislature. Its inhibitions cover all the departments of the
government including the political and executive departments, and extend to all actions of a state
denying equal protection of the laws, through whatever agency or whatever guise is taken.
Same; Same; Same; Requisites; Superficial differences do not make for a valid classification.—It,
however, does not require the universal application of the laws to all persons or things without
distinction. What it simply requires is equality among equals as determined according to a valid
classification. Indeed, the equal protection clause permits classification. Such classification, however,
to be valid must pass the test of reasonableness. The test has four requisites: (1) The classification
rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to
existing conditions only; and (4) It applies equally to all members of the same class. “Superficial
differences do not make for a valid classification.”
Same; Same; Same; For a classification to meet the requirements of constitutionality, it must include
or embrace all persons who naturally belong to the class.—For a classification to meet the
requirements of constitutionality, it must include or embrace all persons who naturally belong to the
class. “The classification will be regarded as invalid if all the members of the class are not similarly
treated, both as to rights conferred and obligations imposed. It is not necessary that the classification
be made with absolute symmetry, in the sense that the members of the class should possess the
same characteristics in equal degree. Substantial similarity will suffice; and as long as this is
achieved, all those covered by the classification are to be treated equally. The mere fact that an
individual belonging to a class differs from the other members, as long as that class is substantially
distinguishable from all others, does not justify the non-application of the law to him.”
Same; Same; Same; The classification must not be based on existing circumstances only, or so
constituted as to preclude addition to the number included in the class—it must be of such a nature
as to embrace all those who may thereafter be in similar circumstances and conditions.—The
classification must not be based on existing circumstances only, or so constituted as to preclude
addition to the number included in the class. It must be of such a nature as to embrace all those who
may thereafter be in similar circumstances and conditions. It must not leave out or “underinclude”
those that should otherwise fall into a certain classification. As elucidated in Victoriano v. Elizalde
Rope Workers’ Union, 59 SCRA 54 (1974), and reiterated in a long line of cases, The guaranty of
equal protection of the laws is not a guaranty of equality in the application of the laws upon all
citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition
against inequality, that every man, woman and child should be affected alike by a statute. Equality of
operation of statutes does not mean indiscriminate operation on persons merely as such, but on
persons according to the circumstances surrounding them. It guarantees equality, not identity of
rights. The Constitution does not require that things which are different in fact be treated in law as
though they were the same. The equal protection clause does not forbid discrimination as to things
that are different. It does not prohibit legislation which is limited either in the object to which it is
directed or by the territory within which it is to operate. The equal protection of the laws clause of the
Constitution allows classification. Classification in law, as in the other departments of knowledge or
practice, is the grouping of things in speculation or practice because they agree with one another in
certain particulars. A law is not invalid because of simple inequality. The very idea of classification is
that of inequality, so that it goes without saying that the mere fact of inequality in no manner
determines the matter of constitutionality. All that is required of a valid classification is that it be
reasonable, which means that the classification should be based on substantial distinctions which
make for real differences, that it must be germane to the purpose of the law; that it must not be
limited to existing conditions only; and that it must apply equally to each member of the class. This
Court has held that the standard is satisfied if the classification or distinction is based on a
reasonable foundation or rational basis and is not palpably arbitrary.
Same; Same; Same; Not to include past administrations similarly situated constitutes arbitrariness
which the equal protection clause cannot sanction—the Arroyo administration is but just a member of
a class, that is, a class of past administrations, not a class of its own.—Applying these precepts to
this case, Executive Order No. 1 should be struck down as violative of the equal protection clause.
The clear mandate of the envisioned truth commission is to investigate and find out the truth
“concerning the reported cases of graft and corruption during the previous administration” only. The
intent to single out the previous administration is plain, patent and manifest. Mention of it has been
made in at least three portions of the questioned executive order. Specifically, these are: * * * In this
regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is,
a class of past administrations. It is not a class of its own. Not to include past administrations
similarly situated constitutes arbitrariness which the equal protection clause cannot sanction. Such
discriminating differentiation clearly reverberates to label the commission as a vehicle for
vindictiveness and selective retribution.
Same; Same; Same; The reports of widespread corruption in the Arroyo administration cannot be
taken as basis for distinguishing said administration from earlier administrations which were also
blemished by similar widespread reports of impropriety.—Though the OSG enumerates several
differences between the Arroyo administration and other past administrations, these distinctions are
not substantial enough to merit the restriction of the investigation to the “previous administration”
only. The reports of widespread corruption in the Arroyo administration cannot be taken as basis for
distinguishing said administration from earlier administrations which were also blemished by similar
widespread reports of impropriety. They are not inherent in, and do not inure solely to, the Arroyo
administration. As Justice Isagani Cruz put it, “Superficial differences do not make for a valid
classification.”
Same; Same; Same; The fact remains that Executive Order No. 1 suffers from arbitrary
classification—the Philippine Truth Commission (PTC), to be true to its mandate of searching for the
truth, must not exclude the other past administrations.—Given the foregoing physical and legal
impossibility, the Court logically recognizes the unfeasibility of investigating almost a century’s worth
of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary
classification. The PTC, to be true to its mandate of searching for the truth, must not exclude the
other past administrations. The PTC must, at least, have the authority to investigate all past
administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck
down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins, Though the law
itself be fair on its face and impartial in appearance, yet, if applied and administered by public
authority with an evil eye and an unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their rights, the denial of equal
justice is still within the prohibition of the constitution.
Same; Same; Same; While with regard to equal protection claims, a legislature does not run the risk
of losing the entire remedial scheme simply because it fails, through inadvertence or otherwise, to
cover every evil that might conceivably have been attacked, in Executive Order No. 1, however, there
is no inadvertence.—The Court is not unaware that “mere underinclusiveness is not fatal to the
validity of a law under the equal protection clause.” “Legislation is not unconstitutional merely
because it is not all-embracing and does not include all the evils within its reach.” It has been written
that a regulation challenged under the equal protection clause is not devoid of a rational predicate
simply because it happens to be incomplete. In several instances, the underinclusiveness was not
considered a valid reason to strike down a law or regulation where the purpose can be attained in
future legislations or regulations. These cases refer to the “step by step” pro­cess. “With regard to
equal protection claims, a legislature does not run the risk of losing the entire remedial scheme
simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably
have been attacked.” In Executive Order No. 1, however, there is no inadvertence. That the previous
administration was picked out was deliberate and intentional as can be gleaned from the fact that it
was underscored at least three times in the assailed executive order. It must be noted that Executive
Order No. 1 does not even mention any particular act, event or report to be focused on unlike the
investigative commissions created in the past. “The equal protection clause is violated by purposeful
and intentional discrimination.”
Same; Same; Judicial Review; The Supreme Court, in exercising its power of judicial review, is not
imposing its own will upon a co-equal body but rather simply making sure that any act of government
is done in consonance with the authorities and rights allocated to it by the Constitution.—To answer
this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: “And
when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority
over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting
claims of authority under the Constitution and to establish for the parties in an actual controversy the
rights which that instrument secures and guarantees to them.” Thus, the Court, in exercising its
power of judicial review, is not imposing its own will upon a co-equal body but rather simply making
sure that any act of government is done in consonance with the authorities and rights allocated to it
by the Constitution. And, if after said review, the Court finds no constitutional violations of any sort,
then, it has no more authority of proscribing the actions under review. Otherwise, the Court will not
be deterred to pronounce said act as void and unconstitutional.
Same; Same; Same; Perhaps a revision of the executive issuance so as to include the earlier past
administrations would allow it to pass the test of reasonableness and not be an affront to the
Constitution; Of all the branches of the government, it is the judiciary which is the most interested in
knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment.—Lest it
be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the
present administration. Perhaps a revision of the executive issuance so as to include the earlier past
administrations would allow it to pass the test of reasonableness and not be an affront to the
Constitution. Of all the branches of the government, it is the judiciary which is the most interested in
knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must,
however, be emphasized that the search for the truth must be within constitutional bounds for “ours is
still a government of laws and not of men.”
8. ANAK MINDANAO PARTY-LIST GROUP and MAMALO DESCENDANTS
ORGANIZATION, INC., petitioners, vs. THE EXECUTIVE SECRETARY, THE HON.
EDUARDO R. ERMITA, and THE SECRETARY OF AGRARIAN/LAND REFORM, THE
HON. RENE C. VILLA, respondents.
Remedial Law; Constitutional Law; Words and Phrases; Parties; Locus Standi; Locus standi or legal
standing has been defined as a personal and substantial interest in a case such that the party has
sustained or will sustain direct injury as a result of the governmental act that is being challenged.—
Locus standi or legal standing has been defined as a personal and substantial interest in a case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is
being challenged. The gist of the question of standing is whether a party alleges such personal stake
in the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional
questions.
Same; Same; Same; Same; Same; A party who assails the constitutionality of a statute must have a
direct and personal interest; Requisites for a Concerned Party to be Allowed to Raise a Constitutional
Question.—It has been held that a party who assails the constitutionality of a statute must have a
direct and personal interest. It must show not only that the law or any governmental act is invalid, but
also that it sustained or is in immediate danger of sustaining some direct injury as a result of its
enforcement, and not merely that it suffers thereby in some indefinite way. It must show that it has
been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to
be subjected to some burdens or penalties by reason of the statute or act complained of. For a
concerned party to be allowed to raise a constitutional question, it must show that (1) it has
personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the
government, (2) the injury is fairly traceable to the challenged action, and (3) the injury is likely to be
redressed by a favorable action.
Same; Same; Same; Same; Same; Mamalo Descendants Organization, Inc.’s (MDOI’s) status as a “
people’s organization” did not vest it with the legal standing to assail the validity of the executive
orders.—Vague propositions that the implementation of the assailed orders will work injustice and
violate the rights of its members cannot clothe MDOI with the requisite standing. Neither would its
status as a “people’s organization” vest it with the legal standing to assail the validity of the executive
orders.
Same; Same; Same; Same; Same; Requisites to be Accorded Standing on the Ground of
Transcendental Importance; The transcendental importance of the issues raised must relate to the
merits of the petition.—MDOI raises no issue of transcendental importance to justify a relaxation of
the rule on legal standing. To be accorded standing on the ground of transcendental importance,
Senate of the Philippines v. Ermita, 488 SCRA 1 (2006), requires that the following elements must be
established: (1) the public character of the funds or other assets involved in the case, (2) the
presence of a clear case of disregard of a constitutional or statutory prohibition by the public
respondent agency or instrumentality of government, and (3) the lack of any other party with a more
direct and specific interest in raising the questions being raised. The presence of these elements
MDOI failed to establish, much less allege. Francisco, Jr. v. Fernando, 507 SCRA 173 (2006), more
specifically declares that the transcendental importance of the issues raised must relate to the merits
of the petition.
Constitutional Law; Separation of Powers; The principle of separation of powers presupposes mutual
respect by and between the executive, legislative and judicial departments of the government and
calls for them to be left alone to discharge their duties as they see fit.—Under the principle of
separation of powers, Congress, the President, and the Judiciary may not encroach on fields
allocated to each of them. The legislature is generally limited to the enactment of laws, the executive
to the enforcement of laws, and the judiciary to their interpretation and application to cases and
controversies. The principle presupposes mutual respect by and between the executive, legislative
and judicial departments of the government and calls for them to be left alone to discharge their
duties as they see fit.
Same; Same; The Constitution confers, by express provision, the power of control over executive
departments, bureaus and offices in the President alone; The Constitution’s express grant of the
power of control in the President justifies an executive action to carry out reorganization measures
under a broad authority of law.—The Constitution confers, by express provision, the power of control
over executive departments, bureaus and offices in the President alone. And it lays down a limitation
on the legislative power. The Constitution’s express grant of the power of control in the President
justifies an executive action to carry out reorganization measures under a broad authority of law.
Same; Same; As far as bureaus, agencies or offices in the executive department are concerned, the
power of control may justify the President to deactivate the functions of a particular office.—In
establishing an executive department, bureau or office, the legislature necessarily ordains an
executive agency’s position in the scheme of administrative structure. Such determination is primary,
but subject to the President’s continuing authority to reorganize the administrative structure. As far as
bureaus, agencies or offices in the executive department are concerned, the power of control may
justify the President to deactivate the functions of a particular office. Or a law may expressly grant
the President the broad authority to carry out reorganization measures. The Administrative Code of
1987 is one such law.
Same; Same; The President may transfer any agency under the Office of the President to any other
department or agency, subject to the policy in the Executive Office and in order to achieve simplicity,
economy and efficiency.—As thus provided by law, the President may transfer any agency under the
Office of the President to any other department or agency, subject to the policy in the Executive
Office and in order to achieve simplicity, economy and efficiency. Gauged against these guidelines,
the challenged executive orders may not be said to have been issued with grave abuse of discretion
or in violation of the rule of law.
Statutes; A law has in its favor the presumption of constitutionality.—A law has in its favor the
presumption of constitutionality. For it to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable
doubt. Any reasonable doubt should, following the universal rule of legal hermeneutics, be resolved
in favor of the constitutionality of a law.
9. DRIANITA BAGAOISAN vs. NATIONAL TOBACCO ADMINISTRATION
Political Law; Legislative Power; Abolition of Office; Exception; The general rule has always been
that the power to abolish a public office is lodged with the legislature.—The general rule has always
been that the power to abolish a public office is lodged with the legislature. This proceeds from the
legal precept that the power to create includes the power to destroy. A public office is either created
by the Constitution, by statute, or by authority of law. Thus, except where the office was created by
the Constitution itself, it may be abolished by the same legislature that brought it into existence. The
exception, however, is that as far as bureaus, agencies or offices in the executive department are
concerned, the President’s power of control may justify him to inactivate the functions of a particular
office, or certain laws may grant him the broad authority to carry out reorganization measures.
Same; Same; Same; Same; Reorganization; Security of Tenure; Republic Act No. 6656 provides for
the circumstances which may be considered as evidence of bad faith in the removal of civil service
employees made as a result of reorganization.—It having been duly established that the President
has the authority to carry out reorganization in any branch or agency of the executive department,
what is then left for us to resolve is whether or not the reorganization is valid. In this jurisdiction,
reorganizations have been regarded as valid provided they are pursued in good faith. Reorganization
is carried out in ‘good faith’ if it is for the purpose of economy or to make bureaucracy more efficient.
Pertinently, Republic Act No. 6656 provides for the circumstances which may be considered as
evidence of bad faith in the removal of civil service employees made as a result of reorganization, to
wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of
the department or agency concerned; (b) where an office is abolished and another performing
substantially the same functions is created; (c) where incumbents are replaced by those less
qualified in terms of status of appointment, performance and merit; (d) where there is a classification
of offices in the department or agency concerned and the reclassified offices perform substantially
the same functions as the original offices; and (e) where the removal violates the order of separation.
Bagaoisan vs. National Tobacco Administration, 408 SCRA 337, G.R. No. 152845 August 5, 2003
10. KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, petitioner, vs.
COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA,
LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B. COLAYCO, of the
ENERGY REGULATORY COMMISSION, respondents.
Administrative Law; Abolition of Office; The power to create an office carries with it the power to
abolish.—A public office is created by the Constitution or by law or by an officer or tribunal to which
the power to create the office has been delegated by the legislature. The power to create an office
carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative
powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987.
Same; Same; Security of Tenure; The question of whether a law abolishes an office is a question of
legislative intent; Impairment of the constitutional guarantee of security of tenure does not arise in the
abolition of an office—removal implies that the office and its related positions subsist and that the
occupants are merely separated from their positions.—The question of whether a law abolishes an
office is a question of legislative intent. There should not be any controversy if there is an explicit
declaration of abolition in the law itself. Section 38 of RA 9136 explicitly abolished the ERB.
However, abolition of an office and its related positions is different from removal of an incumbent
from his office. Abolition and removal are mutually exclusive concepts. From a legal standpoint, there
is no occupant in an abolished office. Where there is no occupant, there is no tenure to speak of.
Thus, impairment of the constitutional guarantee of security of tenure does not arise in the abolition
of an office. On the other hand, removal implies that the office and its related positions subsist and
that the occupants are merely separated from their positions.
Same; Same; Same; Energy Regulatory Commission (ERC); Statutes; Republic Act No. 6656; An
abolition is made in good faith when it is not made for political or personal reasons, or when it does
not circumvent the constitutional security of tenure of civil service employees.—A valid order of
abolition must not only come from a legitimate body, it must also be made in good faith. An abolition
is made in good faith when it is not made for political or personal reasons, or when it does not
circumvent the constitutional security of tenure of civil service employees. Abolition of an office may
be brought about by reasons of economy, or to remove redundancy of functions, or a clear and
explicit constitutional mandate for such termination of employment. Where one office is abolished
and replaced with another office vested with similar functions, the abolition is a legal nullity. When
there is a void abolition, the incumbent is deemed to have never ceased holding office. KERB asserts
that there was no valid abolition of the ERB but there was merely a reorganization done in bad faith.
Evidences of bad faith are enumerated in Section 2 of Republic Act No. 6656 (RA 6656)
Same; Same; Same; Same; The overlap in the functions of the Energy Regulatory Board (ERB) and
of the Energy Regulatory Commission (ERC) does not mean that there is no valid abolition of the
ERB. The ERC has new and expanded functions which are intended Kapisanan ng mga Kawani ng
Energy Regulatory Board vs. Barinto meet the specific needs of a deregulated power industry.—After
comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed the
functions of the ERB. However, the overlap in the functions of the ERB and of the ERC does not
mean that there is no valid abolition of the ERB. The ERC has new and expanded functions which
are intended to meet the specific needs of a deregulated power industry. Indeed, National Land Titles
and Deeds Registration Administration v. Civil Service Commission, 221 SCRA 145 (1993), stated
that: [I]f the newly created office has substantially new, different or additional functions, duties or
powers, so that it may be said in fact to create an office different from the one abolished, even
though it embraces all or some of the duties of the old office it will be considered as an abolition of
one office and the creation of a new or different one. The same is true if one office is abolished and
its duties, for reasons of economy are given to an existing officer or office.
Same; Same; Same; Same; While the Energy Regulatory Commission (ERC) retains the Energy
Regulatory Board’s (ERB’s) traditional rate and service regulation functions, the ERC now also has to
promote competitive operations in the electricity market—RA 9136 expanded the ERC’s concerns to
encompass both the consumers and the utility investors.—Throughout the years, the scope of the
regulation has gradually narrowed from that of public services in 1902 to the electricity industry and
water resources in 1972 to the electric power industry and oil industry in 1977 to the electric industry
alone in 1998. The ERC retains the ERB’s traditional rate and service regulation functions. However,
the ERC now also has to promote competitive operations in the electricity market. RA 9136
expanded the ERC’s concerns to encompass both the consumers and the utility investors.
11. NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, petitioner,
vs. CIVIL SERVICE COMMISSION and VIOLETA L. GARCIA, respondents.
Public Officers; Administrative Law; Civil Service; Abolition of position does not imply removal.—
Thus, without need of any interpretation, the law mandates that from the moment an implementing
order is issued, all positions in the Land Registration Commission are deemed non-existent. This,
however, does not mean removal. Abolition of a position does not involve or mean removal for the
reason that removal implies that the post subsists and that one is merely separated therefrom. After
abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that
from the standpoint of strict law, the question of any impairment of security of tenure does not arise.
Same; Same; Same; Attorneys; E.O 649 abolishing the Land Registration Commission and creating
the NALTDRA is valid. Its requirement of Bar membership for Deputy Registers of Deed is a valid
reorganization measure.—Executive Order No. 649 was enacted to improve the services and better
systematize the operation of the Land Registration Commission. A reorganization is carried out in
good faith if it is for the purpose of economy or to make bureaucracy more efficient. To this end, the
requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet
the changing circumstances and new development of the times. Private respondent Garcia who
formerly held the position of Deputy Register of Deeds II did not have such qualification. It is thus
clear that she cannot hold any key position in the NALTDRA. The additional qualification was not
intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid
reorganization measure.
Same; Same; Same; Same; There is no vested right in a public office; Exceptions.—A final word, on
the “vested right theory” advanced by respondent Civil Service Commission. There is no such thing
as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional
offices which provide for special immunity as regards salary and tenure, no one can be said to have
any vested right in an office or its salary. None of the exceptions to this rule are obtaining in this
case.
12. AIDA D. EUGENIO, petitioner, vs. CIVIL SERVICE COMMISSION, HON. TEOFISTO T.
GUINGONA, JR. & HON. SALVADOR ENRIQUEZ, JR., respondents.
Civil Service Law; P.D. No. 1; Career Executive Service Board; Career Executive Service Board
(CESB) was created by P.D. No. 1 on September 1, 1974.—The controlling fact is that the Career
Executive Service Board (CESB) was created by Presidential Decree (P.D.) No. 1 on September 1,
1974 which adopted the Integrated Reorganization Plan.
Same; Same; Same; As CESB was created by law, it can only be abolished by the legislature.—It
cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the
legislature. This follows an unbroken stream of rulings that the creation and abolition of public offices
is primarily a legislative function.
Same; Same; Same; CESB was intended to be an autonomous entity, albeit administratively
attached to respondent Commission.—From its inception, the CESB was intended to be an
autonomous entity, albeit administratively attached to respondent Commission. As conceptualized by
the Reorganization Committee “the CESB shall be autonomous. It is expected to view the problem of
building up executive manpower in the government with a broad and positive outlook.” The essential
autonomous character of the CESB is not negated by its attachment to respondent Commission. By
said attachment, CESB was not made to fall within the control of respondent Commission.
Administrative Law; Civil Service Law; Purpose of attaching one functionally inter-related government
agency to another is to attain “policy and program coordination.”—Under the Administrative Code of
1987, the purpose of attaching one functionally inter-related government agency to another is to
attain “policy and program coordination.” This is clearly etched out in Section 38(3), Chapter 7, Book
IV of the aforecited Code.
13. MAKATI STOCK EXCHANGE, INC., petitioner, vs. SECURITIES AND EXCHANGE
COMMISSION and MANILA STOCK EXCHANGE, respondents.
Securities and Exchange Commission; May not prohibit double listing of securities in stock
exchanges.—The Securities and Exchange Commission’s rule that a security already listed in any
securities exchange may not be listed anew in any other securities exchange is beyond the power of
the Commission to impose because it results in discrimination and violation of constitutional rights.
Same; Same; Prohibition against double listing as condition for licensing of stock exchange.—The
Securities and Exchange Commission may not validly impose as a condition precedent for the
licensing of a stock exchange its rule against double listing of securities.
14. KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG
BAYAN NG MUNTINLUPA, INC., (KBMBPM), vs. HON. CARLOS G. DOMINGUEZ, Secretary of
Agriculture, Regional Director of Region IV of the Department of Agriculture
Political Law; Administrative Law; Exhaustion of administrative remedies admits of certain
exceptions.—As to failure to exhaust administrative remedies, the rule is well-settled that this
requirement does not apply where the respondent is a department secretary whose acts, as an alter
ego of the President, bear the implied approval of the latter, unless actually disapproved by him. This
doctrine of qualified political agency ensures speedy access to the courts when most needed. There
was no need then to appeal the decision to the office of the President; recourse to the courts could
be had immediately. Moreover, the doctrine of exhaustion of administrative remedies also yields to
other exceptions, such as when the question involved is purely legal, as in the instant case, or where
the questioned act is patently illegal, arbitrary or oppressive. Such is the claim of petitioners which,
as hereinafter shown, is correct.
