Solicitor General vs.

Metropolitan Manila Authority

Facts: On July 13, 1990 the Court held in the case of Metropolitan Traffic Command,West Traffic District
vs. Hon. Arsenio M. Gonong, that the confiscation of the licenseplates of motor vehicles for traffic
violations was not among the sanctions thatcould be imposed by the Metro Manila Commission under PD
1605 and waspermitted only under the conditions laid down by LOI 43 in the case of stalledvehicles
obstructing the public streets. Even the confiscation of drivers licenses fortraffic violations was not
directly prescribed or allowed by the decree. After nomotion for reconsideration of the decision was filed
the judgment became final andexecutor.
Withstanding the Gonong decision still violations of the said decisiontranspired, wherein there were
several persons who sent complaint letters to theCourt regarding the confiscation of drivers licenses
and removal of license platenumbers.
On May 24, 1990 the MMA issued Ordinance No. 11, Series of 1991,authorizing itself to detach license
plate/tow and impoundattended/unattended/abandoned motor vehicles illegally parked or obstructing
theflow of traffic in Metro Manila.
On July 2, 1991, the Court issued a resolution regarding the matter whichstated that the Ordinance No.
11, Section 2 appears to be in conflict with thedecision of the Court, and that the Court has received
several complaints againstthe enforcement of such ordinance
Issue: W/N Ordinance No. 11 Series of 1991 and Ordinance No. 7, Series of 1998 arevalid in the exercise
of such delegated power to local government acting only asagents of the national legislature?
Held: No, the Court rendered judgment: 1) declaring Ordinance No. 11, Series of 1991, of the MMA and
Ordinance No. 7, Series of 1998, of the Municipality of Mandaluyong, Null and Void;
and 2) enjoining all law-enforcement authorities inMetropolitan Manila from removing the license plates
of motor vehicles (exceptwhen authorized under LOI43) and confiscating drivers licenses for traffic
violationswithin the said area.
To test the validity of said acts the principles governing municipalcorporations was applied, according to
Elliot for a municipal ordinance to be validthe following requisites should be complied: 1) must not
contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not bepartial or
discriminatory; 4) must not prohibit but may regulate trade; 5) must notbe unreasonable; and 6) must be
general and consistent with public policy.In the Gonong decision it was shown that the measures under
considerationdid not pass the first criterion because it did not conform to existing law. PD 1605does not
allow either the removal of license plates or the confiscation of driverslicenses for traffic violations
committed in Metropolitan Manila. There is nothing inthe decree authorizing the MMA to impose such
sanctions. Thus Local politicalsubdivisions are able to legislate only by virtue of a valid delegation of
legislativepower from the national legislature (except only that the power to create their ownsources of
revenue and to levy taxes is conferred by the Constitution itself). Theyare mere agents vested with what is
called the power of subordinate legislation. Asdelegates of the Congress, the local government unit
cannot contravene but mustobey at all times the will of the principal. In the case at bar the enactments
inquestion, which are merely local in origin, cannot prevail against the decree, which has the force and
effect of a statute.