Same; Same; Administrative Code of 1987; An administrative officer has only such powers as are
expressly granted to him and those necessarily implied in the exercise thereof.—Supervision and
control include only the authority to: (a) act directly whenever a specific function is entrusted by law
or regulation to a subordinate; (b) direct the performance of duty; restrain the commission of acts; (c)
review, approve, reverse or modify acts and decisions of subordinate officials or units; (d) determine
priorities in the execution of plans and programs; and (e) prescribe standards, guidelines, plans and
programs. Specifically, administrative supervision is limited to the authority of the department or its
equivalent to: (1) generally oversee the operations of such agencies and insure that they are
managed effectively, efficiently and economically but without interference with day-to-day activities;
(2) require the submission of reports and cause the conduct of management audit, performance
evaluation and inspection to determine compliance with policies, standards and guidelines of the
department; (3) take such action as may be necessary for the proper performance of official
functions, including rectification of violations, abuses and other forms of mal-administration; (4)
review and pass upon budget proposals of such agencies but may not increase or add to them.
Same; Constitutional Law; Due process of law extends to administrative proceedings.—Due process
is guaranteed by the Constitution and extends to administrative proceedings. In the landmark case of
Ang Tibay vs. Court of Industrial Relations, this Court, through Justice Laurel, laid down the cardinal
primary requirements of due process in administrative proceedings, foremost of which is the right to a
hearing, which includes the right to present one's case and submit evidence in support thereof. The
need for notice and the opportunity to be heard is the heart of procedural due process, be it in either
judicial or administrative proceedings. Nevertheless, a plea of a denial of procedural due process
does not lie where a defect consisting in an absence of notice of hearing was thereafter cured by the
aggrieved party himself as when he had the opportunity to be heard on a subsequent motion for
reconsideration. This is consistent with the principle that what the law prohibits is not the absence of
previous notice but the absolute absence thereof and lack of an opportunity to be heard.
14. SENATOR ROBERT S. JAWORSKI, petitioner, vs. PHILIPPINE AMUSEMENT AND
GAMING CORPORATION and SPORTS AND GAMES ENTERTAINMENT
CORPORATION, respondents.
Same; Same; Same; Same; Legislative Franchise; A legislative franchise is a special privilege
granted by the state to corporations.—A legislative franchise is a special privilege granted by the
state to corporations. It is a privilege of public concern which cannot be exercised at will and
pleasure, but should be reserved for public control and administration; either by the government
directly, or by public agents, under such conditions and regulations as the government may impose
on them in the interest of the public. It is Congress that prescribes the conditions on which the grant
of the franchise may be made. Thus the manner of granting the franchise, to whom it may be
granted, the mode of conducting the business, the charter and the quality of the service to be
rendered and the duty of the grantee to the public in exercising the franchise are almost always
defined in clear and unequivocal language.
Same; Same; Same; Same; Same; The special privileges and franchises received are subject to the
laws of the State and the limitations of its charter.—The grant of franchise is a special privilege that
constitutes a right and a duty to be performed by the grantee. The grantee must not perform its
activities arbitrarily and whimsically but must abide by the limits set by its franchise and strictly
adhere to its terms and conditionalities. A corporation as a creature of the State is presumed to exist
for the common good. Hence, the special privileges and franchises it receives are subject to the laws
of the State and the limitations of its charter. There is therefore a reserved right of the State to inquire
how these privileges had been employed, and whether they have been abused.
15. RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner, vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) and JUAN A. ALEGRE,
respondents.
Administrative Law; National Telecommunications Commission; NTC has no jurisdiction to impose a
fine.—E.O. 546, it will be observed, is couched in general terms. The NTC stepped “into the shoes”
of the Board of Communications which exercised powers pursuant to the Public Service Act. The
power to impose fines should therefore be read in the light of the Francisco Santiago case because
subsequent legislation did not grant additional powers to the Board of Communications. The Board in
other words, did not possess the power to impose administrative fines on public services rendering
deficient service to customers,ergo its successor cannot arrogate unto itself such power, in the
absence of legislation. It is true that the decision in RCPI vs. Radio Communications of the
Philippines, Inc. vs. National Telecommunications Commission Board of Communications seems to
have modified the Santiago ruling in that the latter case held that the Board of Communications can
impose fines if the public service entity violates or fails to comply with the terms and conditions of any
certificate or any order, decision or regulation of the Commission. But can private respondent’s
complaint be similarly treated when the complaint seeks redress of a grievance against the
company? NTC has no jurisdiction to impose a fine.
Same; Same; Same; Executive Order No. 546 is not an explicit grant of power to impose
administrative fines on public service utilities including telegraphic agencies which have failed to
render adequate service to customers.—No substantial change has been brought about by Executive
Order No. 546 invoked by the Solicitor General’s Office to bolster NTC’s jurisdiction. The Executive
Order is not an explicit grant of power to impose administrative fines on public service utilities,
including telegraphic agencies, which have failed to render adequate service to customers. Neither
has it expanded the coverage of the supervisory and regulatory power of the agency.
Same; Same; Same; Same; Doctrine is settled that jurisdiction and powers of administrative
agencies, like respondent commission, are limited to those expressly granted or necessarily implied
from those granted in the legislation creating such body.—“Too basic in administrative law to need
citation of jurisprudence is the rule that jurisdiction and powers of administrative agencies, like
respondent Commission, are limited to those expressly granted or necessarily implied from those
granted in the legislation creating such body; and any order without or beyond such jurisdiction is
void and ineffective.”
16. RUFINO MATIENZO vs. HON. LEOPOLDO M. ABELLERA, ACTING CHAIRMAN OF
THE BOARD OF TRANSPORTATION
Public Service Law; Board of Transportation; Power vested in the Board under Presidential Decree
No. 101..—Presidential Decree No. 101 vested in the Board of Transportation the power, among
others “To grant special permits of limited term for the operation of public utility motor vehicles as
may, in the judgment of the Board, be necessary to replace or convert clandestine operators into
legitimate and responsible operators” (Section 1, PD 101).
Same; Same; Same; Issue of grant of provisional authority to respondents moot and academic.—We
need not pass upon the first issue raised anent the grant of provisional authority to respondents.
Considering that the effectivity of the provisional permits issued to the respondents was expressly
limited to June 30, 1977, as evidenced by the BOT orders granting the same (Annexes G, H, I and J
among others) and Memorandum Circular No. 77-4 dated January 20, 1977 (p. 151, Rollo),
implementing paragraph 6 of LOI 379 (ordering immediate cancellation of all provisional authorities
issued to taxicab operators, supra), which provides: After June 30, 1977, all provisional authorities
are deemed cancelled, even if hearings on the main
Same; Same; Same; Respondent Board justify its action on private respondent’s application with
emphasis on public need as the overriding concern.—Justifying its action on private respondent’s
applications, the respondent Board emphasizes public need as the overriding concern. It is argued
that under PD 101, it is the fixed policy of the State “to eradicate the harmful and unlawful trade of
clandestine operators by replacing or allowing them to become legitimate and responsible ones”
(Whereas clause, PD 101). In view thereof, it is maintained that respondent Board may continue to
grant to “colorum” operators the benefits of legalization under PD 101, despite the lapse of its power,
after six (6) months, to do so, without taking punitive measures against the said operators.
Same; Same; Same; No impediment to the Board’s exercise of jurisdiction under its broad powers
under the Public Service Act to issue certificates of public convenience to achieve the avowed
purpose of PD 101.—Indeed, a reading to Section 1, PD 101, shows a grant of powers to the
respondent Board to issue provisional permits as a step towards the legalization of colorum taxicab
operations without the alleged time limitation. There is nothing in Section 4, cited by the petitioners,
to suggest the expiration of such powers six (6) months after promulgation of the Decree. Rather, it
merely provides for the withdrawal of the State’s waiver of its right to punish said colorum operators
for their illegal acts. In other words, the cited section declares when the period of moratorium
suspending the relentless drive to eliminate illegal operators shall end. Clearly, there is no
impediment to the Board’s exercise of jurisdiction under its broad powers under the Public Service
Act to issue certificates of public convenience to achieve the avowed purpose of PD 101.
Same; Same; Same; To determine whether a board or commission has a certain power, the authority
given should be liberally construed in the light of the purposes for which it was created and that
which is incidentally necessary to a full implementation of the legislative intent should be upheld as
being germane to the law.—It is a settled principle of law that in determining whether a board or
commission has a certain power, the authority given should be liberally construed in the light of the
purposes for which it was created, and that which is incidentally necessary to a full implementation of
the legislative intent should be upheld as being germane to the law. Necessarily, too, where the end
is required, the appropriate means are deemed given.
Same; Same; Same; Public Service Act enjoins the Board to public utilities for the purpose of re-
evaluating the policies.—Anent the petitioners’ reliance on the BOT Rules and Regulations
Implementing PD 101 as well as its Memorandum Circular No. 76-25(a), the BOT itself has declared:
“In line with its duty to rationalize the transport industry, the Board shall, from time to time, re-study
the public need for public utilities in any area in the Philippines for the purpose of reevaluating the
policies.”
Same; Same; Same; Same; Same; Memo orders issued by respondent jibe with the dynamic and
flexible standards of public needs.—Thus, the respondents correctly argue that “as the need of the
public changes and oscillates with the trends of modern life, so must the Memo Orders issued by
respondent jibe with the dynamic and flexible standards of public needs. x x x Respondent Board is
not supposed to ‘tie its hands’ on its issued Memo Orders should public interest demand otherwise.”
Same; Same; Same; As a rule, Court does not interfere with administrative action prior to its
completion and finality.—The fate of the private respondents’ petition is initially for the Board to
determine. From the records of the case, acceptance of the respondents’ applications appears to be
a question correctly within the discretion of the respondent Board to decide. As a rule, where the
jurisdiction of the BOT to take cognizance of an application for legalization is settled, the Court
enjoins the exercise thereof only when there is fraud, abuse of discretion or error of law.
Furthermore, the court does not interfere, as a rule, with administrative action prior to its completion
or finality. It is only after judicial review is no longer premature that we ascertain in proper cases
whether the administrative findings are not in violation of law, whether they are free from fraud or
imposition and whether they find substantial support from the evidence.
Same; Same; Same; Due Process; PD 101 does not require notice and hearing for the grant of
temporary authority.—Finally, with respect to the last issue raised by the petitioners alleging that
denial of due process by respondent Board in granting the provisional permits to the private
respondents and in taking cognizance of their applications for legalization without notice and hearing,
suffice it to say that PD 101 does not require such notice or hearing for the grant of temporary
authority. The provisional nature of the authority and the fact that the primary application shall be
given a full hearing are the safeguards against its abuse.
Same; Same; Same; Same; Public Service Act enjoins the Board to give notice and hearing as to the
application for legalization themselves; Denial of due process negated by the hearings set by the
Board.—ZAs to the applications for legalization themselves, the Public Service Act does enjoin the
Board to give notice and hearing before exercising any of its powers under Sec. 16 thereof. However,
the allegations that due process has been denied are negated by the hearings set by the Board on
the applications as expressed in its orders resolving the petitioners for special permits (Annexes G,
H, I, pp. 80-102, Rollo). The Board stated: “The grounds involved in the petition are of first
impression. It cannot resolve the issue ex-parte. It needs to hear the views of other parties who may
have an interest, or whose interest may be affected by any decision that this Board may take. The
Board therefore, decides to set the petition for hearing. x x x”
Same; Same; Same; Same; Same; Lack of notice deemed cured, case at bar.—As to the required
notice, it is impossible for the respondent Board to give personal notice to all parties who may be
interested in the matter, which parties are unknown to it. Its aforementioned order substantially
complies with the requirement. The petitioners having been able to timely oppose the petitions in
question, any lack of notice is deemed cured.
17. COOPERATIVE DEVELOPMENT AUTHORITY, petitioner, vs. DOLEFIL AGRARIAN
REFORM BENEFICIARIES COOPERATIVE, INC.
Administrative Law; Cooperatives; Cooperative Development Authority (CDA); R.A. No. 6939;
Statutory Construction; When the law speaks in clear and categorical language, there is no room for
interpretation, vacillation or equivocation—there is only room for application; It can be gleaned from
Section 3 of R.A. No. 6939 that the authority of the CDA is to discharge purely administrative
functions which consist of policy-making, registration, fiscal and technical assistance to cooperatives
and implementation of cooperative laws.—It is a fundamental rule in statutory construction that when
the law speaks in clear and categorical language, there is no room for interpretation, vacillation or
equivocation—there is only room for application. It can be gleaned from the above-quoted provision
of R.A. No. 6939 that the authority of the CDA is to discharge purely administrative functions which
consist of policy-making, registration, fiscal and technical assistance to cooperatives and
implementation of cooperative laws. Nowhere in the said law can it be found any express grant to the
CDA of authority to adjudicate cooperative disputes. At most, Section 8 of the same law provides that
“upon request of either or both parties, the Authority shall mediate and conciliate disputes with a
cooperative or between cooperatives” however, with a restriction “that if no mediation or conciliation
succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued
by the commission prior to the filing of appropriate action before the proper courts.” Being an
administrative agency, the CDA has only such powers as are expressly granted to it by law and
those which are necessarily implied in the exercise thereof.
Same; Same; Same; Same; The decision to withhold quasi-judicial powers from the CDA is in
accordance with the policy of the government granting autonomy to cooperatives.—The decision to
withhold quasijudicial powers from the CDA is in accordance with the policy of the government
granting autonomy to cooperatives. It was noted that in the past 75 years cooperativism failed to
flourish in the Philippines. Of the 23,000 cooperatives organized under P.D. No. 175, only 10 to 15
percent remained operational while the rest became dormant. The dismal failure of cooperativism in
the Philippines was attributed mainly to the stifling attitude of the government toward cooperatives.
While the government wished to help, it invariably wanted to control. Also, in its anxious efforts to
push cooperativism, it smothered cooperatives with so much help that they failed to develop self-
reliance. As one cooperative expert put it, “The strong embrace of government ends with a kiss of
death for cooperatives.”
Same; Same; Same; Same; Pursuant to the constitutional mandate directing Congress to create a
centralized agency that shall promote the viability and growth of cooperatives, the Congress
approved on 10 March 1990 Republic Act No. 6939 which is the organic law creating the Cooperative
Development Authority, and apparently cognizant of the errors in the past, Congress declared in an
unequivocal language that the state shall “maintain the policy of non-interference in the management
and operation of cooperatives.”—But then, acknowledging the role of cooperatives as instruments of
national development, the framers of the 1987 Constitution directed Congress under Article XII,
Section 15 thereof to create a centralized agency that shall promote the viability and growth of
cooperatives. Pursuant to this constitutional mandate, the Congress approved on March 10, 1990
Republic Act No. 6939 which is the organic law creating the Cooperative Development Authority.
Apparently cognizant of the errors in the past, Congress declared in an unequivocal language that
the state shall “maintain the policy of non-interference in the management and operation of
cooperatives.”
Same; Same; Same; Same; The CDA is devoid of any quasi-judicial authority to adjudicate intra-
cooperative disputes and more particularly disputes as regards the election of the members of the
Board of Directors and officers of cooperatives—the authority to conduct hearings or inquiries and
the power to hold any person in contempt may be exercised by the CDA only in the performance of
its administrative functions.—After ascertaining the clear legislative intent underlying R.A. No. 6939,
effect should be given to it by the judiciary. Consequently, we hold and rule that the CDA is devoid of
any quasi-judicial authority to adjudicate intra-cooperative disputes and more particularly disputes as
regards the election of the members of the Board of Directors and officers of cooperatives. The
authority to conduct hearings or inquiries and the power to hold any person in contempt may be
exercised by the CDA only in the performance of its administrative functions under R.A. No. 6939.
Due Process; Requisites.—We find, however, that the action taken by the Court of Appeals, 13th
Division, on the “Twin Motions for Contempt of Court and to Nullify Proceedings” insofar as it nullified
the election of the officers and members of the Board of Directors of DARBCI, violated the
constitutional right of the petitioners-in-intervention to due process. The requirement of due process
is satisfied if the following conditions are present, namely: (1) there must be a court or tribunal
clothed with judicial power to hear and determine the matter before it; (2) jurisdiction must be lawfully
acquired over the person of the defendant or over the property which is the subject of the
proceedings; (3) the defendant must be given an opportunity to be heard; and (4) judgment must be
rendered upon lawful hearing. The appellate court should have first required the petitioners-in-
intervention to file their comment or opposition to the said “Twin Motions For Contempt Of Court And
to Nullify Proceedings” which also refers to the elections held during the general assembly on July
12, 1998. It was precipitate for the appellate court to render judgment against the petitioners-in-
intervention in its Resolution dated February 9, 1999 without due notice and opportunity to be heard.
Besides, the validity of the general assembly held on July 12, 1998 was not raised as an issue in CA-
G.R. SP No. 47933.
18. LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS,
HON. MANUEL JN. SERAPIO, Presiding Judge, RTC, Branch 127, Caloocan City,
HON. MACARIO A. ASISTIO, JR., City Mayor of Caloocan and/or THE CITY
GOVERNMENT OF CALOOCAN, respondents.
Administrative Law; Sec. 16 E.O. 192; A Pollution Adjudication Board (PAB) under the office of
DENR Secretary now assumes the powers and functions of the National Pollution Control
Commission with respect to adjudication of pollution cases.—The matter of determining whether
there is such pollution of the environment that requires control, if not prohibition, of the operation of a
business establishment is essentially addressed to the Environmental Management Bureau (EMB) of
the DENR which, by virtue of Section 16 of Executive Order No. 192, series of 1987, has assumed
the powers and functions of the defunct National Pollution Control Commission created under
Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication Board (PAB) under the
Office of the DENR Secretary now assumes the powers and functions of the National Pollution
Control Commission with respect to adjudication of pollution cases.
Same; Same; Adjudication of pollution cases generally pertains to the PAB except where the special
law provides for another forum; LLDA as a special charter has responsibility to protect the inhabitants
of the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of
wastes from the surrounding areas.—As a general rule, the adjudication of pollution cases generally
pertains to the Pollution Adjudication Board (PAB), except in cases where the special law provides
for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative
agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry out
and make effective the declared national policy of promoting and accelerating the development and
balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and
the cities of San Pablo, Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the quality of human life and
ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution.
Under such a broad grant of power and authority, the LLDA, by virtue of its special charter, obviously
has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious
effects of pollutants emanating from the discharge of wastes from the surrounding areas. In carrying
out the aforementioned declared policy, the LLDA is mandated, among others, to pass upon and
approve or disapprove all plans, programs, and projects proposed by local government
offices/agencies within the region, public corporations, and private persons or enterprises where
such plans, programs and/or projects are related to those of the LLDA for the development of the
region.
Same; Same; LLDA has the power and authority to issue a “cease and desist” order under RA. 4850
and its amendatory laws.—Having thus resolved the threshold question, the inquiry then narrows
down to the following issue: Does the LLDA have the power and authority to issue a “cease and
desist” order under Republic Act No. 4850 and its amendatory laws, on the basis of the facts
presented in this case, enjoining the dumping of garbage in Tala Estate, Barangay Camarin,
Caloocan City. The irresistible answer is in the affirmative.
Same; Same; Same.—The cease and desist order issued by the LLDA requiring the City
Government of Caloocan to stop dumping its garbage in the Camarin open dumpsite found by the
LLDA to have been done in violation of Republic Act No. 4850, as amended, and other relevant
environment laws, cannot be stamped as an unauthorized exercise by the LLDA of injunctive powers.
By its express terms, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No.
927, series of 1983, authorizes the LLDA to “make, alter or modify orders requiring the
discontinuance of pollution.” (Italics for emphasis) Section 4, par. (d) explicitly authorizes the LLDA to
make whatever order may be necessary in the exercise of its jurisdiction.
Same; Same; Same; The power to make, alter or modify orders requiring the discontinuance of
pollution is also expressly bestowed upon LLDA by E.O. No. 927, series of 1983.—To be sure, the
LLDA was not expressly conferred the power “to issue an ex-parte cease and desist order” in a
language, as suggested by the City Government of Caloocan, similar to the express grant to the
defunct National Pollution Control Commission under Section 7 of P.D. No. 984 which, admittedly
was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it would be a
mistake to draw therefrom the conclusion that there is a denial of the power to issue the order in
question when the power “to make, alter or modify orders requiring the discontinuance of pollution” is
expressly and clearly bestowed upon the LLDA by Executive Order No. 927, series of 1983.
Same; While it is a fundamental rule that an administrative agency has only such powers as are
expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such
powers as are necessarily implied in the exercise of its express powers.—Assuming arguendo that
the authority to issue a “cease and desist order” were not expressly conferred by law, there is
jurisprudence enough to the effect that the rule granting such authority need not necessarily be
express. While it is a fundamental rule that an administrative agency has only such powers as are
expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such
powers as are necessarily implied in the exercise of its express powers In the exercise, therefore, of
its express powers under its charter, as a regulatory and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of the LLDA to issue a “cease and desist order” is,
perforce, implied Otherwise, it may well be reduced to a “toothless” paper agency.
Same; Same; PAB has the power to issue an ex-parte cease and desist order when there is prima
facie evidence of an establishment exceeding the allowable standards set by the anti-pollution laws
of the country.—In this connection, it must be noted that in Pollution Adjudication Board v. Court of
Appeals, et al., the Court ruled that the Pollution Adjudication Board (PAB) has the power to issue an
ex-parte cease and desist order when there is prima facie evidence of an establishment exceeding
the allowable standards set by the anti-pollution laws of the country.
Same; Same; The relevant Pollution control statute and implementing regulations were enacted and
promulgated in the exercise of that pervasive sovereign power to protect the safety, health and
general welfare and comfort of the public, as well as the protection of plant and animal life commonly
designated as the police power.—“Ex parte cease and desist orders are permitted by law and
regulations in situations like that here presented precisely because stopping the continuous
discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines
cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such
orders has run its full course, including multiple and sequential appeals such as those which Solar
has taken, which of course may take several years. The relevant pollution control statute and
implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign
power to protect the safety, health, and general welfare and comfort of the public, as well as the
protection of plant and animal life, commonly designated as the police power. It is a constitutional
commonplace that the ordinary requirements of procedural due process yield to the necessities of
protecting vital public interests like those here involved, through the exercise of police power. x x x”
Same; The issuance of cease and desist order by the LLDA is the proper exercise of its power and
authority under its charter and its amendatory laws.—The issuance, therefore, of the cease and
desist order by the LLDA, as a practical matter of procedure under the. circumstances of the case, is
a proper exercise of its power and authority under its charter and its amendatory laws. Had the cease
and desist order issued by the LLDA been complied with by the City Government of Caloocan as it
did in the first instance, no further legal steps would have been necessary.
20. THE UNITED STATES, plaintiff and appellee, vs. ANICETO BARRIAS, defendant and
appellant.
1.HARBOR RULES.—Rules for local navigation prescribed by the collector of a port as harbor
master pursuant to statutory authority may be sustained as not an undue exercise of a delegated
legislative power.
2.ID.—A rule for prohibiting the moving of heavily laden boats in the Pasig River otherwise than by
steam or other adequate power is valid the statute declares the violation of the rule a misdemeanor.
3.ID.; PENALTY.—Quære as to a statute which authorizes the collector to make a rule not only
particularizing the offensive acts but also declaring the penalties for its violation.
4.DELEGATION OF LEGISLATIVE POWER.—The fixing of penalties for criminal offenses is the
exercise of a legislative power which can not be delegated to a subordinate authority.
21. THE PEOPLE OF THE PHILIPPINE ISLANDS and THE HONGKONG & SHANGHAI BANKING
CORPORATION, petitioners, vs. JOSE O. VERA, Judge ad interim of the Court of First
Instance of Manila, and MARIANO CU UNJIENG, respondents.
1.PROBATION ; AUTHORITY OF PROBATION COURT TO LOOK INTO CIRCUMSTANCES OF
OFFENSE; SUPERIOR AND INFERIOR COURTS; LEGAL RELATION AND ETHICAL
STANDARD.—Probation implies guilt by final judgment. While a probation court hearing a probation
case may look into the circumstances attending the commission of the offense, this does not
authorize it to reverse the findings and conclusions of the Supreme Court, either directly or indirectly,
especially where from its own admission reliance was merely had on the printed briefs, averments,
and pleadings of the parties. As observed in Shioji vs. Harvey ([1922], 43 Phil., 333, 337), and
reiterated in subsequent cases," if each and every Court of First Instance could enjoy the privilege of
overruling decisions of the Supreme Court, there would be no end to litigation, and judicial chaos
would result." A becoming modesty of inferior courts demands conscious realization of the position
that they occupy in the interrelation and operation of the integrated judicial system of the nation.
2.CONSTITUTIONAL LAW; THE PRESIDENT AND HIS VETO POWER; PRESIDENT'S VETO NOT
BINDING ON THE SUPREME COURT.—In vetoing a bill, the President may express the reasons
which he may deem proper, but his reasons are not binding upon the Supreme Court in the
determination of actual controversies submitted to it for determination. Whether or not the Executive
should express or in any manner insinuate his opinion on a matter encompassed within his
constitutional power of veto but which happens- to be at the same time pending determination before
the Supreme Court is a question of propriety for him exclusively to decide or determine. Whatever
opinion is expressed by him under these circumstances, however, cannot sway the judgment of the
court one way or another and prevent it from taking what in its opinion is the proper course of action
to take in a given case.
3.ID. ; INDEPENDENCE OF THE JUDICIARY.—If it is ever necessary to make any vehement
affirmance during this formative period of our political history, it is that the judiciary is independent of
the Executive no less than of the Legislative department of our government—independent in the
performance of its functions, undeterred by any consideration, free from politics, indifferent to
popularity, and unafraid of criticism in the accomplishment of its sworn duty as it sees it and
understands it.
4.ID.; WHEN CONSTITUTIONALITY MAY BE RAISED.—The constitutionality of an act of the
legislature will not be determined by the courts unless that question is properly raised and presented
in appropriate cases and is necessary to a determination of the case; i. e., the issue of
constitutionality must be the very lis mota presented.
5.ID. ; ID. ; RESORT TO EXTRAORDINARY LEGAL REMEDIES; ADJUDICATED CASES.—The
question of the constitutionality of an Act of the legislature is frequently raised in ordinary actions.
Nevertheless, resort may be made to extraordinary legal remedies, particularly where the remedies
in the ordinary course of law, even if available, are not plain, speedy and adequate. Thus, in Cu
Unjieng vs. Patstone ([1922], 42 Phil., 818), the Supreme Court held that the question of the
constitutionality of a statute may be raised by the petitioner in mandamus proceedings (see also 12
C. }., p. 783); and in Government of the Philippine Islands vs. Springer ([1927], 50 Phil., 259, affirmed
in Springer vs. Government of the Philippine Islands [1928], 277 U. S., 189; 72 Law. ed., 845), this
court declared an act of the legislature unconstitutional in an" action of., quo warranto brought in the
name of- the Government of the Philippines. It has also been. held "that the constitutionality of a
statute may be questioned in habeas corpus proceedings (12 C. 3., p. 783; Bailey on Habeas
Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on an application for
injunction to restrain action under the challenged statute (mandatory, see Cruz vs. Youngberg [1931],
56 Phil., 234); and even on an application for preliminary injunction where the determination of the
constitutional question is necessary to a decision of the case. (12 C. J., p. 783.) The same may be
said as regards prohibition and certiorari. (Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926],
271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial District Court [1905], 28 Nev., 280; 81 Pac.,
875; 113 A. S. R., 854; 6 Ann. Cas., 982; 1 L, R. A. [N. S.], 843, and cases cited.)
6.ID.; ; ID. ; ID. ; PROHIBITION ; RULE WHERE JURISDICTION is EXCLUSIVELY DERIVED FROM
UNCONSTITUTIONAL STATUTE.—The writ of prohibition is an extraordinary judicial writ issuing out
of a court of superior jurisdiction and directed to an inferior court, for the purpose of preventing the
inferior tribunal from usurping a jurisdiction with which it is not legally vested. The general rule,
although there is a conflict in the cases, is that the writ of prohibition will not lie where the inferior
court has jurisdiction independent of the statute the constitutionality of which is questioned, because
in such cases the inferior court having jurisdiction may itself determine the constitutionality of the
statute, and its decision may be subject to review, and consequently the complainant in such cases
ordinarily has adequate remedy by appeal without resort to the writ of prohibition. But where the
inferior court or tribunal derives its jurisdiction exclusively from an unconstitutional statute, it may be
prevented by the writ of prohibition from enforcing that statute.
7.ID. ; ID. ; ID. ; ID. ; ID. ; COURTS OF FIRST INSTANCE; LIMITED JURISDICTION IN
PROBATION CASES.—A Court of First Instance sitting in probation proceedings is a court of limited
jurisdiction. Its jurisdiction in such proceedings is conferred exclusively by Act No. 4221 of the
Philippine Legislature.
8.ID.; ID.; CONSTITUTIONALITY MUST BE RAISED AT THE EARLIEST OPPORTUNITY;
EXCEPTIONS.—As a general rule, the question of constitutionality must be raised at the earliest
opportunity, so that if not raised by the pleadings, ordinarily it may be raised at the trial, and if not
raised in the trial court, it will not be considered on appeal. But the general rule admits of exceptions.
Courts, in the exercise of sound discretion, may determine the time when a question affecting the
constitutionality of a statute should be presented. Thus, in. criminal cases, although there is a very
sharp conflict of authorities, it is said that the question may be raised for the first time at any stage of
the proceedings, either in the trial court or on appeal. Even in civil cases, it has been held that it is
the duty of a court to pass on the constitutional question, though raised for the first time on appeal, if
it appears that a determination of the question is necessary to a decision of the case. And it has been
held that a constitutional question will be considered by an appellate court at any time, where it
involves the jurisdiction of the court below.
9.ID.; ID.; PERSONAL AND SUBSTANTIAL INTEREST OF PARTY; RIGHT AND INTEREST OF
THE PEOPLE OF THE PHILIPPINES TO CHALLENGE CONSTITUTIONALITY.—The person who
impugns the validity of a statute must have a personal and substantial interest in the case such that
he has sustained, or will sustain, direct injury as a result of its enforcement. It goes without saying
that if Act No. 4221 really violates the Constitution, the People of the Philippines, in whose name the
present action is brought, has a substantial interest in having it set aside. Of greater import than the
damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that 'the state
can challenge the validity of its own laws.
10.ID. ; ID. ; RELIANCE ON PROBATION ACT; BY FISCAL DOES NOT CONSTITUTE ESTOPPEL
AGAINST THE PEOPLE.—The mere fact that. the Probation Act has been repeatedly relied upon in
the past and all that time has not been attacked as unconstitutional by the Fiscal of Manila but, on
the contrary, has been impliedly regarded by him as constitutional, is no reason for considering the
People of the Philippines estopped from now assailing its validity. For courts will pass upon a
constitutional question only when presented before it in bona fide cases for determination, and the
fact that the question has not been raised before is not a valid reason for refusing to allow it to be
raised later. The fiscal and all others are justified in relying upon the statute and treating it as valid
until it is held void by the courts in proper cases.
11.ID.; ID. ; WHEN DETERMINATION OF CONSTITUTIONALITY NECESSARY ; WAIVER IF CASE
CAN BE DECIDED ON OTHER POINTS.—While the court will meet the question with firmness,
where its decision is indispensable, it is the part of wisdom, and a just respect for the legislature,
renders it proper, to waive it, if the case in which it arises, can be decided on other points. (Ex parte
Randolph [1833], 20 F. Cas. No 11,558; 2 Brock., 447, Vide, also Hoover vs. Wood [1857], 9 Ind.,
286, 287.) It has been held that the determination of a constitutional question is necessary whenever
it is essential to the decision of the case, as where the right of a party is founded solely on a statute
the validity of which is attacked. (12 C. J., p. 782.)
12.ID. ; ID. ; ID. ; REASONS OF PUBLIC POLICY JUSTIFYING CONSTITUTIONAL INQUIRY.—The
Supreme Court will take cognizance of the fact that the Probation Act is a new addition to our statute
books and its validity has never before been passed upon by the courts; that many persons accused
and convicted of crime in the City of Manila have applied for probation; that some of them are already
on probation; that more people will likely take advantage of the Probation Act in the future; and that
the respondent M. C. U, has been at large for a period of about four years since his first conviction.
All await the decision of this court on the constitutional question. Considering, therefore, the
importance which the instant case has assumed and to prevent muItiplicity of suits, strong reasons of
public policy demand that the constitutionality of Act No. 4221 be now resolved.
13.ID. ; THE JUDICIARY; ITS DUTY TO ENFORCE THE CONSTITUTION.—Under a doctrine
peculiarly American, it is the office and duty of the judiciary to enforce the Constitution. The Supreme
.Court, by clear implication from the provisions of section 2, subsection 1, and section 10, of Article
VIII of the Constitution, may declare an act of the National Legislature invalid because in conflict with
the fundamental law. It will not shirk from its sworn duty to enforce the Constitution. And, in clear
cases, it will not hesitate to give effect to- the supreme law by setting aside a statute in conflict
therewith. This is of the essence of judicial duty.
14.ID.; ID.; STATUTORY CONSTRUCTION ; PRESUMPTION IN FAVOR OF
CONSTITUTIONALITY; RATIONALE OF PRESUMPTION.—All reasonable doubts should be
resolved in favor of the constitutionality of a statute. An act of the legislature approved by the
executive, is presumed to be within constitutional limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on the legislature as well. "The question of the validity
of every statute is first determined by the legislative department of the government itself." (U. S. vs.
Ten Yu [1912], 24 Phil., 1, 10; Case vs. Board of Health and Heiser [1913], 24 Phil., 250, 276; U. S.
vs. Joson [1913], 26 Phil., 1.) And a statute finally comes before the courts sustained by the sanction
of the executive. The members of the Legislature and the Chief Executive have taken an oath to
support the Constitution and it must be presumed that they have been true to this oath and that in
enacting and sanctioning a particular law they did not intend to violate the Constitution. Then, there is
that peculiar political philosophy which bids the judiciary to reflect the wisdom of the people as
expressed through an elective Legislature and an elective Chief Executive. It follows that the courts
will not set aside a law as violative of the Constitution except in clear cases.
15.ID.; THE PARDONING POWER UNDER THE JONES LAW AND THE CONSTITUTION OF THE
PHILIPPINES.—Section 21 of the Jones Law, in force at the time of the approval of Act No. 4221,
vests in the Governor-Gerieral of the Philippines "the exclusive power to grant pardons and reprieves
and remit fines and forfeitures." This power is now vested in the President of the Philippines. The
provisions of the Jones Law and the Constitution of the Philippines differ in some respects. The
adjective "exclusive" found in the Jones Law has been omitted from the Constitution. Under the
Jones Law, as at common law, pardon could be granted any time after the commission of the
offense, either before or after conviction. The Governor-General of the Philippines was thus
empowered, like the President of the United States, to pardon a person before the facts of his case
were fully brought to light. The framers of our Constitution thought this undesirable and, following
most of the state constitutions, provided that the pardoning power can only be exercised "after
conviction". So too, under the new Constitution, the pardoning power does not extend to "cases of
impeachment". This is also the rule generally followed in the United States.
16.ID. ; ID.; ROYAL PARDON UNDER ENGLISH LAW; POWER OF THE HOUSE OF LORDS.—The
rule in England is different. There, a royal pardon can not be pleaded in bar of an impeachment;
"but," says Blackstone, "after the impeachment has been solemnly heard and determined, it is not
understood that the king's royal grace is further restrained or abridged." The reason for the distinction
is obvious. In England, judgment on impeachment is not confined to mere "removal from office and
disqualification to hold and enjoy any office of honor, trust, or profit under the Government" but
extends to the whole punishment attached by law to the offense committed. The House of Lords, on
a conviction may, by its sentence, inflict capital punishment, perpetual banishment, fine or
imprisonment, depending upon the gravity of the offense committed, together with removal from
office and incapacity to hold office.
17.ID.; ID.; COMMUTATION AND AMNESTY UNDER THE PHILIPPINE CONSTITUTION.—Our
Constitution makes specific mention of "commutation" and of the power of the executive to impose, in
the pardons he may grant, such conditions, restrictions and limitations as he may deem proper.
Amnesty may be granted by the President under the Constitution but only with the concurrence of the
National Assembly.
18.ID. ; ID.; EXCLUSIVE CHARACTER OF THE PARDONING POWER.—The benign prerogative of
mercy reposed in the Executive cannot be taken away nor fettered by any legislative restrictions, nor
can like power be given by the legislature to any other officer or authority. The coordinate
departments of government have nothing to do with the pardoning power, since no person properly
belonging to one, of the departments can exercise any powers appertaining to either of the others
except in cases expressly provided for by the constitution. (20 R. C. L., pp. 540, 541.) Where the
pardoning power is conferred on the executive without express or implied limitations, the grant is
exclusive, and the legislature can neither exercise such power itself nor delegate it elsewhere, nor
interfere with or control the proper exercise thereof (12 C. J., pp. 838, 839).
19.ID.; PROBATION; POWER OF THE PHILIPPINE LEGISLATURE TO ENACT A PROBATION
LAW.—The Philippine Legislature, like the Congress of the United States, may legally enact a
probation law under its broad power to fix the punishment of any and all penal offenses. The
legislative power to set punishment for crime is very broad, and in the exercise of this power the
legislature may confer on trial judges, if it sees fit, the largest discretion as to the sentence to be
imposed, as to the beginning and end of the punishment, and whether it should be certain, or
indeterminate, or conditional. Indeed, the Philippine Legislature has defined all crimes and fixed the
penalties for their violation. Invariably, the legislature has demonstrated the desire to vest in the
courts—particularly the trial courts—large discretion in imposing- the penalties which the law
prescribes in particular cases. It is believed that justice can best be served by vesting this power in
the courts, they being in a position to best determine the penalties which an individual convict,
peculiarly circumstanced, should suffer.
20.ID. ; ID. ; PROBATION AND PARDON NOT COTERMINOUS; PROBATION DlSTINGUISHED
FROM REPRIEVE AND COMMUTATION.—Probation and pardon are not coterminous; nor are they
the same. They are actually distinct and different from each other, both in origin and in nature. In
probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and
completely exonerated. He is not exempt from the entire punishment which the law inflicts. Under the
Probation Act, the probationer's case is not terminated by the mere fact that he is placed on
probation. The probationer, during the period of probation, remains in legal custody—subject to the
control of the probation officer and of the court, he may be rearrested upon the non-fulfillment of the
conditions of probation and, when rearrested, may be committed to prison to serve the sentence
originally imposed upon him. Probation should also be distinguished from reprieve and from
commutation of the sentence.
21.ID. ; ID.; ID. ; PROBATION NOT IN CONFLICT WITH PARDONING POW-ER.—The Probation
Act does not conflict with the pardoning power of the Executive. The pardoning power, in respect to
those serving their probationary sentences, remains as full and complete as if the Probation Law had
never been enacted. The President may yet pardon the probationer and thus place it beyond the
power of the court to order his rearrest and imprisonment.
22.ID.; DIVISION OF POWERS.—Under our constitutional system, the powers of government are
distributed among three coordinate and substantially independent organs: the legislative, the
executive and the judicial. Each of these departments of the government derives its authority from
the Constitution which, in turn, is the highest expression of the popular will. Each has exclusive
cognizance of the matters within its jurisdiction, and is supreme within its own sphere.
23.ID. ; ID. ; DELEGATION OF LEGISLATIVE AUTHORITY; HISTORICAL DEVELOPMENT.—The
power to make laws—the legislative power—is vested in a bicameral Legislature by the Jones Law
and in a unicameral National Assembly by the Constitution. The Philippine Legislature or the National
Assembly may not escape its duties and responsibilities by delegating that power to any other body
or authority. Any attempt to abdicate the power is unconstitutional and void, on the principle that
potestas delegata non delegare potest. This principle is said to have originated with the glossators,
was introduced into English law through a misreading of Bracton, there developed as a principle of
agency, was established by Lord Coke in the English public law in decisions forbidding the
delegation of judicial power, and found its way into America as an enlightened principle of free
government. It has since become an accepted corollary of the principle of separation of powers.
24.ID.; ID.; ID.; RULE FORBIDDING DELEGATION OF LEGISLATIVE AUTHORITY NOT
INFLEXIBLE; EXCEPTIONS.—The rule, however, which forbids the delegation of legislative power is
not absolute and inflexible. It admits of exceptions. An exception sanctioned by immemorial practice
permits the central legislative body to delegate legislative powers to local authorities. On quite the
same principle, Congress is empowered to delegate legislative power to such agencies in the
territories of the United States as it may select, Courts have also sustained the delegation of
legislative power to the people at large, though some authorities maintain that this may not be done.
Doubtless, also, legislative power may be delegated by the Constitution itself. Section 14, paragraph
2, of Article VI of the Constitution of the Philippines ilippines provides that "The National As
limitations and restrictions as it may impose, -to fix within specified limits, tariff rates, import or export
quotas, and tonnage and wharfage dues." And section 16 of the Same article of the Constitution
provides that "In times of war or other national emergency, the National Assembly may by law
authorize the President, for a limited period and subject to such restrictions as it may prescribe, to
promulgate rules and regulations to carry out a declared national policy."
25.ID. ; ID. ; ID. ; TEST OF UNDUE DELEGATION ; DETAILS OF EXECUTION.—In testing whether
a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the
statute was complete in all its terms and provisions when it left the hands of the legislature so -that
nothing was left to the judgment of any other appointee or delegate of the legislature. In United
States vs. Ang Tang Ho {[1922], 43 Phil., 1), the Supreme Court adhered to the foregoing rule. The
general rule, however, is limited by another rule that to a certain extent matters of detail may be left
to be filled in by rules and regulations to be adopted or promulgated by executive officers and
administrative boards. As a rule, an act of the legislature is incomplete and hence invalid if it does not
lay down any rule or definite standard by which the administrative board may be guided in the
exercise of the discretionary powers delegated to it.
26.ID. ; ID. ; ID. ; PROBATION ACT MAKES VIRTUAL SURRENDER OF LEGISLATIVE POWER
TO PROVINCIAL BOARDS.—The Probation Act does not, by the 'force of any of its provisions, fix
and impose upon the provincial boards any standard or guide in the exercise of their discretionary
power. What is granted is a "roving commission" which enables the provincial boards to exercise
arbitrary discretion. By section 11 of the Act, the legislature does seemingly on its own authority
extend the benefits of the Probation Act to the provinces but in reality leaves the entire matter for the
various provincial boards to determine. If a provincial board does not wish to have the Act applied in
its province, all that it has to do is to decline to appropriate the needed amount for the salary of a
probation officer. This is a virtual surrender of legislative power to the provincial boards.
27.ID.; ID.; ID.; TRUE DlSTINCTION BETWEEN POWER TO MAKE LAW AND DlSCRETION AS.
TO ITS EXECUTION; ADJUDICATED CASES.—The true distinction is between the delegation of
power to make the law, which necessarily involves a discretion as to what it shall be, and conferring
an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The
first cannot be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. vs.
Clinton County Comrs. [1852], 1 Ohio St., 77, 88. See also, Sutherland on Statutory Construction,
sec. 68.) To the same effect are decisions of the Supreme Court in the Municipality of Cardona vs.
Municipality of Binañgonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of Mindoro ([1919], 39
Phil., 660) ; and Cruz vs. Youngberg ([1931], 56 Phil., 234).
28.ID. ; ID.; ID.; CONDITIONAL ENFORCEMENT OF A LAW; RELAXATION OF THE DOCTRINE.—
Laws may be made effective on certain contingencies, as by proclamation of the executive or the
adoption by the people of a particular community (6 R. C. L., 118, 170172; Cooley, Constitutional
Limitations, 8th ed., vol. I, p. 227). In Wayman vs. Southard ([1825], 10 Wheat, 1; 6 Law. ed., 253),
the Supreme Court of the United States ruled that the legisture may delegate a power not legislative
which it may itself rightfully exercise. The power to ascertain facts is such a power which may be
delegated. There is nothing essentially legislative in ascertaining the existence of facts or conditions
as the basis of the taking into effect of a law. That is a mental process common to all branches of the
government. Notwithstanding the apparent tendency to relax the rule prohibiting delegation of
legislative authority on account of the complexity arising from social and economic forces at work in
this modern industrial age, the orthodox pronouncement of Judge Cooley in his work on
Constitutional Limitations finds restatement in Professor Willoughby's treatise on the Constitution of
the United States and is accepted.
29.ID.; ID.; ID.; OPERATION OF PROBATION ACT NOT CONTINGENT ON SPECIFIED FACTS
OR CONDITIONS; DlSCRETION VESTED IN PROVINCIAL BOARDS ARBITRARY.—The
legislature has not made the operation of the Probation Act contingent upon specified facts or
conditions to be ascertained by the provincial board. It leaves the entire operation or non-operation of
the law upon the provincial boards. The discretion vested is arbitrary because it is absolute and
unlimited. A provincial board need not investigate conditions or find any- fact, or await the happening
of any specified contingency. It is bound by no rule—limited by no principle of expediency announced
by the legislature.. It may take into consideration certain facts or conditions; and, again, it may not. It
may have any purpose or no purpose at all. It need not give any reason or have any reason
whatsoever for refusing or failing to appropriate any funds for the salary of a. probation officer. This is
a matter which rests entirely at its pleasure.
30.ID. ; ID. ; ID. ; LOCAL OPTION LAWS ; EIGHT OF LOCAL SELF-GOVERNMENT; SUSPENSION
OF OPERATION OF A GENERAL LAW NOT COUNTENANCED.—The legislature may enact laws
for a particular locality different from those applicable to other localities and, while recognizing the
force of the principle hereinabove expressed, courts in many jurisdictions have sustained the
constitutionality of the submission of option laws to the vote of the people. (6 R. C. L., p. 171.) But
option laws thus sustained treat of subjects purely local in character which should receive different
treatment in different localities placed under different circumstances. Without denying the right of
local self-government and the propriety of leaving matters of purely local concern in the hands of
local authorities or for the people of small communities to pass upon in matters of general legislation
like that which treats of criminals in general, and as regards the general subject of probation,
discretion may not be vested in a manner so unqualified and absolute as provided in Act No. 4221.
31.ID.; ID. ; ID. ; PROVINCIAL BOARDS EMPOWERED TO SUSPEND OPERATION OF
PROBATION ACT.—The statute does not expressly state that the provincial boards may suspend
the operation of the Probation Act in particular provinces but, considering that, in being vested with
the authority to appropriate or not the necessary funds for the salaries of probation officers they
thereby are given absolute discretion to determine whether or not the law should take effect or
operate in their respective provinces, the provincial boards are in reality empowered by the
legislature to suspend the operation of the Probation Act in particular provinces, the Act to be held in
abeyance until the provincial boards should decide otherwise by appropriating the necessary funds.