People v. Rosenthal & Osmena

People of the Philippines, plaintiff-appellee v. Jacob Rosenthal & Nicasio Osmena, defendants-appellants
En Banc
Doctrine: Due process & equal protection
Keywords: void of vagueness, equal protection, undue delegation of legislative authority
Date: June 12, 1939
Ponente: Justice Laurel
Facts:
Jacob Rosenthal and Nicasio Osmea were founders and shareholders of the O.R.O. Oil Company. The
main objects and purposes of the company are to mine, refine, market, buy and sell petroleum, natural gas
and other oil products.
Rosenthal and Osmea were found guilty by the RTC in two cases of selling their shares to individuals
without first obtaining the corresponding written permit or license from the Insular Treasurer of the
Commonwealth of the Philippines.
This is in violation of Sections 2 & 5 of Act No. 2581, commonly known as the Blue Sky Law.
o Section 2 of said law provides that every person, partnership, association, or corporation attempting to
offer to sell in the Philippines speculative securities of any kind or character whatsoever, is under
obligation to file previously with the Insular Treasurer the various documents and papers enumerated
therein and to pay the required tax of twenty-pesos.
o Sec 5, on the other hand, provides that whatever the said Treasurer of the Philippine Islands is
satisfied, either with or without the examination herein provided, that any person, partnership, association
or corporation is entitled to the right to offer its securities as above defined and provided for sale in the
Philippine Islands, he shall issue to such person, partnership, association or corporation a certificate or
permit reciting that such person, partnership, association or corporation has complied with the provisions
of this act, and that such person, partnership, association or corporation, its brokers or agents are entitled
to order the securities named in said certificate or permit for sale; that said Treasurer shall furthermore
have authority, whenever in his judgment it is in the public interest, to cancel said certificate or permit,
and that an appeal from the decision of the Insular Treasurer may be had within the period of thirty days
to the Secretary of Finance.
The shares are said to be speculative because their value materially depended upon a promise of future
promotion and development of the oil business, rather than on actual tangible assets.
On appeal, Rosenthal & Osmena argued that Act 2581 is unconstitutional on three grounds:
o 1) That it constitutes undue delegation of legislative authority to the Insular treasurer
o 2) that it does not afford equal protection before the law
o 3) that it is vague and ambiguous
Issue: WON the law is unconstitutional in any of the three grounds
Held: The law is CONSTITUTIONAL on all grounds alleged by the appellants.
Ratio:

That it constitutes undue delegation of legislative authority to the Insular treasurer

The Act furnishes a sufficient standard for the Treasurer to follow in reaching a decision regarding the
issuance or cancellation of a certificate or permit. The certificate or permit to be issued under the Act
must recite that the person ,partnership, association or corporation applying therefor has complied with
the provisions of this Act, and this requirement, construed in relation to the other provisions of the law,
means that a certificate or permit shall be issued by the Insular Treasurer when the provisions of Act 2581
have been complied with. Upon the other hand, the authority of the Insular Treasurer to cancel a
certificate or permit is expressly conditioned upon a finding that such cancellation is in the public
interest. In view of the intention and purpose of Act 2581 to protect the public against speculative
schemes which have no more basis than so many feet of blue sky and against the sale of stock infly-bynight concerns, visionary oil wells, distant gold mines, and other like fraudulent exploitations, we hold
that public interest in this case is a sufficient standard to guide the Insular Treasurer in reaching a
decision on a matter pertaining to the issuance or cancellation of certificates or permits.
Act 2581 allows appeal from the decision of the Treasurer to the Sec of Finance. Hence, it cannot be
contended that the Treasurer can act and decide without any restraining influence.
The theory of the separation of powers is designed by its originators to secure action and at the same time
to forestall over action which necessarily results from undue concentration of powers, and thereby obtain
efficiency and prevent despotism. Thereby, the rule of law was established which narrows the range of
governmental action and makes it subject to control by certain legal devices. As a corollary, we find the
rule prohibiting delegation of legislative authority, and from the earliest time American legal authorities
have proceeded on the theory that legislative power must be exercised by the legislative alone. It is
frankness, however, to confess that as one delves into the mass of judicial pronouncements, he finds a
great deal of confusion.
the maxim delegatus non potest delegare or delegata potestas non potest delegare has beenmade to
adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits,
of the principle of subordinate legislation, in practically all modern governments. Difficulty lies in
fixing the limit and extent of the authority. While courts have undertaken to laydown general principles,
the safest is to decide each case according to its peculiar environment, having in mind the wholesome
legislative purpose intended to be achieved.
Hall v Geiger-Jones: it is well-settled principle of law in this state that by legislative act a commission or
board may be empowered to ascertain the existence of facts, upon the finding of which may depend the
right to continue in the practice of a profession or a regulated business.