The validity of a law is not tested by what has been done, but by what may be done under its
provisions. (Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. J., p. 786.)
32.ID. ; ID. ; ID. ; LEGISLATIVE POLICY; EXECUTION THEREOF; CONSTITUTION BOTH A
GRANT AND LlMITATION OF POWER.—A great deal of latitude should be granted to the legislature
not only in the expression of what may be termed legislative policy but in the elaboration and
execution thereof. "Without this power, legislation would become oppressive and yet imbecile."
(People vs. Reynolds, 5 Gilman, 1.) It has been said that popular government lives because of the
unexhaustible reservoir of power behind it. It is unquestionable that the mass of powers of
government is vested in the representatives of the people and that these representatives are no
further restrained under our system than by the express language of the instrument imposing the
restraint, or by particular provisions which by clear intendment, have that effect. But it should be
borne in mind that a constitution is both a grant and a limitation. of power and one of these time-
honored limitations is that, subject to certain exceptions, legislative power shall not be delegated.
33.ID.; EQUAL PROTECTION OF THE LAWS; CLASS LEGISLATION; CLASSIFICATION ON
REASONABLE BASIS.—" * * * nor shall any person be denied the equal protection of the laws." This
basic individual right sheltered by the Constitution is a restraint on all the three grand departments of
our government and on the subordinate instrumentalities and subdivisions thereof, and on many
constitutional powers, like the police power, taxation and eminent domain. What may be regarded as
a denial of the equal protection of the laws is a question not always easily determined. No rule that
will cover every case can be formulated. Class legislation discriminating against some and favoring
others is prohibited. But classification on a reasonable basis, and not made arbitrarily or capriciously,
is permitted. The classification, however, to be reasonable must be based on substantial distinctions
which make real differences; it must be germane to the purposes of the law; it must not be limited to
existing conditions only, and must apply equally to each member of the class.
34.ID. ; ID. ; ID. ; RESULTANT INEQUALITY FROM UNWARRANTED DELEGATION; PROBATION
ACT PERMITS DENIAL OF EQUAL PROTECTION.—In the case of Act No. 4221, the resultant
inequality may be said to flow from the unwarranted delegation of legislative power to the provincial
boards. While inequality may result in the application of the law and in the conferment of the benefits
therein provided, inequality is not in all cases the necessary result. But whatever may be the case, it
is clear that section 11 of the Probation Act creates a situation in which discrimination and inequality
are permitted or allowed. There are, to be sure, abundant authorities requiring actual denial of the
equal protection of the law before courts should assume the task of setting aside a law vulnerable on
that score, but premises and circumstances considered, we are of the opinion that section 11 of Act
No. 4221 permits of the denial of the equal protection of the law and is on that account bad. We see
no difference between a law which denies equal protection and a law which permits of such denial. A
law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and
illegal discrimination, it is within the constitutional prohibition. In other words, statutes may be
adjudged unconstitutional because of their effect in operation. If a law has the effect of denying the
equal protection of the law it is unconstitutional.
35.ID.; ID.; ID.; SECTION 11 OF PROBATION ACT; GOVERNMENT OF LAWS; EQUALITY
CLAUSE NOT "A ROPE OF SAND".—Under section 11 of the Probation Act, not only may said Act
be in force in one or several provinces and not be in force in the other provinces, but one province
may appropriate for the salary of a probation officer of a given year—and have probation during that
year—and thereafter decline to make further appropriation, and have no probation in subsequent
years. While this situation goes rather to the abuse of discretion which delegation implies, it is here
indicated to show that the Probation Act sanctions a situation which is intolerable in a government of
laws, and to prove how easy it is, under the Act, to make the guaranty of the equality clause but "a
rope of sand."
36.ID.; PARTIAL UNCONSTITUTIONALITY ; PRESUMPTION AGAINST MUTILATION OF
STATUTE.—In seeking the legislative intent, the presumption is against any mutilation of a statute,
and the courts will resort to elimination only where an unconstitutional provision is interjected into a
statute otherwise valid, and is so independent and separable that its removal will leave the
constitutional features and purposes of the act substantially unaffected by the process.
37.ID. ; SECTION 11 OF PROBATION ACT INSEPARABLE FROM REST OF ACT; PROBATION
AND PROBATION OFFICERS.—Section 11 of the Probation Act (No. 4221) is inseparably linked
with the other portions of the Act that with the elimination of the section what would be left is the bare
idealism of the system, devoid of any practical benefit to a large number of people who may be
deserving of the intended beneficial results of that system. The clear policy of the law, as may be
gleaned from a careful examination of the whole context, is to make the application of the system
dependent entirely upon the affirmative action of the different provincial boards. If not one of the
provinces—and this is the actual situation now—appropriates the necessary fund for the salary of a
probation officer, probation under Act No. 4221 would be illusory. There can be no probation without
a probation officer. Neither can there be a probation officer without a probation system.
38.ID.; ID.; PROBATION ACT ANALYZED; SECTIONS 10 AND 11 OF ACT; RULE OF
STATUTORY CONSTRUCTION.—The probation officers and the administrative personnel referred
to in section 10 are clearly not those probation officers required to be appointed for the provinces
under section 11. It may be said, reddendo singula singulis, that the probation officers referred to in
section 10 are to act as such, not in the various provinces, but in the central office known as the
Probation Office established in the Department of Justice, under the supervision of a Chief Probation
Officer, When the law provides that "the probation officer" shall investigate and make reports to the
court; that "the probation officer" shall supervise and visit the probationer; that the probationer shall
report to the "probation officer", shall allow "the probation officer" to visit him, shall truthfully answer
any reasonable inquiries on the part of "the probation officer" concerning his conduct or condition;
that the court shall notify "the probation officer" in writing of the period and terms of probation, it
means the probation officer who is in charge of a particular probationer in a particular province. It
never could have been the intention of the legislature, for instance, to require a probationer in
Batanes, to report to a probation officer in the City of Manila, or to require a probation officer in
Manila to visit the probationer in the said province of Batanes, to place him under his care, to
supervise his conduct, to instruct him concerning the conditions of his probation or to perform such
other functions as are assigned to him by law.
39.ID.; ID.; ID.; ID.; WlSDOM AND PROPRIETY OF LEGISLATION; PROGRESSIVE
INTERPRETATION AND JUDICIAL LEGISLATION.—That under section 10 the Secretary of Justice
may appoint as many probation officers as there are provinces or groups of provinces is, of course,
possible. But this would be arguing on what the law may be or should be and not on what the law is.
Between is and ought there is a far cry. The wisdom and propriety of legislation is not for us to pass
upon. We may think a law better otherwise than it is. But much as has been said regarding
progressive interpretation and judicial legislation we decline to amend the law. We are not permitted
to read into the law matters and provisions which are not there. Not for any purpose—not even to
save a statute from the doom of invalidity.
40.ID.; ID.; ID.; ID.; APPROPRIATION OF FUNDS; APPOINTMENT OF PROBATION OFFICERS
BY SECRETARY OF JUSTICE; JUDICIAL NOTICE.—The clear intention and policy of the law is not
to make the Insular Government defray the salaries of probation officers in the provinces but to make
the provinces defray them should they desire to have the Probation Act apply thereto. The sum of
P50,000, appropriated "to carry out the purposes of this Act", is to be applied, among other things, for
the salaries of probation officers in the central office at Manila. These probation officers are to
receive such compensation as the Secretary of Justice may fix "until such positions shall have been
included in the Appropriation Act". It was not the intention of the legislature to empower the Secretary
of Justice to fix the salaries of probation officers in the provinces or later on. to include said salaries
in an appropriation act. Considering, further, that the sum of P50,000, appropriated in section 10 is to
cover, among other things, the salaries of the administrative personnel of the Probation Office, what
would be left of the amount can hardly be said to be sufficient to pay even nominal salaries to
probation officers in the provinces, We take judicial notice of the fact that there are 48 provinces in
the Philippines, and we do not think it is seriously contended that, with the fifty thousand pesos
appropriated for the central office, there can be in. each province, as intended, a probation officer
with a salary not lower than that of a provincial fiscal. If this is correct, the contention that without
section 11 of Act No. 4221 said act is complete is an impracticable thing under the remainder of the
Act, unless it is conceded that there can be a system of probation in the provinces without probation
officers.
41.ID. ; PROBATION AS DEVELOPMENT OF MODERN PENOLOGY; PROBATION ACT AS
REPUGNANT TO FUNDAMENTAL LAW.—Probation as a development of modern penology is a
commendable system. Probation laws have been enacted, here and in other countries, to permit
what modern criminologists call the "individualization of punishment", the adjustment of the penalty to
the character of 'the criminal and the circumstances of his particular case. It provides a period of
grace in order to aid in the rehabilitation of a penitent offender. It is believed that, in many cases,
convicts may be reformed and their development into hardened criminals aborted. It, therefore, takes
advantage of an opportunity for reformation and avoids imprisonment so long as the convict gives
promise of reform. The welfare of society is its chief end and aim. The benefit to the individual convict
is merely incidental. But while probation is commendable as a system and' its implantation into the
Philippines should be welcomed, the law is set aside because of repugnancy to the fundamental law.
42.ID. ; CONSTITUTIONAL RELATIONS; RULES OF STATUTORY CONSTRUCTION; DECISIONS
OF UNITED STATES COURTS; LOCAL CONDITIONS AND ENVIRONMENT.—The constitutional
relations between the Federal and the State governments of the United States and the dual character
of the American Government is a situation which does not obtain in the Philippines. The situation of a
state of the American Union or of the District of Columbia with reference to the Federal Government
of the United States is not the situation of a province with respect to the Insular Government; the
distinct federal and state judicial organizations of the United States do not embrace the integrated
judicial system of the Philippines; "General propositions do not decide concrete cases" and "to keep
pace with * * * new developments of times and circumstances", fundamental principles should be
interpreted having in view existing local conditions and environments. People vs. Vera., 65 Phil. 56,
No. 45685 November 16, 1937
22. EASTERN SHIPPING LINES, INC., petitioner, vs. PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING OFFICER
ABDUL BASAR and KATHLEEN D. SACO, respondents.
Labor; Overseas Employment; Appeals; Non-exhaustion of administrative remedies, proper; General
rule that decisions of the POEA should first be appealed to the NLRC; Case at bar comes under one
of the exceptions, as the questions raised are questions of law; Absence of objection by private
respondent to petitioner’s direct resort to the Supreme Court.—Ordinarily, the decisions of the POEA
should first be appealed to the National Labor Relations Commission, on the theory inter alia that the
agency should be given an opportunity to correct the errors, if any, of its subordinates. This case
comes under one of the exceptions, however, as the questions the petitioner is raising are essentially
questions of law. Moreover, the private respondent herself has not objected to the petitioner’s direct
resort to this Court, observing that the usual procedure would delay the disposition of the case to her
prejudice.
Same; Same; Overseas employment and contract worker, defined; These definitions clearly apply to
the employee as he died under a contract of employment with petitioner alongside petitioner’s vessel
berthed in a foreign country.—Under the 1985 Rules and Regulations on Overseas Employment,
overseas employment is defined as “employment of a worker outside the Philippines, including
employment on board vessels plying international waters, covered by a valid contract.” A contract
worker is described as “any person working or who has worked overseas under a valid employment
contract and shall include seamen” or “any person working overseas or who has been employed by
another which may be a local employer, foreign employer, principal or partner under a valid
employment contract and shall include seamen.” These definitions clearly apply to Vitaliano Saco for
it is not disputed that he died while under a contract of employment with the petitioner and alongside
the petitioner’s vessel, the M/V Eastern Polaris, while berthed in a foreign country.
Same; Same; Same; Submission by petitioner of shipping articles to POEA and payments of
contributions to the Welfare Fund are tacit recognition of the nature of the employee’s appointment at
the time of his death.—It is worth observing that the petitioner performed at least two acts which
constitute implied or tacit recognition of the nature of Saco’s employment at the time of his death in
1985. The first is its submission of its shipping articles to the POEA for processing, formalization and
approval in the exercise of its regulatory power over overseas employment under Executive Order
No. 797. The second is its payment of the contributions mandated by law and regulations to the
Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 “for the purpose of
providing social and welfare services to Filipino overseas workers.”
Same; Same; Award of death benefits and burial expenses under Memorandum Circular of the
POEA.; Circular prescribing a standard contract by foreign and domestic shipping companies
deemed written into the contract with the employee and a postulate of the police power of the
State.—The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made
by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,
1984. This circular prescribed a standard contract to be adopted by both foreign and domestic
shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract had
earlier been required by the National Seamen Board and had been sustained in a number of cases
by this Court. The petitioner claims that it had never entered into such a contract with the deceased
Saco, but that is hardly a serious argument. In the first place, it should have done so as required by
the circular, which specifically declared that “all parties to the employment of any Filipino seamen on
board any ocean-going vessel are advised to adopt and use this employment contract effective 01
February 1984 and to desist from using any other format of employment contract effective that date.”
In the second place, even if it had not done so, the provisions of the said circular are nevertheless
deemed written into the contract with Saco as a postulate of the police power of the State.
Same; Same; Delegation of power; Legislative discretion as to the substantive contents of the law
cannot be delegated; What can be delegated is the discretion to determine how the law may be
enforced.—The second challenge is more serious as it is true that legislative discretion as to the
substantive contents of the law cannot be delegated. What can be delegated is the discretion to
determine how the law may be enforced, not what the law shall be. The ascertainment of the latter
subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the
legislature to the delegate.
Same; Same; Same; Accepted tests to determine whether or not there is valid delegation of
legislative power.—There are two accepted tests to determine whether or not there is a valid
delegation of legislative power, viz., the completeness test and the sufficient standard test. Under the
first test, the law must be complete in all its terms and conditions when it leaves the legislature such
that when it reaches the delegate the only thing he will have to do is enforce it. Under the sufficient
standard test, there must be adequate guidelines or limitations in the law to map out the boundaries
of the delegate’s authority and prevent the delegation from running riot. Both tests are intended to
prevent a total transference of legislative authority to the delegate, who is not allowed to step into the
shoes of the legislature and exercise a power essentially legislative.
Same; Same; Same; Principle of non-delegation of powers is applicable to all the 3 major powers of
the government, but is especially important in the case of the legislative power.—The principle of
non-delegation of powers is applicable to all the three major powers of the Government but is
especially important in the case of the legislative power because of the many instances when its
delegation is permitted. The occasions are rare when executive or judicial powers have to be
delegated by the authorities to which they legally pertain. In the case of the legislative power,
however, such occasions have become more and more frequent, if not necessary. This had led to
the observation that the delegation of legislative power has become the rule and its non-delegation
the exception.
Same; Same; Same; Reason for the frequent delegation of power by the legislature.—The reason is
the increasing complexity of the task of government and the growing inability of the legislature to
cope directly with the myriad problems demanding its attention. The growth of society has ramified its
activities and created peculiar and sophisticated problems that the legislature cannot be expected
reasonably to comprehend. Specialization even in legislation has become necessary. To many of the
problems attendant upon present-day undertakings, the legislature may not have the competence to
provide the required direct and efficacious, not to say, specific solutions. These solutions may,
however, be expected from its delegates, who are supposed to be experts in the particular fields
assigned to them.
Same; Same; Same; Reasons for delegation of legislative powers are particularly applicable to
administrative bodies; Delegated power to issue rules to carry out the general provisions of the
statute is called power of subordinate legislation.—The reasons given above for the delegation of
legislative powers in general are particularly applicable to administrative bodies. With the proliferation
of specialized activities and their attendant peculiar problems, the national legislature has found it
more and more necessary to entrust to administrative agencies the authority to issue rules to carry
out the general provisions of the statute. This is called the “power of subordinate legisla-tion.”
Same; Same; Same; Administrative bodies implement the broad policies by promulgating their
supplemental regulations, such as the implementing rules issued by the Department of Labor on the
new Labor Code.—With this power, administrative bodies may implement the broad policies laid
down in a statute by “filling in” the details which the Congress may not have the opportunity or
competence to provide. This is effected by their promulgation of what are known as supplementary
regulations, such as the implementing rules issued by the Department of Labor on the new Labor
Code. These regulations have the force and effect of “law.
Same; Same; Same; Memorandum Circular No. 2 which prescribes a model contract is not
challenged by the employer.—Memorandum Circular No. 2 is one such administrative regulation.
The model contract prescribed thereby has been applied in a significant number of cases without
challenge by the employer. The power of the POEA (and before it the National Seamen Board) in
requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in
the exercise of the said authority. That standard is discoverable in the executive order itself which, in
creating the Philippine Overseas Employment Administration, mandated it to protect the rights of
overseas Filipino workers to “fair and equitable employment practices.”
Same; Same; Same; Sufficient standards of delegation of legislative power.—Parenthetically, it is
recalled that this Court has accepted as sufficient standards “public interest” in People v. Rosenthal,
“justice and equity” in Antamok Gold Fields v. CIR, “public convenience and welfare” in Calalang v.
Williams, and “simplicity, economy and efficiency” in Cervantes v. Auditor General, to mention only a
few cases. In the United States, the “sense and experience of men” was accepted in Mutual Film
Corp. v. Industrial Commission, and “national security” in Hirabayashi v. United States.
Same; Same; Same; Due process, not a case of; Administrative agencies vested with two basic
powers, quasi-legislative and quasi-judicial; Power of administrative agencies to promulgate
implementing rules and regulations and interprets and applies them, not violative of due process as
long as the cardinal rights in the Ang Tibay vs. CIR case are observed.—One last challenge of the
petitioner must be dealt with to close this case. Its argument that it has been denied due process
because the same POEA that issued Memorandum Circular No. 2 has also sustained and applied it
is an uninformed criticism of administrative law itself. Administrative agencies are vested with two
basic powers, the quasi-legislative and the quasi-judicial. The first enables them to promulgate
implementing rules and regulations, and the second enables them to interpret and apply such
regulations. Examples abound: the Bureau of Internal Revenue adjudicates on its own revenue
regulations, the Central Bank on its own circulars, the Securities and Exchange Commission on its
own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board and Civil
Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their
respective administrative regulations. Such an arrangement has been accepted as a fact of life of
modern governments and cannot be considered violative of due process as long as the cardinal
rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations
are observed.
23. DIONISIO M. RABOR, petitioner, vs. CIVIL SERVICE COMMISSION, respondent.
Civil Service Commission; Administrative Law; Test of a Valid Subordinate Legislation; Statutory
Construction; In subordinate, delegated rule-making by administrative agencies, all that may be
reasonably demanded is a showing that the delegated legislation consisting of administrative
regulations are germane to the general purposes projected by the governing or enabling statute.—
Clearly, therefore, Cena when it required a considerably higher degree of detail in the statute to be
implemented, went against prevailing doctrine. It seems clear that if the governing or enabling statute
is quite detailed and specific to begin with, there would be very little need (or occasion) for
implementing administrative regulations. It is, however, precisely the inability of legislative bodies to
anticipate all (or many) possible detailed situations in respect of any relatively complex subject
matter, that makes subordinate, delegated rule-making by administrative agencies so important and
unavoidable. All that may be reasonably demanded is a showing that the delegated legislation
consisting of administrative regulations are germane to the general purposes projected by the
governing or enabling statute. This is the test that is appropriately applied in respect of Civil Service
Memorandum Circular No. 27, Series of 1990, and to this test we now turn.
Same; Same; Retirement; The extension of service of government retirees who have reached sixty-
five years of age is an area that is covered by both P.D. 1146 and the Administrative Code of
1987.—We consider that the enabling statute that should appropriately be examined is the present
Civil Service law—found in Book V, Title I, Subtitle A, of Executive Order No. 292 dated 25 July
1987, otherwise known as the Administrative Code of 1987—and not alone P.D. No. 1146, otherwise
known as the “Revised Government Service Insurance Act of 1977.” For the matter of extension of
service of retirees who have reached sixty-five (65) years of age is an area that is covered by both
statutes and not alone by Section 11 (b) of P.D. No. 1146. This is crystal clear from examination of
many provisions of the present civil service law.
Same; Same; Same; The physiological and psychological processes associated with ageing in
human beings are in fact related to the efficiency and quality of the service that may be expected
from individual persons.—We find it very difficult to suppose that the limitation of permissible
extensions of service after an employee has reached sixty-five (65) years of age has no reasonable
relationship or is not germane to the foregoing provisions of the present Civil Service Law. The
physiological and psychological processes associated with ageing in human beings are in fact
related to the efficiency and quality of the service that may be expected from individual persons.
Same; Same; Same; Civil Service Memorandum Circular No. 27, Series of 1990, more specifically
par. 1 thereof, is valid and effective, and the doctrine in Cena v. Civil Service Commission, 211
SCRA 179 (1992), is modified accordingly.—Our conclusion is that the doctrine of Cena should be
and is hereby modified to this extent: that Civil Service Memorandum Circular No. 27, Series of 1990,
more specifically paragraph (1) thereof, is hereby declared valid and effective. Section 11 (b) of P.D.
No. 1146 must, accordingly, be read together with Memorandum Circular No. 27. We reiterate,
however, the holding in Cena that the head of the government agency concerned is vested with
discretionary authority to allow or disallow extension of the service of an official or employee who has
reached sixty-five (65) years of age without completing fifteen (15) years of government service; this
discretion is, nevertheless, to be exercised conformably with the provisions of Civil Service
Memorandum Circular No. 27, Series of 1990. Rabor vs. Civil Service Commission, 244 SCRA 614,
G.R. No. 111812 May 31, 1995
24. RE: ENTITLEMENT TO HAZARD PAY OF SC MEDICAL AND DENTAL CLINIC PERSONNEL.
Public Health Workers; Hazard Pay; Essentially, hazard pay is the premium granted by law to health
workers who, by the nature of their work, are constantly exposed to various risks to health and
safety.—Hazard pay is the premium granted by law to health workers who, by the nature of their
work, are constantly exposed to various risks to health and safety. Section 21 of R.A. No. 7305
provides: SEC. 21. Hazard Allowance.—Public health workers in hospitals, sanitaria, rural health
units, main health centers, health infirmaries, barangay health stations, clinics and other health-
related establishments located in difficult areas, strife-torn or embattled areas, distressed or isolated
stations, prison camps, mental hospitals, radiation-exposed clinics, laboratories or disease-infested
areas or in areas declared under state of calamity or emergency for the duration thereof which
expose them to great danger, contagion, radiation, volcanic activity/eruption, occupational risks or
perils to life as determined by the Secretary of Health or the Head of the unit with the approval of the
Secretary of Health, shall be compensated hazard allowances equivalent to at least twenty-five
percent (25%) of the monthly basic salary of health workers receiving salary grade 19 and below,
and five percent (5%) for health workers with salary grade 20 and above.
Same; Same; The computation of the hazard allowance due should, in turn, be based on the
corresponding basic salary attached to the position of the employee concerned.—In a language too
plain to be mistaken, R.A. No. 7305 and its implementing rules mandate that the allocation and
distribution of hazard allowances to public health workers within each of the two salary grade
brackets at the respective rates of 25% and 5% be based on the salary grade to which the covered
employees belong. These same rates have in fact been incorporated into the subject Circular to
apply to all SCMDS personnel. The computation of the hazard allowance due should, in turn, be
based on the corresponding basic salary attached to the position of the employee concerned.
Administrative Law; Administrative Agencies; Fundamental is the precept in administrative law that
the rule-making power delegated to an administrative agency is limited and defined by the statute
conferring the power.—Fundamental is the precept in administrative law that the rule-making power
delegated to an administrative agency is limited and defined by the statute conferring the power. For
this reason, valid objections to the exercise of this power lie where it conflicts with the authority
granted by the legislature.
Public Health Workers; Hazard Pay; A scalar schedule of hazard pay allocation within the Salary
Grade 20 and higher bracket can indeed be achieved only by multiplying the basic monthly salary of
the covered employees by a constant factor that is 25% as the fixed legal rate.—The object, in other
words, of both the law and its implementing rules in providing a uniform rate for each of the two
groups of public health workers is to establish a scalar allocation of the cash equivalents of the
hazard allowance within each of the two groups. A scalar schedule of hazard pay allocation within
the Salary Grade 20 and higher bracket can indeed be achieved only by multiplying the basic
monthly salary of the covered employees by a constant factor that is 25% as the fixed legal rate.
Even without an express reference to the scalar schedule of salaries under R.A. No. 6758, it can
nevertheless be inferred that R.A. No. 7305, by mandating a fixed rate of hazard allowance for each
of the two groups of health workers, intends to achieve the same effect.
Administrative Law; Administrative Agencies; The Court finds that the administrative order violated
the established principle that administrative issuances cannot amend an act of Congress.—It can
only be surmised that the issuance of AO No. 2006-0011 is an attempt to amend the rates of hazard
allowance and the mechanism for its allocation as provided for in R.A. No. 7305 and the
implementing rules because it has the effect of obliterating the intended discrepancy in the cash
equivalents of the hazard allowance for employees falling within the bracket of Salary Grade 20 and
above. Without unnecessarily belaboring this point, the Court finds that the administrative order
violates the established principle that administrative issuances cannot amend an act of Congress. It
is void on its face, but only insofar as it prescribes a predetermined exact amount in cash of the
hazard allowance for public health workers with Salary Grade 20 and above.
Same; Same; When an administrative agency enters into the exercise of the specific power of
implementing a statute, it is bound by what is provided for in the same legislative enactment
inasmuch as its rule-making power is a delegated legislative power which may not be used either to
abridge the authority given by the Congress or the Constitution or to enlarge the power beyond the
scope intended.—When an administrative agency enters into the exercise of the specific power of
implementing a statute, it is bound by what is provided for in the same legislative enactment
inasmuch as its rule-making power is a delegated legislative power which may not be used either to
abridge the authority given by the Congress or the Constitution or to enlarge the power beyond the
scope intended. The power may not be validly extended by implication beyond what may be
necessary for its just and reasonable execution. In other words, the function of promulgating rules
and regulations may be legitimately exercised only for the purpose of carrying out the provisions of a
law, inasmuch as the power is confined to implementing the law or putting it into effect. Therefore,
such rules and regulations must not be inconsistent with the provisions of existing laws, particularly
the statute being administered and implemented by the agency concerned, that is to say, the statute
to which the issuance relates. Constitutional and statutory provisions control with respect to what
rules and regulations may be promulgated by such a body, as well as with respect to what fields are
subject to regulation by it.
Same; Same; The Department of Health (DOH), as the delegate administrative agency, cannot
contravene the law from which its rule-making authority has emanated.—It must be stressed that the
DOH issued the rules and regulations implementing the provisions of R.A. 7305 pursuant to the
authority expressly delegated by Congress. Hence, the DOH, as the delegate administrative agency,
cannot contravene the law from which its rule-making authority has emanated. As the cliché goes,
the spring cannot rise higher than its source.
Same; Same; Although an administrative agency is authorized to exercise its discretion in the
exercise of its power of subordinate legislation, nevertheless, no similar authority exists to validate an
arbitrary or capricious enactment of rules and regulations.—Although an administrative agency is
authorized to exercise its discretion in the exercise of its power of subordinate legislation,
nevertheless, no similar authority exists to validate an arbitrary or capricious enactment of rules and
regulations. Rules which have the effect of extending or conflicting with the authority-granting statute
do not represent a valid exercise of rule-making power but constitute an attempt by the agency to
legislate. In such a situation, it is said that the issuance becomes void not only for being ultra vires
but also for being unreasonable. The law therefore prevails over the administrative issuance.
Same; Same; Just as the power of the Department of Health (DOH) to issue rules and regulations is
confined to the clear letter of the law, the Court’s hands are likewise tied to interpreting and applying
the law.—Just as the power of the DOH to issue rules and regulations is confined to the clear letter of
the law, the Court’s hands are likewise tied to interpreting and applying the law. In other words, the
Court cannot infuse vitality, let alone a semblance of validity, to an issuance which on its face is
inconsistent with the law and therefore void, by adopting its terms and in effect implementing the
same—lest we otherwise validate an undue exercise by the DOH of its delegated and limited power
of implementation. Suffice it to say that questions relative to the seeming unfairness and
inequitableness of the law are matters that lie well within the legitimate powers of Congress and are
well beyond the competence of the Court to address.
25. ABAKADA GURO PARTY LIST vs. HON. CESAR V. PURISIMA, in his capacity as Secretary
of Finance, HON. GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of the
Bureau of Internal Revenue, and HON. ALBERTO D. LINA, in his capacity as Commissioner of
Bureau of Customs, respondents.
Judicial Review; A constitutional question is ripe for adjudication when the governmental act being
challenged has a direct adverse effect on the individual challenging it.—An actual case or
controversy involves a conflict of legal rights, an assertion of opposite legal claims susceptible of
judicial adjudication. A closely related requirement is ripeness, that is, the question must be ripe for
adjudication. And a constitutional question is ripe for adjudication when the governmental act being
challenged has a direct adverse effect on the individual challenging it. Thus, to be ripe for judicial
adjudication, the petitioner must show a personal stake in the outcome of the case or an injury to
himself that can be redressed by a favorable decision of the Court.
Same; Where an action of the legislative branch is alleged to have infringed the Constitution, it
becomes not only the right but in fact the duty of the judiciary to settle the dispute.—This
notwithstanding, public interest requires the resolution of the constitutional issues raised by
petitioners. The grave nature of their allegations tends to cast a cloud on the presumption of
constitutionality in favor of the law. And where an action of the legislative branch is alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the
dispute.
Public Officers; Public Accountability; Public office is a public trust—it must be discharged by its
holder not for his own personal gain but for the benefit of the public for whom he holds it in trust.—
Public office is a public trust. It must be discharged by its holder not for his own personal gain but for
the benefit of the public for whom he holds it in trust. By demanding accountability and service with
responsibility, integrity, loyalty, efficiency, patriotism and justice, all government officials and
employees have the duty to be responsive to the needs of the people they are called upon to serve.
Same; Presumption of Regularity; The presumption of regularity enjoyed by public officers in the
performance of their duties necessarily obtains in favor of the Bureau of Internal Revenue (BIR) and
Bureau of Customs (BOC) officials and employees.—Public officers enjoy the presumption of
regularity in the performance of their duties. This presumption necessarily obtains in favor of BIR and
BOC officials and employees. RA 9335 operates on the basis thereof and reinforces it by providing a
system of rewards and sanctions for the purpose of encouraging the officials and employees of the
BIR and the BOC to exceed their revenue targets and optimize their revenue-generation capability
and collection. The presumption is disputable but proof to the contrary is required to rebut it. It cannot
be overturned by mere conjecture or denied in advance (as petitioners would have the Court do)
specially in this case where it is an underlying principle to advance a declared public policy.
Same; Attrition Act of 2005 (R.A. No. 9335); Judicial Review; To invalidate RA 9335 based on
baseless supposition is an affront to the wisdom not only of the legislature that passed it but also of
the executive which approved it.—A law enacted by Congress enjoys the strong presumption of
constitutionality. To justify its nullification, there must be a clear and unequivocal breach of the
Constitution, not a doubtful and equivocal one. To invalidate RA 9335 based on petitioners’ baseless
supposition is an affront to the wisdom not only of the legislature that passed it but also of the
executive which approved it.
Same; Same; A system of incentives for exceeding the set expectations of a public office is not
anathema to the concept of public account-ability.—Public service is its own reward. Nevertheless,
public officers may by law be rewarded for exemplary and exceptional performance. A system of
incentives for exceeding the set expectations of a public office is not anathema to the concept of
public accountability. In fact, it recognizes and reinforces dedication to duty, industry, efficiency and
loyalty to public service of deserving government personnel.
Same; Same; Equal Protection; Equality guaranteed under the equal protection clause is equality
under the same conditions and among persons similarly situated—it is equality among equals, not
similarity of treatment of persons who are classified based on substantial differences in relation to the
object to be accomplished.—Equality guaranteed under the equal protection clause is equality under
the same conditions and among persons similarly situated; it is equality among equals, not similarity
of treatment of persons who are classified based on substantial differences in relation to the object to
be accomplished. When things or persons are different in fact or circumstance, they may be treated
in law differently. In Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54 (1974), this Court
declared: The guaranty of equal protection of the laws is not a guaranty of equality in the application
of the laws upon all citizens of the [S]tate. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected alike
by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons
merely as such, but on persons according to the circumstances surrounding them. It guarantees
equality, not identity of rights. The Constitution does not require that things which are different in fact
be treated in law as though they were the same. The equal protection clause does not forbid
discrimination as to things that are different. It does not prohibit legislation which is limited either in
the object to which it is directed or by the territory within which it is to operate.
Same; Same; Same; The equal protection clause recognizes a valid classification, that is, a
classification that has a reasonable foundation or rational basis and not arbitrary; Since the subject of
the law is the revenue-generation capability and collection of the Bureau of Internal Revenue (BIR)
and the Bureau of Customs (BOC), the incentives and/or sanctions provided in the law should
logically pertain to the said agencies.—The equal protection clause recognizes a valid classification,
that is, a classification that has a reasonable foundation or rational basis and not arbitrary. With
respect to RA9335, its expressed public policy is the optimization of the revenue-generation
capability and collection of the BIR and the BOC. Since the subject of the law is the revenue-
generation capability and collection of the BIR and the BOC, the incentives and/or sanctions provided
in the law should logically pertain to the said agencies. Moreover, the law concerns only the BIR and
the BOC because they have the common distinct primary function of generating revenues for the
national government through the collection of taxes, customs duties, fees and charges.
Delegation of Powers; Test; A law is complete when it sets forth therein the policy to be executed,
carried out or implemented by the delegate and lays down a sufficient standard when it provides
adequate guidelines or limitations in the law to map out the boundaries of the delegate’s authority
and prevent the delegation from running riot.—Two tests determine the validity of delegation of
legislative power: (1) the completeness test and (2) the sufficient standard test. A law is complete
when it sets forth therein the policy to be executed, carried out or implemented by the delegate. It
lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map
out the boundaries of the delegate’s authority and prevent the delegation from running riot. To be
sufficient, the standard must specify the limits of the delegate’s authority, announce the legislative
policy and identify the conditions under which it is to be implemented.
Same; Civil Service; Security of Tenure; Inefficiency; Incompetence; The guarantee of security of
tenure only means that an employee cannot be dismissed from the service for causes other than
those provided by law and only after due process is accorded the employee; RA 9335 lays down a
reasonable yardstick for removal (when the revenue collection falls short of the target by at least
7.5%) with due consideration of all relevant factors affecting the level of collection, a standard
analogous to inefficiency and incompetence in the performance of official duties, a ground for
disciplinary action under civil service laws.—RA 9335 in no way violates the security of tenure of
officials and employees of the BIR and the BOC. The guarantee of security of tenure only means that
an employee cannot be dismissed from the service for causes other than those provided by law and
only after due process is accorded the employee. In the case of RA 9335, it lays down a reasonable
yardstick for removal (when the revenue collection falls short of the target by at least 7.5%) with due
consideration of all relevant factors affecting the level of collection. This standard is analogous to
inefficiency and incompetence in the performance of official duties, a ground for disciplinary action
under civil service laws. The action for removal is also subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process. At any rate, this Court has
recognized the following as sufficient standards: “public interest,” “justice and equity,” “public
convenience and welfare” and “simplicity, economy and welfare.” In this case, the declared policy of
optimization of the revenue-generation capability and collection of the BIR and the BOC is infused
with public interest.
Separation of Powers; Legislative Veto; Congressional oversight is not unconstitutional per se,
meaning, it neither necessarily constitutes an encroachment on the executive power to implement
laws nor undermines the constitutional separation of powers, but to forestall the danger of
congressional encroachment “beyond the legislative sphere,” the Constitution imposes two basic and
related constraints on Congress—it may not vest itself, any of its committees or its members with
either executive or judicial power, and, when it exercises its legislative power, it must follow the
“single, finely wrought and exhaustively considered, procedures” specified under the Constitution,
including the procedure for enactment of laws and presentment; Any post-enactment congressional
measure should be limited to scrutiny and investigation—any action or step beyond that will
undermine the separation of powers guaranteed by the Constitution.—It is clear that congressional
oversight is not unconstitutional per se, meaning, it neither necessarily constitutes an encroachment
on the executive power to implement laws nor undermines the constitutional separation of powers.
Rather, it is integral to the checks and balances inherent in a democratic system of government. It
may in fact even enhance the separation of powers as it prevents the over-accumulation of power in
the executive branch. However, to forestall the danger of congressional encroachment “beyond the
legislative sphere,” the Constitution imposes two basic and related constraints on Congress. It may
not vest itself, any of its committees or its members with either executive or judicial power. And,
when it exercises its legislative power, it must follow the “single, finely wrought and exhaustively
considered, procedures” specified under the Constitution, including the procedure for enactment of
laws and presentment. Thus, any post-enactment congressional measure such as this should be
limited to scrutiny and investigation. In particular, congressional oversight must be confined to the
following: (1) scrutiny based primarily on Congress’ power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and be
heard by either of its Houses on any matter pertaining to their departments and its power of
confirmation and (2) investigation and monitoring of the implementation of laws pursuant to the
power of Congress to conduct inquiries in aid of legislation. Any action or step beyond that will
undermine the separation of powers guaranteed by the Constitution. Legislative vetoes fall in this
class.
Same; Same; Words and Phrases; Legislative veto is a statutory provision requiring the President or
an administrative agency to present the proposed implementing rules and regulations of a law to
Congress which, by itself or through a committee formed by it, retains a “right” or “power” to approve
or disapprove such regulations before they take effect; Congress has two options when enacting
legislation to define national policy within the broad horizons of its legislative competence—it can
itself formulate the details or it can assign to the executive branch the responsibility for making
necessary managerial decisions in conformity with those standards.—Legis-lative veto is a statutory
provision requiring the President or an administrative agency to present the proposed implementing
rules and regulations of a law to Congress which, by itself or through a committee formed by it,
retains a “right” or “power” to approve or disapprove such regulations before they take effect. As
such, a legislative veto in the form of a congressional oversight committee is in the form of an inward-
turning delegation designed to attach a congressional leash (other than through scrutiny and
investigation) to an agency to which Congress has by law initially delegated broad powers. It radically
changes the design or structure of the Constitution’s diagram of power as it entrusts to Congress a
direct role in enforcing, applying or implementing its own laws. Congress has two options when
enacting legislation to define national policy within the broad horizons of its legislative competence. It
can itself formulate the details or it can assign to the executive branch the responsibility for making
necessary managerial decisions in conformity with those standards. In the latter case, the law must
be complete in all its essential terms and conditions when it leaves the hands of the legislature. Thus,
what is left for the executive branch or the concerned administrative agency when it formulates rules
and regulations implementing the law is to fill up details (supplementary rule-making) or ascertain
facts necessary to bring the law into actual operation (contingent rule-making).
Congress; Statutes; Congress, in the guise of assuming the role of an overseer, may not pass upon
their legality by subjecting them to its stamp of approval without disturbing the calculated balance of
powers established by the Constitution—in exercising discretion to approve or disapprove the
Implementing Rules and Regulations based on a determination of whether or not they conformed
with the provisions of RA 9335, Congress arrogated judicial power unto itself, a power exclusively
vested in this Court by the Constitution.—Administrative regulations enacted by administrative
agencies to implement and interpret the law which they are entrusted to enforce have the force of law
and are entitled to respect. Such rules and regulations partake of the nature of a statute and are just
as binding as if they have been written in the statute itself. As such, they have the force and effect of
law and enjoy the presumption of constitutionality and legality until they are set aside with finality in
an appropriate case by a competent court. Congress, in the guise of assuming the role of an
overseer, may not pass upon their legality by subjecting them to its stamp of approval without
disturbing the calculated balance of powers established by the Constitution. In exercising discretion
to approve or disapprove the IRR based on a determination of whether or not they conformed with
the provisions of RA 9335, Congress arrogated judicial power unto itself, a power exclusively vested
in this Court by the Constitution.
Same; Same; Principle of Bicameralism; Presentment Clause; The requirement that the
implementing rules of a law be subjected to approval by Congress as a condition for their effectivity
violates the cardinal constitutional principles of bicameralism and the rule on presentment; A valid
exercise of legislative power requires the act of both chambers—it can be exercised neither solely by
one of the two chambers nor by a committee of either or both chambers.—The requirement that the
implementing rules of a law be subjected to approval by Congress as a condition for their effectivity
violates the cardinal constitutional principles of bicameralism and the rule on presentment. x x x
Legislative power (or the power to propose, enact, amend and repeal laws) is vested in Congress
which consists of two chambers, the Senate and the House of Representatives. A valid exercise of
legislative power requires the act of both chambers. Corrollarily, it can be exercised neither solely by
one of the two chambers nor by a committee of either or both chambers. Thus, assuming the validity
of a legislative veto, both a single-chamber legislative veto and a congressional committee legislative
veto are invalid.
Same; Same; Same; Every bill passed by Congress must be presented to the President for approval
or veto and in the absence of presentment to the President, no bill passed by Congress can become
a law.—Every bill passed by Congress must be presented to the President for approval or veto. In
the absence of presentment to the President, no bill passed by Congress can become a law. In this
sense, law-making under the Constitution is a joint act of the Legislature and of the Executive.
Assuming that legislative veto is a valid legislative act with the force of law, it cannot take effect
without such presentment even if approved by both chambers of Congress.
Same; Same; Publication; Subject to the indispensable requisite of publication under the due process
clause, the determination as to when a law takes effect is wholly the prerogative of Congress—as
such, it is only upon its effectivity that a law may be executed and the executive branch acquires the
duties and powers to execute the said law.—Where Congress delegates the formulation of rules to
implement the law it has enacted pursuant to sufficient standards established in the said law, the law
must be complete in all its essential terms and conditions when it leaves the hands of the legislature.
And it may be deemed to have left the hands of the legislature when it becomes effective because it
is only upon effectivity of the statute that legal rights and obligations become available to those
entitled by the language of the statute. Subject to the indispensable requisite of publication under the
due process clause, the determination as to when a law takes effect is wholly the prerogative of
Congress. As such, it is only upon its effectivity that a law may be executed and the executive branch
acquires the duties and powers to execute the said law. Before that point, the role of the executive
branch, particularly of the President, is limited to approving or vetoing the law.
Same; Same; Same; From the moment the law becomes effective, any provision of law that
empowers Congress or any of its members to play any role in the implementation or enforcement of
the law violates the principle of separation of powers and is thus unconstitutional.—From the moment
the law becomes effective, any provision of law that empowers Congress or any of its members to
play any role in the implementation or enforcement of the law violates the principle of separation of
powers and is thus unconstitutional. Under this principle, a provision that requires Congress or its
members to approve the implementing rules of a law after it has already taken effect shall be
unconstitutional, as is a provision that allows Congress or its members to overturn any directive or
ruling made by the members of the executive branch charged with the implementation of the law.
Same; Statutes; Partial Unconstitutionality; Separability Clause; The general rule is that where part of
a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if
separable from the invalid, may stand and be enforced; The presence of a separability clause in a
statute creates the presumption that the legislature intended separability, rather than complete nullity
of the statute.—In Tatad v. Secretary of the Department of Energy, 282 SCRA 361 (1997), the Court
laid down the following rules: The general rule is that where part of a statute is void as repugnant to
the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand
and be enforced. The presence of a separability clause in a statute creates the presumption that the
legislature intended separability, rather than complete nullity of the statute. To justify this result, the
valid portion must be so far independent of the invalid portion that it is fair to presume that the
legislature would have enacted it by itself if it had supposed that it could not constitutionally enact the
other. Enough must remain to make a complete, intelligible and valid statute, which carries out the
legislative intent. x x x The exception to the general rule is that when the parts of a statute are so
mutually dependent and connected, as conditions, considerations, inducements, or compensations
for each other, as to warrant a belief that the legislature intended them as a whole, the nullity of one
part will vitiate the rest. In making the parts of the statute dependent, conditional, or connected with
one another, the legislature intended the statute to be carried out as a whole and would not have
enacted it if one part is void, in which case if some parts are unconstitutional, all the other provisions
thus dependent, conditional, or connected must fall with them.
Administrative Law; To be effective, administrative rules and regulations must be published in full if
their purpose is to enforce or implement existing law pursuant to a valid delegation.—To be effective,
administrative rules and regulations must be published in full if their purpose is to enforce or
implement existing law pursuant to a valid delegation. The IRR of RA 9335 were published on May
30, 2006 in two newspapers of general circulation and became effective 15 days thereafter. Until and
unless the contrary is shown, the IRR are presumed valid and effective even without the approval of
the Joint Congressional Oversight Committee.
26. VICTORIA C. GUTIERREZ vs. DEPARTMENT OF BUDGET AND MANAGEMENT
RE: REQUEST OF SANDIGANBAYAN FOR AUTHORITY TO USE THEIR SAVINGS TO PAY
THEIR COLA DIFFERENTIAL FROM JULY 1, 1989 TO MARCH 16, 1999.
Administrative Law; Delegation of Powers; Delegated rule-making is a practical necessity in modern
governance because of the increasing complexity and variety of public functions.—Delegated rule-
making is a practical necessity in modern governance because of the increasing complexity and
variety of public functions. Congress has endowed administrative agencies like respondent DBM with
the power to make rules and regulations to implement a given legislation and effectuate its policies.
Such power is, however, necessarily limited to what the law provides. Implementing rules and
regulations cannot extend the law or expand its coverage, as the power to amend or repeal a statute
belongs to the legislature. Administrative agencies implement the broad policies laid down in a law by
“filling in” only its details. The regulations must be germane to the objectives and purposes of the law
and must conform to the standards prescribed by law.
Same; Compensation and Position Classification Act of 1989 (Republic Act No. 6758); Allowances;
Cost of Living Allowance (COLA); Cost of living allowance (COLA) is deemed already incorporated in
the standardized salary rates of government employees under the general rule of integration.—The
drawing up of the above list is consistent with Section 12 above. R.A. 6758 did not prohibit the DBM
from identifying for the purpose of implementation what fell into the class of “all allowances.” With
respect to what employees’ benefits fell outside the term apart from those that the law specified, the
DBM, said this Court in a case, needed to promulgate rules and regulations identifying those
excluded benefits. This leads to the inevitable conclusion that until and unless the DBM issues such
rules and regulations, the enumerated exclusions in items (1) to (6) remain exclusive. Thus so, not
being an enumerated exclusion, COLA is deemed already incorporated in the standardized salary
rates of government employees under the general rule of integration.