that it does not afford equal protection before the law

o Another ground relied upon by appellants in contending that Act No. 2581 is unconstitutional is that it
denies equal protection of the laws because the law discriminates between an owner who sells his
securities in a single transaction and one who disposes of them in repeated and successive transactions.
o Hall vs. Geiger-Jones Co: "Prominent among such discriminations are . . . between an owner who
sells his securities in a single transaction and one who disposes of them in successive transactions; . . . " If
a class is deemed to present a conspicuous example of what the legislature seeks to prevent, the 14th
Amendment allows it to be dealt with although otherwise and merely logically not distinguishable from
others not embraced in the law

that it is vague and ambiguous

o People vs. Fernandez and Trinidad. An Act will be declared void and inoperative on the ground of
vagueness and uncertainty only upon a showing that the defect is such that the courts are unable to
determine, with any reasonable degree of certainty, what the legislature intended.
o In this connection we cannot pretermit reference to the rule that legislation should not be held invalid
on the ground of uncertainty if susceptible of any reasonable construction that will support and give it
effect. An Act will not be declared inoperative and ineffectual on the ground that it furnishes no adequate
means to secure the purpose for which it is passed, if men of common sense and reason can devise and
provide the means, and all the instrumentalities necessary for its execution are within the reach of those
intrusted therewith.
Judgement of lower court is affirmed, with modifications that the fines are reduced.
Rosenthal: from P500 -> P200 in each case
Osmena: from P1000 -> P500, from P2000 -> P1000
Subsidiary imprisonment for both in case of insolvency, and costs.

Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial BusOperators Association of
the Philippines (PBOAP)
G.R. No. 115381 December 23, 1994
Kapunan, J.
FACTS:

public utilities privately owned and operated businesses whose service are essential tothe general
public; enterprises which specially cater to the needs of the public andconducive to their comfort and
convenience

DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowingprovincial bus
operators to charge passengers rates within a range of 15% above and 15%below the LTFRB official rate
for a period of 1 year

PBOAP pursuant to Memo. Cir. it filed an application for fare rate increase. An across-the-board
increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a
minimum-maximum fare range of fifteen (15%) percent over andbelow the proposed basic per kilometer
fare rate, with the said minimum-maximum farerange applying only to ordinary, first class and premium
class buses and a fifty-centavo(P0.50) minimum per kilometer fare for aircon buses, was sought

respondent LTFRB rendered a decision granting the fare rate increase in accordance with aspecified
schedule of fares on a straight computation method

DOTC Sec. issued Department Order No. 92-587 defining the policy framework on theregulation of
transport services. It provides inter alia that Passenger fares shall also bederegulated, except for the
lowest class of passenger service (normally third classpassenger transport) for which the government will

fix indicative or reference fares.Operators of particular services may fix their own fares within a range
15% above andbelow the indicative or reference rate.

LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for theimplementation of
DOTC Department Order No. 92-587, which provides, among others,that:The issuance of a Certificate
of Public Convenience is determined by public need. Thepresumption of public need for a service shall be
deemed in favor of the applicant, whileburden of proving that there is no need for the proposed service
shall be the oppositors.The existing authorized fare range system of plus or minus 15 per cent for
provincialbuses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorizedfare to
be replaced by an indicative or reference rate as the basis for the expanded farerange

PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial busoperators to
collect plus 20% and minus 25% of the prescribed fare without first havingfiled a petition for the purpose
and without the benefit of a public hearing, announced afare increase of twenty (20%) percent of the
existing fares

KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.
ISSUE:
WON the above memoranda, circulars and/or orders of the DOTC and the LTFRBwhich, among others,
(a) authorize provincial bus and jeepney operators to increase ordecrease the prescribed transportation
fares without application therefor with the LTFRB andwithout hearing and approval thereof by said
agency is in violation of Sec. 16(c) of CA 146,and in derogation of LTFRBs duty to fix and determine
just and reasonable fares bydelegating that function to bus operators, and (b) establish a presumption of
public need infavor of applicants for certificates of public convenience and place on the oppositor
theburden of proving that there is no need for the proposed service, in patent violation not onlyof Sec.
16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating thatfares should be just
and reasonable
HELD:
Yes.

Section 16(c) of the Public Service Act, as amended, reads:Sec. 16. Proceedings of the Commission, upon
notice and hearing. The Commission shallhave power, upon proper notice and hearing in accordance
with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving
provisions to thecontrary:xxx xxx xxx(c) To fix and determine individual or joint rates, tolls, charges,
classifications, orschedules thereof, as well as commutation, mileage kilometrage, and other special
rateswhich shall be imposed, observed, and followed thereafter by any public service: Provided, That the
Commission may, in its discretion, approve rates proposed by public servicesprovisionally and without
necessity of any hearing; but it shall call a hearing thereon withinthirty days thereafter, upon publication
and notice to the concerns operating in theterritory affected: Provided, further, That in case the public
service equipment of anoperator is used principally or secondarily for the promotion of a private business,
the netprofits of said private business shall be considered in relation with the public service of such
operator for the purpose of fixing the rates.

LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve andperiodically review and
adjust, reasonable fares, rates and other related charges, relativeto the operation of public land
transportation services provided by motorized vehicles

LTFRB not authorized to delegate that power to a common carrier, a transport operator,or other public
service

authority given by the LTFRB to the provincial bus operators to set a fare range over andabove the
authorized existing fare, is illegal and invalid as it is tantamount to an unduedelegation of legislative
authority

rate should not be confiscatory as would place an operator in a situation where he willcontinue to operate
at a loss; rate should enable public utilities to generate revenuessufficient to cover operational costs and
provide reasonable return on the investments

CPC - authorization granted by the LTFRB for the operation of land transportation servicesfor public use
as required by law. Pursuant to Section 16(a) of the Public Service Act, asamended, the following
requirements must be met before a CPC may be granted, to wit: (i)the applicant must be a citizen of the
Philippines, or a corporation or co-partnership,association or joint-stock company constituted and
organized under the laws of thePhilippines, at least 60 per centum of its stock or paid-up capital must
belong entirely tocitizens of the Philippines; (ii) the applicant must be financially capable of undertaking
theproposed service and meeting the responsibilities incident to its operation; and (iii) theapplicant must
prove that the operation of the public service proposed and theauthorization to do business will promote
the public interest in a proper and suitablemanner; there must be proper notice and hearing before the PSC
can exercise its power toissue a CPC

LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent withSection 16(c)
(iii) of the Public Service Act which requires that before a CPC will be issued,the applicant must prove by
proper notice and hearing that the operation of the publicservice proposed will promote public interest in
a proper and suitable manner. On thecontrary, the policy guideline states that the presumption of public
need for a publicservice shall be deemed in favor of the applicant.

CASE DIGEST: COMPAIA GENERAL DE TABACOS DE FILIPINAS vs. ALHAMBRA CIGAR

AND CIGARETTE MANUFACTURING CO.
FACTS:
It is admitted that plaintiffs trade name as evidenced by the certificate issued under the Spanish
regime, consists solely of the words La Flor de la Isabela. Plaintiff does not claim that the word

Isabela has been registered by it as a trade name or that it has a title from any source conferring on it
the exclusive right to use that word.
Defendant began the manufacture of cigarettes, offering them to the public in packages on the
front side of each of which appeared the words Alhambra Isabelas.
Action is brought to enjoin the defendant from using the word Isabelas.
The exclusive right to use this name, plaintiff claim arises from two causes: First, the contraction
of the phrase La Flor de la Isabela into the word Isabela by popular expression and use; and second,
the use for more than twenty years of the word Isabela.
Judgment was for plaintiff and defendant appealed.
ISSUE:
Whether defendants use of the word Alhambra Isabela is an infringement to the use of trade
name.
HELD:
The statute prohibits the registration of a trade name when the trade name represents the
geographical place of production or origin of the products or goods to which the trade name refers, or
when it is merely the name, quality or description of the merchandise with respect to which the trade
name is to be used. In such cases, therefore, no trade name can exist.
The two claims of the plaintiff are identical; for, there could have been no contraction brought
about by popular expression except after long lapse of time. The contraction of the phrase in to the word
would create no rights, there being no registration, unless it resulted from long use.
The opinion of the plaintiff must fail. It shows that in not a single instance in the history of the
plaintiff corporation, so far as is disclosed by the record, has a package of its cigarettes gone into the
market, either at wholesale or retail with the word Isabela alone on the package as a separate or distinct
word or name.
Even admitting that the word Isabela may have been appropriable by plaintiff as a trade name at
the time it began to use it, the evidence showing that it had been exclusively appropriated by the plaintiff
would have to be very strong to establish the fact of appropriation and the right to exclusive use. The law
as it stands and has stood since the Royal Decree of 1888 prohibits the use of a geographical name as a
trade name.
The judgment appealed from is reversed.