Same; Same; Same; Words and Phrases; As defined, cost of living refers to “the level of prices
relating to a range of everyday items” or “the cost of purchasing those goods and services which are
included in an accepted standard level of consumption”; Clearly, Cost of living allowance (COLA) is
not in the nature of an allowance intended to reimburse expenses incurred by officials and
employees of the government in the performance of their official functions.—In any event, the Court
finds the inclusion of COLA in the standardized salary rates proper. In National Tobacco
Administration v. Commission on Audit, 311 SCRA 755 (1999) the Court ruled that the enumerated
fringe benefits in items (1) to (6) have one thing in common—they belong to one category of privilege
called allowances which are usually granted to officials and employees of the government to defray
or reimburse the expenses incurred in the perfor-mance of their official functions. Consequently, if
these allowances are consolidated with the standardized salary rates, then the government official or
employee will be compelled to spend his personal funds in attending to his duties. On the other hand,
item (7) is a “catch-all proviso” for benefits in the nature of allowances similar to those enumerated.
Clearly, COLA is not in the nature of an allowance intended to reimburse expenses incurred by
officials and employees of the government in the performance of their official functions. It is not
payment in consideration of the fulfillment of official duty. As defined, cost of living refers to “the level
of prices relating to a range of everyday items” or “the cost of purchasing those goods and services
which are included in an accepted standard level of consumption.” Based on this premise, COLA is a
benefit intended to cover increases in the cost of living. Thus, it is and should be integrated into the
standardized salary rates.
Same; Same; Same; Inflation Connected Allowance (ICA), like Cost of Living Allowance (COLA),
falls under the general rule of integration—the Department of Budget and Management (DBM)
specifically identified it as an allowance or additional compensation integrated into the standardized
salary rates; The Insurance Commission cannot, on its own, determine what allowances are
necessary and then grant them to its officials and employees without the approval of the Department
of Budget and Management (DBM).—In this case, ICA, like COLA, falls under the general rule of
integration. The DBM specifically identified it as an allowance or additional compensation integrated
into the standardized salary rates. By its very nature, ICA is granted due to inflation and upon
determination that the current salary of officials and employees of the Insurance Commission is
insufficient to address the problem. The DBM determines whether a need for ICA exists and the fund
from which it will be taken. The Insurance Commission cannot, on its own, determine what
allowances are necessary and then grant them to its officials and employees without the approval of
the DBM.
Same; Same; Same; Section 18 of Republic Act No. 6758 was complete in itself and was operative
without the aid of any supplementary or enabling legislation—the implementing rules and regulations
were necessary only for those provisions which require further clarification and interpretation.—As
aptly pointed out by the COA, Section 18 of R.A. 6758 was complete in itself and was operative
without the aid of any supplementary or enabling legislation. The implementing rules and regulations
were necessary only for those provisions, such as item (7) of Section 12, which requires further
clarification and interpretation. Thus, notwithstanding the initial non-publication of CCC 10, the
disallowance of petitioners’ allowances and fringe benefits as COA auditing personnel assigned to
the GSIS was valid upon the effectivity of R.A. 6758.
Same; Same; Same; Publication Requirement; Administrative rules and regulations must be
published if their purpose is to enforce or implement existing law pursuant to a valid delegation.—It is
a settled rule that publication is required as a condition precedent to the effectivity of a law to inform
the public of its contents before their rights and interests are affected by the same. Administrative
rules and regulations must also be published if their purpose is to enforce or implement existing law
pursuant also to a valid delegation. Nonetheless, as previously discussed, the integration of COLA
into the standardized salary rates is not dependent on the publication of CCC 10 and NCC 59. This
benefit is deemed included in the standardized salary rates of government employees since it falls
under the general rule of integration—”all allowances.”
Same; Same; Same; Judicial Review; Statutes; Nothing is more settled than that the constitutionality
of a statute cannot be attacked collaterally because constitutionality issues must be pleaded directly
and not collaterally.—Petitioners contend that the continued grant of COLA to military and police
personnel under CCC 10 and NCC 59 to the exclusion of other government employees violates the
equal protection clause of the Constitution. But as respondents pointed out, while it may appear that
petitioners are questioning the constitutionality of these issuances, they are in fact attacking the very
constitutionality of Section 11 of R.A. 6758. It is actually this provision which allows the uniformed
personnel to continue receiving their COLA over and above their basic pay, thus: Section 11. Military
and Police Personnel.—The base pay of uniformed personnel of the Armed Forces of the Philippines
and the Integrated National Police shall be as prescribed in the salary schedule for these personnel
in R.A. 6638 and R.A. 6648. The longevity pay of these personnel shall be as prescribed under R.A.
6638, and R.A. 1134 as amended by R.A. 3725 and R.A. 6648: Provided, however, That the
longevity pay of uniformed personnel of the Integrated National Police shall include those services
rendered as uniformed members of the police, jail and fire departments of the local government units
prior to the police integration. All existing types of allowances authorized for uniformed personnel of
the Armed Forces of the Philippines and Integrated National Police such as cost of living allowance,
longevity pay, quarters allowance, subsistence allowance, clothing allowance, hazard pay and other
allowances shall continue to be authorized. Nothing is more settled than that the constitutionality of a
statute cannot be attacked collaterally because constitutionality issues must be pleaded directly and
not collaterally.
Same; Same; Same; Equal Protection Clause; Requisite; The Court is not convinced that the
continued grant of Cost of living allowance (COLA) to the uniformed personnel to the exclusion of
other national government officials run afoul of the equal protection clause of the Constitution.—In
any event, the Court is not persuaded that the continued grant of COLA to the uniformed personnel
to the exclusion of other national government officials run afoul the equal protection clause of the
Constitution. The fundamental right of equal protection of the laws is not absolute, but is subject to
reasonable classification. If the groupings are characterized by substantial distinctions that make real
differences, one class may be treated and regulated differently from another. The classification must
also be germane to the purpose of the law and must apply to all those belonging to the same class.
To be valid and reasonable, the classification must satisfy the following requirements: (1) it must rest
on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited
to existing conditions only; and (4) it must apply equally to all members of the same class.
Same; Same; Same; Same; Being in charge of the actual defense of the State and the maintenance
of peace and order, uniformed personnel are expected to be stationed virtually anywhere in the
country—they are likely to be assigned to a variety of low, moderate, and high-cost areas, and since
their basic pay does not vary based on location, the continued grant of Cost of living allowance
(COLA) is intended to help them offset the effects of living in higher cost areas.— There are valid
reasons to treat the uniformed personnel differently from other national government officials. Being in
charged of the actual defense of the State and the maintenance of internal peace and order, they are
expected to be stationed virtually anywhere in the country. They are likely to be assigned to a variety
of low, moderate, and high-cost areas. Since their basic pay does not vary based on location, the
continued grant of COLA is intended to help them offset the effects of living in higher cost areas.
27. BPI LEASING CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS,
COURT OF TAX APPEAL, AND COMMISSIONER OF INTERNAL REVENUE, respondents.
Actions; Pleadings and Practice; Attorneys; Certificate of Non-Forum Shopping; Corporation Law;
While the certificate of non-forum shopping may be signed, for and on behalf of a corporation, by a
specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in
such document, it does not mean that any lawyer, acting on behalf of the corporation he is
representing, may routinely sign a certification of non-forum shopping—the lawyer must be
“specifically authorized” in order to validly sign the certification.—As to the first issue, the Court
agrees with respondents’ contention that the petition should be dismissed outright for failure to
comply with Supreme Court Circular 28-91, now incorporated as Section 2 of Rule 42 of the Rules of
Court. The records plainly show, and this has not been denied by BLC, that the certification was
executed by counsel who has not been shown to have specific authority to sign the same for BLC. In
BA Savings Bank v. Sia, it was held that the certificate of non-forum shopping may be signed, for and
on behalf of a corporation, by a specifically authorized lawyer who has personal knowledge of the
facts required to be disclosed in such document. This ruling, however, does not mean that any
lawyer, acting on behalf of the corporation he is representing, may routinely sign a certification of
non-forum shopping. The Court emphasizes that the lawyer must be “specifically authorized” in order
validly to sign the certification.
Same; Same; Same; Same; Same; Since powers of corporations are exercised through their board
of directors and/or duly authorized officers and agents, physical acts, like the signing of documents,
can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by
specific acts of the board of directors; Being counsel of record does not vest upon a lawyer the
authority to execute the certification on behalf of his client.—Corporations have no powers except
those expressly conferred upon them by the Corporation Code and those that are implied by or are
incidental to its existence. These powers are exercised through their board of directors and/or duly
authorized officers and agents. Hence, physical acts, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate bylaws or by specific
act of the board of directors. The records are bereft of the authority of BLC’s counsel to institute the
present petition and to sign the certification of non-forum shopping. While said counsel may be the
counsel of record for BLC, the representation does not vest upon him the authority to execute the
certification on behalf of his client. There must be a resolution issued by the board of directors that
specifically authorizes him to institute the petition and execute the certification, for it is only then that
his actions can be legally binding upon BLC.
Same; Same; Same; Same; Same; Substantial Compliance Argument; The view in Dimagiba v.
Montalvo, Jr., 202 SCRA 461 (1991), to the effect that a lawyer who assumes responsibility for a
client’s cause has the duty to know the entire history of the case, especially if any litigation is
commenced, no longer holds authoritative value in light of Digital Microwave Corporation v. Court of
Appeals, 328 SCRA 286 (2000), where it was held that the reason the certification against forum
shopping is required to be accomplished by petitioner himself is that only he himself has actual
knowledge of whether or not he has initiated similar actions or proceedings in other courts or
tribunals.—The argument of substantial compliance deserves no merit, given the Court’s ruling in
Mendigorin v. Cabantog: ...The CA held that there was substantial compliance with the Rules of
Court, citing Dimagiba vs. Montalvo, Jr. [202 SCRA 641] to the effect that a lawyer who assumes
responsibility for a client’s cause has the duty to know the entire history of the case, especially if any
litigation is commenced. This view, however, no longer holds authoritative value in the light of Digital
Microwave Corporation vs. CA [328 SCRA 286], where it was held that the reason the certification
against forum shopping is required to be accomplished by petitioner himself is that only the petitioner
himself has actual knowledge of whether or not he has initiated similar actions or proceedings in
other courts or tribunals. Even counsel of record may be unaware of such fact. To our mind, this view
is more in accord with the intent and purpose of Revised Circular No. 28-91.
Administrative Law; Taxation; Administrative issuances may be distinguished according to their
nature and substance—legislative and interpretative; Revenue Regulation 19-86 was issued
pursuant to the rule-making power of the Secretary of Finance, thus making it legislative, and not
interpretative.—Administrative issuances may be distinguished according to their nature and
substance: legislative and interpretative. A legislative rule is in the matter of subordinate legislation,
designed to implement a primary legislation by providing the details thereof. An interpretative rule, on
the other hand, is designed to provide guidelines to the law which the administrative agency is in
charge of enforcing. The Court finds the questioned revenue regulation to be legislative in nature.
Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to Section
277 of the NIRC. Section 277 (now Section 244) is an express grant of authority to the Secretary of
Finance to promulgate all needful rules and regulations for the effective enforcement of the
provisions of the NIRC. In Paper Industries Corporation of the Philippines v. Court of Appeals, the
Court recognized that the application of Section 277 calls for none other than the exercise of quasi-
legislative or rule-making authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was
issued pursuant to the rule-making power of the Secretary of Finance, thus making it legislative, and
not interpretative as alleged by BLC.
Same; Same; The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v. Michel J. Lhuillier
Pawnshop, Inc., is that when an administrative rule goes beyond merely providing for the means that
can facilitate or render less cumbersome the implementation of the law and substantially increases
the burden of those governed, it behooves the agency to accord at least to those directly affected a
chance to be heard and, thereafter, to be duly informed, before the issuance is given the force and
effect of law.—The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v. Michel J.
Lhuillier Pawnshop, Inc., is that when an administrative rule goes beyond merely providing for the
means that can facilitate or render less cumbersome the implementation of the law and substantially
increases the burden of those governed, it behooves the agency to accord at least to those directly
affected a chance to be heard and, thereafter, to be duly informed, before the issuance is given the
force and effect of law. In Lhuillier and Fortune Tobacco, the Court invalidated the revenue
memoranda concerned because the same increased the tax liabilities of the affected taxpayers
without affording them due process. In this case, Revenue Regulation 19-86 would be beneficial to
the taxpayers as they are subjected to lesser taxes. Petitioner, in fact, is invoking Revenue
Regulation 19-86 as the very basis of its claim for refund. If it were invalid, then petitioner all the
more has no right to a refund.
Same; Same; Statutory Construction; The principle is well entrenched that statutes, including
administrative rules and regulations, operate prospectively only, unless the legislative intent to the
contrary is manifest by express terms or by necessary implication.—The principle is well entrenched
that statutes, including administrative rules and regulations, operate prospectively only, unless the
legislative intent to the contrary is manifest by express terms or by necessary implication. In the
present case, there is no indication that the revenue regulation may operate retroactively.
Furthermore, there is an express provision stating that it “shall take effect on January 1, 1987,” and
that it “shall be applicable to all leases written on or after the said date.” Being clear on its
prospective application, it must be given its literal meaning and applied without further interpretation.
Thus, BLC is not in a position to invoke the provisions of Revenue Regulation 19-86 for lease rentals
it received prior to January 1, 1987.
Same; Same; Same; Tax refunds are in the nature of tax exemptions and are to be strictly construed
against the person or entity claiming the exemption.—It is also apt to add that tax refunds are in the
nature of tax exemptions. As such, these are regarded as in derogation of sovereign authority and
are to be strictly construed against the person or entity claiming the exemption. The burden of proof
is upon him who claims the exemption and he must be able to justify his claim by the clearest grant
under Constitutional or statutory law, and he cannot be permitted to rely upon vague implications.
Nothing that BLC has raised justifies a tax refund.
28.Board of Trustees of the Government Service Insurance System, The vs. Velasco
Administrative Law; Civil Service; Not all rules and regulations adopted by every government agency
are to be filed with the UP Law Center.—Not all rules and regulations adopted by every government
agency are to be filed with the UP Law Center. Only those of general or of permanent character are
to be filed. According to the UP Law Center’s guidelines for receiving and publication of rules and
regulations, “interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public,” need not be filed with the UP Law Center.
29. Dagan vs. Philippine Racing Commission
Constitutional Law; Administrative Law; Requisites for the validity of an administrative issuance.—
The validity of an administrative issuance, such as the assailed guidelines, hinges on compliancewith
the following requisites: 1. Its promulgation must be authorized by the legislature; 2. It must be
promulgated in accordance with the prescribed procedure; 3. It must be within the scope of the
authority given by the legislature; 4. It must be reasonable.
Same; Same; Delegation of Powers; The rule is that what has been delegated cannot be delegated
or as expressed in the Latin maxim: potestas delegate non delegarepotest; Rule admits of
recognized exceptions such as the grant of rule-making power to administrative agencies.—The rule
is that what has been delegated cannot be delegated, or as expressed in the Latin maxim: potestas
delegate non delegarepotest. This rule is based upon the ethical principle that such delegated power
constitutes not only a right but a duty to be performed by the delegate by the instrumentality of his
own judgment acting immediately upon the matter of legislation and not through the intervening mind
of another. This rule however admits of recognized exceptions such as the grant of rule-making
power to administrative agencies. They have been granted by Congress with the authority to issue
rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become
a practical necessity in modern governance due to the increasing complexity and variety of public
functions.
Same; Same; Same; In every case of permissible delegation, there must be a showing that the
delegation itself is valid; Requisites for Validity.—In every case of permissible delegation, there must
be a showing that the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting
forth therein the policy to be executed, carried out, or implemented by the delegate; and (b) fixes a
standard—the limits of which are sufficiently determinate and determinable—to which the delegate
must conform in the performance of his functions. A sufficient standard is one which defines
legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it.
It indicates the circumstances under which the legislative command is to be effected.
30.Smart Communications, Inc. (SMART) vs. National Telecommunications Commission
(NTC)
Administrative Law; National Telecommunications Commission; Powers; Quasi-Legislative Power;
Administrative agencies possess quasilegislative or rule-making powers and quasijudicial or
administrative adjudicatory powers.—Administrative agencies possess quasi-legislative or rule-
making powers and quasi-judicial or administrative adjudicatory powers. Quasilegislative 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.
31.Conte vs. Commission on Audit
Same; Same; Same; Administrative Law; Delegation of Powers; The rule-making power of a public
administrative body is a delegated legislative power, which it may not use either to abridge the
authority given it by the Congress or the Constitution or to enlarge its power beyond the scope
intended.—It is doctrinal that in case of conflict between a statute and an administrative order, the
former must prevail. A rule or regulation must conform to and be consistent withthe provisions of the
enabling statute in order for such rule or regulation to be valid. The rule-making power of a public
administrative body is a delegated legislative power, which it may not use either to abridge the
authority given it by the Congress or the Constitution or to enlarge its power beyond the scope
intended. Constitutional and statutory provisions control withrespect to what rules and regulations
may be promulgated by such a 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. Though well-settled is the rule that retirement laws
are liberally interpreted in favor of the retiree, nevertheless, there is really nothing to interpret in
either RA 4968 or Res. 56, and correspondingly, the absence of any doubt as to the ultra-vires
nature and illegality of the disputed resolution constrains us to rule against petitioners.
32. THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff and appellant, vs. AUGUSTO A.
SANTOS, defendant and appellee.
FlSHING IN ZONE PROHIBITED BY A REGULATION OF THE SECRETARY OF AGRICULTURE
AND COMMERCE; EXCESS OF REGULATORY POWERS CONFERRED BY ACT No. 4003 AND
EXERCISE OF LEGISLATIVE POWER.—The conditional clause of section 28 of Administrative
Order No. 2, issued by the Secretary of Agriculture and Commerce, is null and void and without
effect, as constituting an excess of the regulatory power conferred upon him by section
33. THE PEOPLE OF THE PHILIPPINES, plaintiff and appellee vs. QUE Po LAY, defendant and
appellant.
1.CRIMINAL LAW; PENAL LAWS AND REGULATIONS IMPOSING PENALTIES, NEED BE
PUBLISHED IN THE OFFICIAL GAZETTE BEFORE IT MAY BECOME EFFECTIVE.—Circulars and
regulations, especially like Circular No. 20 of the Central Bank which prescribes a penalty for its
violation, should be published before becomingeffective. Before the public may be bound by its
contents, especially its penal provisions, a law, regulation or circular must be published and the
people officially and specifically informed of said contents and its penalties.
2.ID.; JURISDICTION; APPEALS; QUESTIONS THAT MAY BE RAISED FOR THE FIRST TiME ON
APPEAL.—If as a matter of fact Circular No. 20 had not been published as required by law before its
violation, then in the eyes of the law there was no such circular to be violated and consequently the
accused committed no violation of the circular, and the trial court may be said to have no jurisdiction.
This question may be raised at any stage of the proceeding whether or not raised in the court below.
People vs. Que Po Lay, 94 Phil. 640, No. 6791 March 29, 1954

34. THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. HON. MAXIMO A. MACEREN,
CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO REYES, BENJAMIN REYES,
NAZARIO AQUINO and CARLITO DEL ROSARIO, accused-appellees.
Filling; Jurisdiction; Appeals; An offense punishable with a fine up to P500.00 falls under the
concurrent jurisdiction of a provincial capital town court and the Court of First Instance. The order of
the former is directly appealable to the Supreme Court.—It is obvious that the crime of electro fishing,
which is punishable with a fine up to P500, falls within the concurrent original jurisdiction of the
inferior courts and the Court of First Instance. And since the instant case was filed in the municipal
court of Sta. Cruz, Laguna, a provincial capital, the order of dismissal rendered by that municipal
court was directly appealable to this Court, not the Court of First Instance of Laguna. 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 jurisdiction. This appeal shall be treated as
a direct appeal from the municipal court to this Court.
Fishing; Administrative law; Fishery Adm. Order No. 84 penalizing electro fishing is null and void
because the Fishery Laws under which it was issued (Act 4003 and R.A. 3512) did not expressly
prohibit electro fishing.—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
Law, Act No. 4003, and under the law creating 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.
Same; Same; Lawmaking body cannot delegate to administrative official the power to declare what
act constitute a criminal offense.—The law making body cannot delegate to an executive official the
power to declare what acts should constitute a criminal offense. It can authorize the issuance of
regulations and the imposition of the penalty provided for in the law itself.
Same; Same; Electro fishing is now punishable by virtue of P.D. 704.—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 regulation 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.
Same; Same; An administrative regulation must be in harmony with law; it must not amend an act of
the legislature.—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 provision. By such relations, of course, the law itself cannot be
extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of
Congress. x xxThe rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it has 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.
Same; Same; In a prosecution for violation of an administrative order it must clearly appear that the
order falls within the scope of the authority conferred by law.—A penal statute is strictly construed.
While an administrative agency has the right to make rules 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. x xxIn 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. People vs. Maceren, 79
SCRA 450, No. L-32166 October 18, 1977
35. MAYNARD R. PERALTA, petitioner, vs. CIVIL SERVICE COMMISSION, respondent.
Administrative Law; Administrative interpretation of the law is at best advisory for it is the courts that
finally determine what the law means.—When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative
interpretation of the law is at best advisory, for it is the courts that finally determine what the law
means. It has also been held that interpretative regulations need not be published.
Same; Administrative construction is not necessarily binding upon the courts.—Administrative
construction, if we may repeat, is not necessarily binding upon the courts. Action of an administrative
agency may be disturbed or set aside by the judicial department if there is an error of law, or abuse
of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or
the spirit of a legislative enactment.
Same; Construction by the respondent Commission of R.A. 2625 is not in accordance with the
legislative intent.—With this in mind, the construction by the respondent Commission of R.A. 2625 is
not in accordance with the legislative intent. R.A. 2625 specifically provides that government
employees are entitled to fifteen (15) days vacation leave of absence with full pay and fifteen (15 )
days sick leave with full pay, exclusive of Saturdays, Sundays and Holidays in both cases. Thus, the
law speaks of the granting of a right and the law does not provide for a distinction between those who
have accumulated leave credits and those who have exhausted their leave credits in order to enjoy
such right. Peralta vs. Civil Service Commission, 212 SCRA 425, G.R. No. 95832 August 10, 1992
36. ERWIN B. JAVELLANA, petitioner vs. DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT AND LUIS T. SANTOS, SECRETARY, respondents.
Administrative Law; Court accords great respect to the decisions and/or actions of administrative
authorities.—As a matter of policy, this Court accords great respect to the decisions and/or actions of
administrative authorities not only because of the doctrine of separation of powers but also for their
presumed knowledgeability and expertise in the enforcement of laws and regulations entrusted to
their jurisdiction.
Same; Local Government Code; Petitioner violated Memorandum Circular No. 74-58 prohibiting a
government official from engaging in the private practice of his profession if such practice would
represent interests adverse to the government.—The complaint for illegal dismissal filed by Javiero
and Catapang against City Engineer Divinagracia is in effect a complaint against the City
Government of Bago City, their real employer, of which petitioner Javellana is a councilman. Hence,
judgment against City Engineer Divinagracia would actually be a judgment against the City
Government. By serving as counsel for the complaining employees and assisting them to prosecute
their claims against City Engineer Divinagracia, the petitioner violated Memorandum Circular No. 74-
58 (in relation to Section 7[b-2] of RA 6713) prohibiting a government official from engaging in the
private practice of his profession, if such practice would represent interests adverse to the
government. Javellana vs. Department of Interior and Local Government, 212 SCRA 475, G.R. No.
102549 August 10, 1992
37. COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. HON. COURT OF APPEALS,
HON. COURT OF TAX APPEALS and FORTUNE TOBACCO CORPORATION, respondents.
Taxation; The CIR may not disregard legal requirements or applicable principles in the exercise of its
quasi-legislative powers.—Petitioner stresses on the wide and ample authority of the BIR in the
issuance of rulings for the effective implementation of the provisions of the National Internal Revenue
Code. Let it be made clear that such authority of the Commissioner is not here doubted. Like any
other government agency, however, the CIR may not disregard legal requirements or applicable
principles in the exercise of its quasi-legislative powers.
Same; RMC 37–93 cannot be viewed simply as a corrective measure or merely as construing
Section 142(c)(1) of the NIRC.—A reading of RMC 37–93, particularly considering the circumstances
under which it has been issued, convinces us that the circular cannot be viewed simply as a
corrective measure (revoking in the process the previous holdings of past Commissioners) or merely
as construing Section 142(c)(1) of the NIRC, as amended, but has, in fact and most importantly,
been made in order to place “Hope Luxury,” “Premium More” and “Champion” within the classification
of locally manufactured cigarettes bearing foreign brands and to thereby have them covered by RA
7654. Specifically, the new law would have its amendatory provisions applied to locally manufactured
cigarettes which at the time of its effectivity were not so classified as bearing foreign brands. Prior to
the issuance of the questioned circular, “Hope Luxury,” “Premium More,” and “Champion” cigarettes
were in the category of locally manufactured cigarettes not bearing foreign brand subject to 45% ad
valorem tax. Hence, without RMC 37–93, the enactment of RA 7654, would have had no new tax
rate consequence on private respondent’s products.
Same; RMC 37–93 might have infringed on uniformity of taxation.—Not insignificantly, RMC 37–93
might have likewise infringed on uniformity of taxation.
Same; Uniformity requires that all subjects or objects of taxation, similarly situated, are to be treated
alike or put on equal footing both in privileges and liabilities.—Article VI, Section 28, paragraph 1, of
the 1987 Constitution mandates taxation to be uniform and equitable. Uniformity requires that all
subjects or objects of taxation, similarly situated, are to be treated alike or put on equal footing both
in privileges and liabilities. Thus, all taxable articles or kinds of property of the same class must be
taxed at the same rate and the tax must operate with the same force and effect in every place where
the subject may be found.
Same; Court is convinced that the hastily promulgated RMC 37–93 has fallen short of a valid and
effective administrative issuance.—All taken, the Court is convinced that the hastily promulgated
RMC 37–93 has fallen short of a valid and effective administrative issuance.
Taxation; In issuing RMC 37–93 petitioner Commissioner of lnternal Revenue was exercising her
quasi-judicial or administrative adjudicatory power, consequently prior notice and hearing are
required.—It is evident from the foregoing that in issuing RMC 37–93 petitioner Commissioner of
Internal Revenue was exercising her quasi-judicial or administrative adjudicatory power. She cited
and interpreted the law, made a factual finding, applied the law to her given set of facts, arrived at a
conclusion, and issued a ruling aimed at a specific individual. Consequently prior notice and hearing
are required. It must be emphasized that even the text alone of RMC 37–93 implies that reception of
evidence during a hearing is appropriate if not necessary since it invokes BIR Ruling No. 410–88,
dated August 24, 1988, which provides that “in cases where it cannot be established or there is
dearth of evidence as to whether a brand is foreign or not.
Taxation; Petitioner was acting well within her prerogatives when she issued the questioned
Circular.—Statutorily empowered to issue rulings or opinions embodying the proper determination in
respect to classifying articles, including cigarettes, for purposes of tax assessment and collection,
petitioner was acting well within her prerogatives when she issued the questioned Circular. And in
the exercise of such prerogatives under the law, she has in her favor the presumption of regular
performance of official duty which must be overcome by clearly persuasive evidence of stark error
and grave abuse of discretion in order to be overturned and disregarded.
Same; Petitioner was well within her prerogatives in the exercise of her rule-making power to classify
articles for taxation purposes, to interpret the laws which she is mandated to administer.—The
petitioner was well within her prerogatives, in the exercise of her rule-making power, to classify
articles for taxation purposes, to interpret the laws which she is mandated to administer. In
interpreting the same, petitioner must, in general, be guided by the principles underlying taxation, i.e.,
taxes are the lifeblood of Government, and revenue laws ought to be interpreted in favor of the
Government, for Government can not survive without the funds to underwrite its varied operational
expenses in pursuit of the welfare of the society which it serves and protects.
Same; Private respondent will not be shielded by any vested rights for there are no vested rights to
speak of respecting a wrong construction of the law by administrative officials and such wrong
interpretation does not place the Government in estoppel to correct or overrule the same.—Private
respondent claims that its business will be destroyed by the imposition of additional ad valorem taxes
as a result of the effectivity of the questioned Circular. It claims that under the vested rights theory, it
cannot now be made to pay higher taxes after having been assessed for less in the past. Of course
private respondent will trumpet its losses, its interests, after all, being its sole concern. What private
respondent fails to see is the loss of revenue by the Government which, because of erroneous
determinations made by its past revenue commissioners, collected lesser taxes than what it was
entitled to in the first place. It is every citizen’s duty to pay the correct amount of taxes. Private
respondent will not be shielded by any vested rights, for there are no vested rights tospeak of
respecting a wrong construction of the law by administrative officials, and such wrong interpretation
does not place the Government in estoppel to correct or overrule the same.
Same; It is now settled that only legislative regulations and not interpretative rulings must have the
benefit of public hearing.—Private respondent concedes that under general rules of administrative
law, “a ruling which is merely ‘interpretative’ in character may not require prior notice to affected
parties before its issuance as well as a hearing” and “for this reason, in most instances, interpretative
regulations are not given the force of law.” Indeed, “interpretative regulations and those merely
internal in nature x xx need not be published.” And it is now settled that only legislative regulations
and not interpretative rulings must have the benefit of public hearing. Commissioner of lnternal
Revenue vs. Court of Appeals, 261 SCRA 236, G.R. No. 119761 August 29, 1996
38. COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE PORT OF SUBIC,
petitioners, vs. HYPERMIX FEEDS CORPORATION, respondent.
Remedial Law; Civil Procedure; Declaratory Relief; Requirements of an Action for Declaratory
Relief.—The requirements of an action for declaratory relief are as follows: (1) there must be a
justiciable controversy; (2) the controversy must be between persons whose interests are adverse;
(3) the party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue
involved must be ripe for judicial determination.
Administrative Law; Right to be Heard; When the administrative rule goes beyond merely providing
for the means that can facilitate or render least cumbersome the implementation of the law but
substantially increases the burden of those governed, it behooves the agency to accord at least to
those directly affected a chance to be heard, and thereafter to be duly informed, before that new
issuance is given the force and effect of law.—When an administrative rule is merely interpretative in
nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence
more than what the law itself has already prescribed. When, on the other hand, the administrative
rule goes beyond merely providing for the means that can facilitate or render least cumbersome the
implementation of the law but substantially increases the burden of those governed, it behooves the
agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly
informed, before that new issuance is given the force and effect of law.
Constitutional Law; Bill of Rights; Equal Protection Clause; The equal protection clause means that
no person or class of persons shall be deprived of the same protection of laws enjoyed by other
persons or other classes in the same place in like circumstances.—Going now to the content of CMO
27-3003, we likewise hold that it is unconstitutional for being violative of the equal protection clause
of the Constitution. The equal protection clause means that no person or class of persons shall be
deprived of the same protection of laws enjoyed by other persons or other classes in the same place
in like circumstances. Thus, the guarantee of the equal protection of laws is not violated ifthere is a
reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests on
substantial distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to existing
conditions only; and (4) it applies equally to all members of the same class.
Administrative Law; Delegation of Powers; Rules and regulations, which are the product of a
delegated 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 well-settled that rules and regulations, which are the product of a delegated 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 that it be not in contradiction to, but in
conformity with, the standards prescribed by law. Commissioner of Customs vs. Hypermix Feeds
Corporation, 664 SCRA 666, G.R. No. 179579 February 1, 2012
39. VICTORIAS MILLING COMPANY, INC., petitioner-appellant, vs. SOCIAL SECURITY
COMMISSION, respondent-appellee.
Statutory construction; Distinction between an administrative rule and an administrative interpretation
of law; Nature of administrative rules and regulations.—When an administrative agency promulgated
rules and regulations, it "makes" a new law with the force and effect of a valid law, while when it
renders an opinion or gives a statement of policy, it merely interprets a pre-existing law (Parker,
Administrative Law, p. 197; Davis, Administrative Law, p. 194). 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 often times left to the administrative agency
entrusted with its enforcement.
Same; Same; Binding effect of administrative rules on courts; Requisites.—A rule is binding on the
courts so long as the procedure fixed for its promulgation is followed, and its scope is within the
statutory authority granted by the legislature, even if the courts are not in agreement with the policy
stated therein or its innate wisdom (Davis, op. cit., pp. 195-197). On the other hand, administrative
interpretation of the law is at best merely advisory, for it is the courts that finally determine what the
law means.
Same; Same; Circular No. 22 of the Social Security Commission merely an advisory opinion and
need not be approved by the President.—Circular No. 22 of the Social Security Commission purports
merely to advise employers-members of the System of what, in the light of the amendment of the
law, they should include in determining the monthly compensation of their employees upon which the
social security contributions should be based. It did not add any duty or detail that was not already in
the law as amended. It merely stated and circularized the opinion of the Commission as to how the
law should be construed. Such circular, therefore, did not require presidential approval and
publication in the Official Gazette for its effectivity.
Same; Interpretation of terms or words; Rule when a term or word is specifically defined in a
statute.—While the rule is that terms or words are to be interpreted in accordance with their well-
accepted meaning in law, nevertheless, when such term or word is specifically defined in a particular
law, such interpretation must be adopted in enforcing that particular law, for it can not be gainsaid
that a particular phrase or term may have one meaning for one purpose and another meaning for
some other purpose. Victorias Milling Company, Inc. vs. Social Security Commission, 4 SCRA 627,
No. L-16704 March 17, 1962
40. NATIONAL FOOD AUTHORITY (NFA), and JUANITO M. DAVID, in his capacity as Regional
Director, NFA Regional Office No. 1, San Juan, La Union, petitioners, vs. MASADA SECURITY
AGENCY, INC., represented by its Acting President & General Manager, COL. EDWIN S.
ESPEJO (RET.), respondents.
Labor Law; Republic Act 6727; Wages, Defined.—In construing the word “wage” in Section 6 of RA
6727, reference must be had to Section 4 (a) of the same Act. It states: SEC. 4. (a) Upon the
effectivity of this Act, the statutory minimum wage rates for all workers and employees in the private
sector, whether agricultural or nonagricultural, shall be increased by twenty-five pesos (P25) per day
. . . (Emphasis supplied) The term “wage” as used in Section 6 of RA 6727 pertains to no other than
the “statutory minimum wage” which is defined under the Rules Implementing RA 6727 as the lowest
wage rate fixed by law that an employer can pay his worker. The basis thereof under Section 7 of the
same Rules is the normal working hours, which shall not exceed eight hours a day. Hence, the
prescribed increases or the additional liability to be borne by the principal under Section 6 of RA
6727 is the increment or amount added to the remuneration of an employee for an 8-hour work.
Statutory Construction; Expresiouniusest exclusion alterius; Where a statute, by its terms, is
expressly limited to certain matters, it may not, by interpretation or construction, be extended to
others.—Expresiouniusestexclusioalterius. Where a statute, by its terms, is expressly limited to
certain matters, it may not, by interpretation or construction, be extended to others. Since the
increase in wage referred to in Section 6 pertains to the “statutory minimum wage” as defined herein,
principals in service contracts cannot be made to pay the corresponding wage increase in the
overtime pay, night shift differential, holiday and rest day pay, premium pay and other benefits
granted to workers. While basis of said remuneration and benefits is the statutory minimum wage,
the law cannot be unduly expanded as to include those not stated in the subject provision.
Same; Verbalegis non estrecedendum; From the words of a statute there should be no departure.—
The settled rule in statutory construction is that if the statute is clear, plain and free from ambiguity, it
must be given its literal meaning and applied without interpretation. This plain meaning rule or
verbalegis derived from the maxim index animi sermoest (speech is the index of intention) rests on
the valid presumption that the words employed by the legislature in a statute correctly express its
intention or will and preclude the court from construing it differently. The legislature is presumed to
know the meaning of the words, to have used words advisedly, and to have expressed its intent by
use of such words as are found in the statute. Verbalegis non estrecedendum, or from the words of a
statute there should be no departure. The presumption therefore is that lawmakers are well aware
that the word “wage” as used in Section 6 means the statutory minimum wage. If their intention was
to extend the obligation of principals in service contracts to the payment of the increment in the other
benefits and remuneration of workers, it would have so expressly specified. In not so doing, the only
logical conclusion is that the legislature intended to limit the additional obligation imposed on
principals in service contracts to the payment of the increment in the statutory minimum wage.
Same; Same; It is not within the province of this Court to inquire into the wisdom of the law for
indeed, we are bound by the words of the statute; the law is applied as it is.—The general rule is that
construction of a statute by an administrative agency charged with the task of interpreting or applying
the same is entitled to great weight and respect. The Court, however, is not bound to apply said rule
where such executive interpretation, is clearly erroneous, or when there is no ambiguity in the law
interpreted, or when the language of the words used is clear and plain, as in the case at bar.
Besides, administrative interpretations are at best advisory for it is the Court that finally determines
what the law means. Hence, the interpretation given by the labor agencies in the instant case which
went as far as supplementing what is otherwise not stated in the law cannot bind this Court. It is not
within the province of this Court to inquire into the wisdom of the law for indeed, we are bound by the
words of the statute. The law is applied as it is. At any rate, the interest of the employees will not be
adversely affected if the obligation of principals under the subject provision will be limited to the
increase in the statutory minimum wage. This is so because allremuneration and benefits other than
the increased statutory minimum wage would be shouldered and paid by the employer or service
contractor to the workers concerned. Thus, in the end, all allowances and benefits as computed
under the increased rate mandated by RA 6727 and the wage orders will be received by the workers.
National Food Authority (NFA) vs. Masada Security Agency, Inc., 453 SCRA 70, G.R. No. 163448
March 8, 2005

41. SGMC REALTY CORPORATION, petitioner, vs. OFFICE OF THE PRESIDENT (OP),
RIDGEVIEW REALTY CORPORATION, SM INVESTMENTS CORPORATION, MULTI-REALTY
DEVELOPMENT CORP., HENRY SY, SR., HENRY SY, JR., HANS T. SY, MARY UY TY and
VICTOR LIM, respondents.
Remedial Law; Administrative Law; Appeal; The thirty-day period is subject to the qualification that
there are no other statutory periods of appeal applicable.—As pointed out by public respondent, the
aforecited administrative order allows aggrieved party to file its appeal with the Office of the
President within thirty (30) days from receipt of the decision complained of. Nonetheless, such thirty-
day period is subject to the qualification that there are no other statutory periods of appeal applicable.
If there are special laws governing particular cases which provide for a shorter or longer
reglementary period, the same shall prevail over the thirty-day period provided for in the
administrative order. This is in line with the rule in statutory construction that an administrative rule or
regulation, in order to be valid, must not contradict but conform to the provisions of the enabling law.
Same; Same; Same; There are special laws that mandate a shorter period of fifteen (15) days within
which to appeal a case to public respon-dent.—We note that indeed there are special laws that
mandate a shorter period of fifteen (15) days within which to appeal a case to public respondent.
First, Section 15 of Presidential Decree No. 957 provides that the decisions of the National Housing
Authority (NHA) shall become final and executory after the lapse of fifteen (15) days from the date of
receipt of the decision. Second, Section 2 of Presidential Decree No. 1344 states that decisions of
the National Housing Authority shall become final and execu-tory after the lapse of fifteen (15) days
from the date of its receipt.
Same; Same; Same; The decision of the HLURB became final and ex-ecutory upon the lapse of
fifteen days from receipt of the decision.—As the appeal filed by petitioner was not taken within the
reglementary period, the prescriptive period for perfecting an appeal continues to run. Consequently,
the decision of the HLURB became final and executory upon the lapse of fifteen days from receipt of
the decision. Hence, the decision became immutable; it can no longer be amended nor altered by
public respondent. Accordingly, inasmuch as the timely perfection of an appeal is a jurisdictional
requisite, public respondent has no more authority to entertain the petitioner’s appeal. Otherwise, any
amendment or alteration made which substantially affects the final and executory judgment would be
null and void for lack of jurisdiction. SGMC Realty Corporation vs. Office of the President, 339 SCRA
275, G.R. No. 126999 August 30, 2000
42. COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. AZUCENA T. REYES,
respondent. Commissioner of Internal Revenue vs. Reyes, 480 SCRA 382, G.R. No. 159694,
G.R. No. 163581 January 27, 2006
Taxation; Assessment; Taxpayers shall be informed in writing of the law and the facts on which the
assessment is made, otherwise, the assessment shall be void.—The second paragraph of Section
228 of the Tax Code is clear and mandatory. It provides as follows: “Sec. 228. Protesting of
Assessment.—x xxxxxxxx “The taxpayers shall be informed in writing of the law and the facts on
which the assessment is made: otherwise, the assessment shall be void.”
Same; Same; The old requirement of merely notifying the taxpayer of the CIR’s findings was
changed in 1998 to informing the taxpayer of not only the law but also of the facts on which an
assessment would be made.—RA 8424 has already amended the provision of Section 229 on
protesting an assessment. The old requirement of merely notifying the taxpayer of the CIR’s findings
was changed in 1998 to informing the taxpayer of not only the law, but also of the facts on which an
assessment would be made; otherwise, the assessment itself would be invalid.
Same; Same; Statutes; Statutory Construction; Statutes that are remedial, or that do not create new
or take away vested rights, do not fall under the general rule against the retroactive operation of
statutes; RA 8424 does not state, either expressly or by necessary implication, that pending actions
are excepted from the operation of Section 228, or that applying it to pending proceedings would
impair vested rights.—The general rule is that statutes are prospective. However, statutes that are
remedial, or that do not create new or take away vested rights, do not fall under the general rule
against the retroactive operation of statutes. Clearly, Section 228 provides for the procedure in case
an assessment is protested. The provisiondoes not create new or take away vested rights. In both
instances, it can surely be applied retroactively. Moreover, RA 8424 does not state, either expressly
or by necessary implication, that pending actions are excepted from the operation of Section 228, or
that applying it to pending proceedings would impair vested rights.
Same; Same; Same; Same; A tax regulation is promulgated by the finance secretary to implement
the provisions of the Tax Code; The absence of the regulation does not automatically mean that the
law itself would become inoperative.—The non-retroactive application of Revenue Regulation (RR)
No. 12-99 is of no moment, considering that it merely implements the law. A tax regulation is
promulgated by the finance secretary to implement the provisions of the Tax Code. While it is
desirable for the government authority or administrative agency to have one immediately issued after
a law is passed, the absence of the regulation does not automatically mean that the law itself would
become inoperative.
Same; Same; Same; Same; An administrative rule interpretive of a statute and not declarative of
certain rights and corresponding obligations, is given retroactive effect as of the date of the effectivity
of the statute.—An administrative rule interpretive of a statute, and not declarative of certain rights
and corresponding obligations, is given retroactive effect as of the date of the effectivity of the
statute. RR 12-99 is one such rule. Being interpretive of the provisions of the Tax Code, even if it was
issued only on September 6, 1999, this regulation was to retroact to January 1, 1998—a date prior to
the issuance of the preliminary assessment notice and demand letter.
Same; Same; Same; Same; In case of discrepancy between the law as amended and its
implementing but old regulation, the former necessarily prevails; Between Section 228 of the Tax
Code and the pertinent provisions of RR 12-85, the latter cannot stand because it cannot go beyond
the provision of the law.—Section 228 has replaced Section 229. The provision on protesting an
assessment has been amended. Furthermore, in case of discrepancy between the law as amended
and its implementing but old regulation, the former necessarily prevails. Thus, between Section 228
of the Tax Code and the pertinent provisions of RR 12-85, the latter cannot stand because it cannot
go beyond the provision of the law. The law must still be followed, even though the existing tax
regulation at that time provided for a different procedure. The regulation then simply providedthat
notice be sent to the respondent in the form prescribed, and that no consequence would ensue for
failure to comply with that form.
Same; Same; To proceed heedlessly with tax collection without first establishing a valid assessment
is evidently violative of the cardinal principle in administrative investigations: that taxpayers should be
able to present their case and adduce supporting evidence.—The law imposes a substantive, not
merely a formal, requirement. To proceed heedlessly with tax collection without first establishing a
valid assessment is evidently violative of the cardinal principle in administrative investigations: that
taxpayers should be able to present their case and adduce supporting evidence. In the instant case,
respondent has not been informed of the basis of the estate tax liability. Without complying with the
unequivocal mandate of first informing the taxpayer of the government’s claim, there can be no
deprivation of property, because no effective protest can be made. The haphazard shot at slapping
an assessment, supposedly based on estate taxation’s general provisions that are expected to be
known by the taxpayer, is utter chicanery.
Same; Same; Although taxes are the lifeblood of the government, their assessment and collection
should be made in accordance with law as any arbitrariness will negate the very reason for
government itself.—Even a cursory review of the preliminary assessment notice, as well as the
demand letter sent, reveals the lack of basis for—not to mention the insufficiency of—the gross
figures and details of the itemized deductions indicated in the notice and the letter. This Court cannot
countenance an assessment based on estimates that appear to have been arbitrarily or capriciously
arrived at. Although taxes are the lifeblood of the government, their assessment and collection
“should be made in accordance with law as any arbitrariness will negate the very reason for
government itself.”
Same; Same; Failure to comply with Section 228 does not only render the assessment void, but also
finds no validation in any provision in the Tax Code.—Tax laws are civil in nature. Under our Civil
Code, acts executed against the mandatory provisions of law are void, except when the law itself
authorizes the validity of those acts. Failure to comply with Section 228 does not only render the
assessment void, but also finds no validation in any provision in the Tax Code. We cannot condone
errant or enterprising tax officials, as they are expected to be vigilant and law-abiding. Commissioner
of Internal Revenue vs. Reyes, 480 SCRA 382, G.R. No. 159694, G.R. No. 163581 January 27, 2006
43. ROSARIO L. DADULO, petitioner, vs. THE HON. COURT OF APPEALS, OFFICE OF THE
OMBUDSMAN, HON. FELICIANO BELMONTE, JR., in his capacity as City Mayor of Quezon
City and GLORIA PATANGUI, respondents.
Administrative Law; Appeals; Rules of Procedure of the Office of the Ombudsman; Finality and
Execution of Decision; An appeal shall not stop the decision from being executory—in case the
penalty is suspension or removal and the respondent wins such appeal, he shall be considered as
having been under preventive suspension and shall be paid the salary and such other emoluments
that he did not receive by reason of the suspension or removal; A decision of the Office of the
Ombudsman in administrative cases shall be executed as a matter of course.—An appeal shall not
stop the decision from being executory. In case the penalty is suspension or removal and the
respondent wins such appeal, he shall be considered as having been under preventive suspension
and shall be paid the salary and such other emoluments that he did not receive by reason of the
suspension or removal. A decision of the Office of the Ombudsman in administrative cases shall be
executed as a matter of course. The Office of the Ombudsman shall ensure that the decision shall be
strictly enforced and properly implemented. The refusal or failure by any officer without just cause to
comply with an order of the Office of the Ombudsman to remove, suspend, demote, fine, or censure
shall be a ground for disciplinary action against said officer.
Same; Same; Retroactive Application of Procedural Laws; Well-settled is the rule that procedural
laws are construed to be applicable to actions pending and undetermined at the time of their
passage, and are deemed retroactive in that sense and to that extent.—Well-settled is the rule that
procedural laws are construed to be applicable to actions pending and undetermined at the time of
their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the
retroactive application of procedural laws cannot be considered violative of any personal rights
because no vested right may
Same; Same; Appeals; Considering that an appeal under Administrative Order No. 17, the
amendatory rule, shall not stop the decision of the Office of the Ombudsman from being executory,
the Court of Appeals did not commit grave abuse of discretion in denying the petitioner’s application
for injunctive relief.—This Court, in Buencamino v. Court of Appeals, 527 SCRA 747 (2007), upheld
the resolution of the Court of Appeals denying Buencamino’s application for preliminary injunction
against the immediate implementation of the suspension order against him. The Court stated therein
that considering that an appeal under Administrative Order No. 17, the amendatory rule, shall not
stop the Decision of the Office of the Ombudsman from being executory, the Court of Appeals did not
commit grave abuse of discretion in denying petitioner’s application for injunctive relief. Dadulo vs.
Court of Appeals, 534 SCRA 451, G.R. No. 175451 September 28, 2007

44. REPUBLIC OF THE PHILIPPINES, represented by NATIONAL TELECOMMUNICATIONS
COMMISSION, petitioner, vs. EXPRESS TELECOMMUNICATION CO., INC. and BAYAN
TELECOMMUNICATIONS CO., INC., respondents.
Administrative Law; Public Utilities; Telecommunications; In the regulatory telecommunications
industry, the National TelecommunicationsCommission (NTC) has the sole authority to issue
Certificates of Public Convenience and Necessity (CPCN) for the installation, operation, and
maintenance of communications facilities and services, radio communications systems, telephone
and telegraph systems.—The NTC was created pursuant to Executive Order No. 546, promulgated
on July 23, 1979. It assumed the functions formerly assigned to the Board of Communications and
the Telecommunications Control Bureau, which were both abolished under the said Executive Order.
Previously, the NTC’s functions were merely those of the defunct Public Service Commission (PSC),
created under Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act,
considering that the Board of Communications was the successor-in-interest of the PSC. Under
Executive Order No. 125-A, issued in April 1987, the NTC became an attached agency of the
Department of Transportation and Communications. In the regulatory telecommunications industry,
the NTC has the sole authority to issue Certificates of Public Convenience and Necessity (CPCN) for
the installation, operation, and maintenance of communications facilities and services, radio
communications systems, telephone and telegraph systems. Such power includes the authority to
determine the areas of operations of applicants for telecommunications services. Specifically,
Section 16 of the Public Service Act authorizes the then PSC, upon notice and hearing, to issue
Certificates of Public Convenience for the operation of public services within the Philippines
“whenever the Commission finds that the operation of the public service proposed and the
authorization to do business will promote the public interests in a proper and suitable manner.”
Same; Same; Same; Publication of Laws; National Administrative Register; There is nothing in the
Administrative Code of 1987 which implies that the filing of the rules with the UP Law Center is the
operative act that gives the rules force and effect; The National Administrative Register is merely a
bulletin of codified rules and it is furnished only to the Office of the President, Congress, all appellate
courts, the National Library, other public offices or agencies as the Congress may select, and to
other persons at a price sufficient to cover publication and mailing or distribution costs.—Respondent
Extelcom, however, contends that the NTC should have applied the Revised Rules which were filed
with the Office of the National Administrative Register on February 3, 1993. These Revised Rules
deleted the phrase “on its own initiative”; accordingly, a provisional authority may be issued only
upon filing of the proper motion before the Commission. In answer to this argument, the NTC,
through the Secretary of the Commission, issued a certification to the effect that inasmuch as the
1993 Revised Rules have not been published in a newspaper of general circulation, the NTC has
been applying the 1978 Rules. The absence of publication, coupled with the certification by the
Commissioner of the NTC stating that the NTC was still governed by the 1978 Rules, clearly indicate
that the 1993 Revised Rules have not taken effect at the time of the grant of the provisional authority
to Bayantel. The fact that the 1993 Revised Rules were filed with the UP Law Center on February 3,
1993 is of no moment. There is nothing in the Administrative Code of 1987 which implies that the
filing of the rules with the UP Law Center is the operative act that gives the rules force and effect. x
xx The National Administrative Register is merely a bulletin of codified rules and it is furnished only to
the Office of the President, Congress, all appellate courts, the National Library, other public offices or
agencies as the Congress may select, and to other persons at a price sufficient to cover publication
and mailing or distribution costs.
Same; Same; Same; Same; Publication in the Official Gazette or a newspaper of general circulation
is a condition sine qua non before statutes, rules or regulations can take effect; The Rules of Practice
and Procedure of the NTC, which implements Section 29 of the Public Service Act (C.A. 146, as
amended), fall squarely within the scope of these laws, as explicitly mentioned in the case of Tañada
v. Tuvera, 146 SCRA 446 (1986).—Publication in the Official Gazette or a newspaper of general
circulation is a condition sine qua non before statutes, rules or regulations can take effect. This is
explicit from Executive Order No. 200, which repealed Article 2 of the Civil Code, and which states
that: Laws shall take effect after fifteen days following the completion of their publication either in the
Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise
provided. The Rules of Practice and Procedure of the NTC, which implements Section 29 of the
Public Service Act (C.A. 146, as amended), fall squarely within the scope of these laws, as explicitly
mentioned in the case Tañada v. Tuvera.
Same; Same; Same; Where the records show that the amended application filed by a
telecommunications firm in fact included a motion for the issuance of a provisional authority, it cannot
be said that the NTC granted the provisional authority motu proprio.—In any event, regardless of
whether the 1978 Rules or the 1993 Revised Rules should apply, the records show that the amended
application filed by Bayantel in fact included a motion for the issuance of a provisional authority.
Hence, it cannot be said that the NTC granted the provisional authority motu proprio. The Court of
Appeals, therefore, erred when it found that the NTC issued its Order of May 3, 2000 on its own
initiative. This much is acknowledged in the Decision of the Court of Appeals: As prayer, ICC asked
for the immediate grant of provisional authority to construct, install, maintain andoperate the subject
service and to charge the proposed rates and after due notice and hearing, approve the instant
application and grant the corresponding certificate of public convenience and necessity.
Same; Same; Same; Archiving of Cases; Revival of Cases; The archiving of cases is a widely
accepted measure designed to shelve cases in which no immediate action is expected but where no
grounds exist for their outright dismissal, albeit without prejudice, and there is nothing irregular in the
revival of the application after the condition therefor is fulfilled.—The Court of Appeals also erred
when it declared that the NTC’s Order archiving Bayantel’s application was null and void. The
archiving of cases is a widely accepted measure designed to shelve cases in which no immediate
action is expected but where no grounds exist for their outright dismissal, albeit without prejudice. It
saves the petitioner or applicant from the added trouble and expense of re-filing a dismissed case.
Under this scheme, an inactive case is kept alive but held in abeyance until the situation obtains
wherein action thereon can be taken. In the case at bar, the said application was ordered archived
because of lack of available frequencies at the time, and made subject to reinstatement upon
availability of the requisite frequency. To be sure, there was nothing irregular in the revival of the
application after the condition therefor was fulfilled.
Same; Same; Same; Same; Same; Due Process; Where the order refers to a simple revival of an
archived application, it cannot be said that an oppositor’s right to procedural due process was
prejudiced if it was not given an opportunity to question the motion for revival; There is no denial of
due process where full-blown adversarial proceedings are conducted before an administrative
body.—The Court of Appeals ruled that there was a violation of the fundamental right of Extelcom to
due process when it was not afforded the opportunity to question the motion for the revival of the
application. However, it must be noted that said Order referred to a simple revival of the archived
application of Bayantel in NTC Case No. 92-426. At this stage, it cannot be said that Extelcom’s right
to procedural due process was prejudiced. It will still have the opportunity to be heard during the full-
blown adversarial hearings that will follow. In fact, the records show that the NTC has scheduled
several hearing dates for this purpose, at which all interested parties shall be allowed to register their
opposition. We have ruled that there is no denial of due process where fullblown adversarial
proceedings are conducted before an administrative body. With Extelcom having fully participated in
the proceedings, and indeed, given the opportunity to file its opposition to the application, there was
clearly no denial of its right to due process.
Same; Same; Same; Same; Same; The requirements of notice and publication of the application are
no longer necessary where the application is a mere revival of an application which has already been
published earlier.—The requirements of notice and publication of the application is no longer
necessary inasmuch as the application is a mere revival of an application which has already been
published earlier. At any rate, the records show that all of the five (5) CMTS operators in the country
were duly notified and were allowed to raise their respective oppositions to Bayan-tel’s application
through the NTC’s Order dated February 1, 2000.
Same; Same; Same; Public Telecommunications Policy Act of the Philippines (R.A. No. 7925);
Among the declared national polices under R.A. No. 7925 is the healthy competition among
telecommunications carriers, and clearly the need for a healthy competitive environment in
telecommunications is sufficient impetus for the NTC to consider all those applicants who are willing
to offer competition, develop the market and provide the environment necessary for greater public
service.—It should be borne in mind that among the declared national policies under Republic Act
No. 7925, otherwise known as the Public Telecommunications Policy Act of the Philippines, is the
healthy competition among telecommunications carriers, to wit: A healthy competitive environment
shall be fostered, one in which telecommunications carriers are free to make business decisions and
to interact with one another in providing telecommunications services, with the end in view of
encouraging their financial viability while maintaining affordable rates. The NTC is clothed with
sufficient discretion to act on matters solely within its competence. Clearly, the need for a healthy
competitive environment in telecommunications is sufficient impetus for the NTC to consider all those
applicants who are willing to offer competition, develop the market and provide the environment
necessary for greater public service. This was the intention that came to light with the issuance of
Memorandum Circular 9-3-2000, allocating new frequency bands for use of CMTS.
Same: Same; Same; Exhaustion of Administrative Remedies; The rule is well-entrenched that a party
must exhaust all administrative remedies before resorting to the courts—the premature invocation of
the intervention of the court is fatal to one’s cause of action.—We now come to the issue of
exhaustion of administrative remedies. The rule is well-entrenched that a party must exhaust all
administrative remedies before resorting to the courts. The premature invocation of the intervention
of the court is fatal to one’s cause of action. This rule would not only give the administrative agency
an opportunity to decide the matter by itself correctly, but would also prevent the unnecessary and
premature resort tocourts. In the case of Lopez v. City of Manila, we held: As a general rule, where
the law provides for the remedies against the action of an administrative board, body or officer, relief
to courts can be sought only after exhausting all remedies provided. The reason rests upon the
presumption that the administrative body, if given the chance to correct its mistake or error, may
amend its decision on a given matter and decide it properly. Therefore, where a remedy is available
within the administrative machinery, this should be resorted to before resort can be made to the
courts, not only to give the administrative agency the opportunity to decide the matter by itself
correctly, but also to prevent unnecessary and premature resort to courts.
Same; Same; Same; Certiorari; Motions for Reconsideration; It is well-settled that the filing of a
motion for reconsideration is a prerequisite to the filing of a special civil action for certiorari;
Exceptions.—Clearly, Extelcom violated the rule on exhaustion of administrative remedies when it
went directly to the Court of Appeals on a petition for certiorari and prohibition from the Order of the
NTC dated May 3, 2000, without first filing a motion for reconsideration. It is well-settled that the filing
of a motion for reconsideration is a prerequisite to the filing of a special civil action for certiorari. The
general rule is that, in order to give the lower court the opportunity to correct itself, a motion for
reconsideration is a prerequisite to certiorari. It also basic that petitioner must exhaust all other
available remedies before resorting to certiorari. This rule, however, is subject to certain exceptions
such as any of the following: (1) the issues raised are purely legal in nature, (2) public interest is
involved, (3) extreme urgency is obvious, or (4) special circumstances warrant immediate or more
direct action.
Same; Same; Same; Same; Same; That the Order of the NTC became immediately executory does
not mean that the remedy of filing a motion for reconsideration is foreclosed to the petitioner.—This
case does not fall under any of the recognized exceptions to this rule. Although the Order of the NTC
dated May 3, 2000 granting provisional authority to Bayantel was immediately executory, it did not
preclude the filing of a motion for reconsideration. Under the NTC Rules, a party adversely affected
by a decision, order, ruling or resolution may within fifteen (15) days file a motion for reconsideration.
That the Order of the NTC became immediately executory does not mean that the remedy of filing a
motion for reconsideration is foreclosed to the petitioner.
Same; Same; Same; Same; The general rule is that purely administrative and discretionary functions
may not be interfered with by the courts—courts have no supervising power over the proceedings
and actions of the administrative departments of the government; The established exception to the
rule is where the issuing authority has gone beyond its statutory authority, exercised unconstitutional
powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion.—
The Court of Appeals erred in annulling the Order of the NTC dated May 3, 2000, granting Bayantel a
provisional authority to install, operate and maintain CMTS. The general rule is that purely
administrative and discretionary functions may not be interfered with by the courts. Thus, in Lacuesta
v. Herrera, it was held: x xx (T)he powers granted to the Secretary of Agriculture and Commerce
(natural resources) by law regarding the disposition of public lands such as granting of licenses,
permits, leases and contracts, or approving, rejecting, reinstating, or canceling applications, are all
executive and administrative in nature. It is a well recognized principle that purely administrative and
discretionary functions may not be interfered with by the courts. (Coloso vs. Board of Accountancy,
G.R. No. L-5750, April 20, 1953) In general, courts have no supervising power over the proceedings
and actions of the administrative departments of the government. This is generally true with respect
to acts involving the exercise of judgement or discretion and findings of fact. (54 Am. Jur. 558-559) x
xx. The established exception to the rule is where the issuing authority has gone beyond its statutory
authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty
or with grave abuse of discretion. None of these obtains in the case at bar.
Same; Same; Same; Same; In petitions for certiorari, evidentiary matters or matters of fact raised in
the court below are not proper grounds nor may such be ruled upon the proceedings.—In petitions
for certiorari, evidentiary matters or matters of fact raised in the court below are not proper grounds
nor may such be ruled upon in the proceedings. As held in National Federation of Labor v. NLRC: At
the outset, it should be noted that a petition for certiorari under Rule 65 of the Rules of Court will
prosper only if there is a showing of grave abuse of discretion or an act without or in excess of
jurisdiction on the part of the national Labor Relations Commission. It does not include an inquiry as
to the correctness of the evaluation of evidence which was the basis of the labor official or officer in
determining his conclusion. It is not for this Court to re-examine conflicting evidence, re-evaluate the
credibility of witnesses nor substitute the findings of fact of an administrative tribunal which has
gained expertise in its special field. Considering that the findings of fact of the labor arbiterand the
NLRC are supported by evidence on record, the same must be accorded due respect and finality.
Same; Same; Same; Same; Courts will not interfere in matters which are addressed to the sound
discretion of the government agency entrusted with the regulation of activities coming under the
special and technical training and knowledge of such agency; Administrative agencies are given a
wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude
which includes the authority to take judicial notice of facts within its special competence.—This Court
has consistently held that the courts will not interfere in matters which are addressed to the sound
discretion of the government agency entrusted with the regulation of activities coming under the
special and technical training and knowledge of such agency. It has also been held that the exercise
of administrative discretion is a policy decision and a matter that can best be discharged by the
government agency concerned, and not by the courts. In Villanueva v. Court of Appeals it was held
that findings of fact which are supported by evidence and the conclusion of experts should not be
disturbed. This was reiterated in Metro Transit Organization, Inc. v. National Labor Relations
Commission, wherein it was ruled that factual findings of quasi-judicial bodies which have acquired
expertise because their jurisdiction is confined to specific matters are generally accorded not only
respect but even finality and are binding even upon the Supreme Court if they are supported by
substantial evidence. Administrative agencies are given a wide latitude in the evaluation of evidence
and in the exercise of its adjudicative functions. This latitude includes the authority to take judicial
notice of facts within its special competence.
Courts; Supreme Court; The divisions of the Supreme Court are not to be considered as separate
and distinct courts—the Supreme Court remains a unit notwithstanding that it works in divisions.—
This Court finds that the Manifestations of Extelcom alleging forum shopping on the part of the NTC
and Bayantel are not impressed with merit. The divisions of the Supreme Court are not to be
considered as separate and distinct courts. The Supreme Court remains a unit notwithstanding that it
works in divisions. Although it may have three divisions, it is but a single court. Actions considered in
any of these divisions and decisions rendered therein are, in effect, by the same Tribunal. The
divisions of this Court are not to be considered as separate and distinct courts but as divisions of one
and the same court.
Same; Forum Shopping; Circular No. 28-91 was designed to serve as an instrument to promote and
facilitate the orderly administration of justice and should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective or the goal of all rules of
procedure—which is to achieve substantial justice as expeditiously as possible.—The rules on forum
shopping should not be literally interpreted. We have stated thus: It is scarcely necessary to add that
Circular No. 28-91 must be so interpreted and applied as to achieve the purposes projected by the
Supreme Court when it promulgated that circular. Circular No. 28-91 was designed to serve as an
instrument to promote and facilitate the orderly administration of justice and should not be interpreted
with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all
rules of procedure—which is to achieve substantial justice as expeditiously as possible.
Same; Same; Even assuming that separate actions have been filed by two different parties involving
essentially the same subject matter, no forum shopping was committed where the parties did not
resort to multiple judicial remedies.—Even assuming that separate actions have been filed by two
different parties involving essentially the same subject matter, no forum shopping was committed as
the parties did not resort to multiple judicial remedies. The Court, therefore, directed the
consolidation of the two cases because they involve essentially the same issues. It would also
prevent the absurd situation wherein two different divisions of the same court would render altogether
different rulings in the cases at bar.
Same; Parties; Administrative Law; National Telecommunications Commission; The NTC has legal
standing to file and initiate legal action in cases where it is clear that its inaction would result in an
impairment of its ability to execute and perform its functions.—We rule, likewise, that the NTC has
legal standing to file and initiate legal action in cases where it is clear that its inaction would result in
an impairment of its ability to execute and perform its functions. Similarly, we have previously held in
Civil Service Commission v. Dacoycoy that the Civil Service Commission, as an aggrieved party,
may appeal the decision of the Court of Appeals to this Court.
Same; Actions; Appeals; Certiorari; While Rule 65 of the Rules of Civil Procedure provides that public
respondents shall not appear in or file an answer or comment to the petition or any pleading therein,
no similar proscription exists under Rule 45.—As correctly stated by the NTC, the rule invoked by
Extelcom is Rule 65 of the Rules of Civil Procedure, which provides that public respondents shall not
appear in or file an answer orcomment to the petition or any pleading therein. The instant petition, on
the other hand, was filed under Rule 45 where no similar proscription exists. Republic vs. Express
Telecommunication Co., Inc., 373 SCRA 316, G.R. No. 147096, G.R. No. 147210 January 15, 2002
45. SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT), petitioner; vs. Hon.
AMADO G. INCIONG, Deputy Minister of Labor and CAGAYAN COCA-COLA FREE WORKERS
UNION, respondents.
Labor Law; 13th Month Pay; Computation of the 13th month pay under Presidential Decree No. 851
excludes from the basic salary all earnings and other remunerations paid by an employer to an
employee.—Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree
851 is even more emphatic in declaring that earnings and other remunerations which are not part of
the basic salary shall not be included in the computation of the 13th-month pay. While doubt may
have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which
defines basic salary to include all remunerations or earnings paid by an employer to an employee,
this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which
categorically, exclude from the definition of basic salary earnings and other remunerations paid by
employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto
been the subject of a broad inclusion is now a subject of broad exclusion. The Supplementary Rules
and Regulations cure the seeming tendency of the former rules to include all remunerations and
earnings within the definition of basic salary.
Same; Same; Same; Phrase “earnings and other remunerations deemed not part of basic salary,”
interpreted.—The all-embracing phrase “earnings and other remunerations” which are deemed not
part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves,
premium for works performed on rest days and special holidays, pays for regular holidays and night
differentials. As such they are deemed not part of the basic salary and shall not be considered in the
computation of the 13th-month pay. If they were not so excluded, it is hard to find any “earnings and
other remunerations” expressly excluded in the computation of the 13th-month pay. Then the
exclusionary provision would prove to be idle and with no purpose.
Same; Same; Same; Basic Salary; Overtime pay and premium for special holiday considered
additional compensation and are excluded from the definition of basic salary.—It is clear that
overtime pay is an additional compensation other than and added to the regular wage or basic
salary, for reason of which such is categorically excluded from the definition of basic salary under the
Supplementary Rules and Regulations Implementing Presidential Decree 851. x xx It is likewise clear
that premium for special holiday which is at least 30% of the regular wage is an additional
compensation other than and added to the regular wage or basic salary. For similar reason it shall
not be considered in the computation of the 13th-month pay. San Miguel Corp. vs. Inciong, 103
SCRA 139, No. L-49774 February 24, 1981
46. ASTURIAS SUGAR CENTRAL, INC., petitioner, vs. COMMISSIONER OF CUSTOMS and
COURT OF TAX APPEALS, respondents.
Statutory construction; Administrative or executive interpretations of statutes; Weight of consideration
where statute has not been interpreted by court of last resort.—Where the court of last resort has not
previously interpreted the statute, the rule is that courts will give consideration to construction by
administrative or executive departments of the State.
Same; Same; Same; Interpretation of office charged with enforcement of statute.—The construction
of the office charged with implementing and enforcing the provisions of a statute should be given
controlling weight.
Same; Construction of tax statutes; Rule on exemptions.—Exemption from taxation are not favored,
and tax statutes are to be construed in strictissimi juris against the taxpayer and liberally in favor of
the taxing authority.
Taxation; Customs and Tariff Code; One-year period in Section, 23 of Philippine Tariff Act of 1909 is
non-extendible.—The one-year period prescribed in section 23 of Philippine Tariff Act of 1909 is non-
extendible and compliance therewith is mandatory.
Same; Same; Customs Administrative Order 389; "Jute bags" included in phrase "cylinders and other
containers."—The Philippine Tariff Act of 1909 and the Tariff and Customs Code, which
Administrative Order 389 seeks to implement, speak of "containers" in general, The enumeration
following the word "containers" in the said statutes serves merely to give examples of containers and
not to specify the particular kinds thereof. There is, therefore, no reason to suppose that the customs
authorities had intended, in Customs Administrative Order 389, to circumscribe the scope of the word
"container" any more than the statutes sought to be implemented actually intended to do.
Same; Same; Drawbacks; Effect of availment of Section 105 (x).—Where an importer has opted to
take advantage of the provisions of section 105(x), he may not, after having failed to comply with the
conditions imposed thereby, avoid the consequences of such failure by being allowed a drawback
under section 106(b) of the same Act without having complied with the conditions of the latter
section.
Statutory construction; Parts of statute should be harmonized.—A construction should be avoided
which affords an opportunity to defeat compliance with the terms of a statute. Rather, courts should
proceed on the theory that parts of a statute may be harmonized and reconciled with each other.