KMU

vs.

Garcia,

239

SCRA

386

FACTS:
On June 26, 1990; then Secretary of DOTC issued Memorandum Circular No. 90-395 to
then LTFRB Chairman allowing provincial bus operators to charge passengers rates
within a range of 15% above and 15% below the LTFRB official rate for a period of one
(1) year. Private respondent Provincial Bus Operators Association of the Philippines,
Inc. (PBOAP) filed an application for fare rate increase. Subsequently, private
respondent PBOAP reduced its applied proposed fare. LTFRB rendered a decision
granting the fare rate increase. Private respondent PBOAP, availing itself of the
deregulation policy of the DOTC allowing provincial bus operators to collect plus 20%
and minus 25% of the prescribed fare without first having filed a petition for the purpose
and without the benefit of a public hearing, announced a fare increase of 20% of the
existing fares. Hence, petitioner KMU filed a petition before the LTFRB opposing the
upward adjustment of bus fares which was dismissed for lack of merit. Petitioner KMU
anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to
provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later
increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above
the existing authorized fare without having to file a petition for the purpose, is
unconstitutional, invalid and illegal. Second, the establishment of a presumption of
public need in favor of an applicant for a proposed transport service without having to
prove public necessity, is illegal for being violative of the Public Service Act and the
Rules of Court.
ISSUE:
Whether or not the memoranda, circulars and/or orders of the DOTC and the LTFRB
are valid.
HELD:
On the fare range scheme.
The Legislature delegated to the defunct Public Service Commission the power of fixing
the rates of public services. Respondent LTFRB is likewise vested with the same. With
this authority, an administrative body and in this case, the LTFRB, may implement broad
policies laid down in a statute by "filling in" the details which the Legislature may neither
have time or competence to provide. However, nowhere under the aforesaid provisions
of law are the regulatory bodies, the PSC and LTFRB alike, authorized to delegate that
power to a common carrier, a transport operator, or other public service. In the case at
bench, the authority given by the LTFRB to the provincial bus operators to set a fare

range over and above the authorized existing fare, is illegal and invalid as it is
tantamount to an undue delegation of legislative authority. Potestas delegata non
delegari potest. What has been delegated cannot be delegated.
On the presumption of public need.
Pursuant to Section 16(a) of the Public Service Act, as amended, 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 jointstock company constituted and organized under the laws of the Philippines, at least
60 per centum of its stock or paid-up capital must belong entirely to citizens of the
Philippines; (ii) the applicant must be financially capable of undertaking the proposed
service and meeting the responsibilities incident to its operation; and (iii) the applicant
must prove that the operation of the public service proposed and the authorization to do
business will promote the public interest in a proper and suitable manner. It is
understood that there must be proper notice and hearing before the PSC can exercise
its power to issue a CPC.
While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB
Memorandum Circular No. 92-009, Part IV, provides for yet incongruous and
contradictory policy guideline on the issuance of a CPC. The guidelines states:
The issuance of a Certificate of Public Convenience is determined by public need. The
presumption of public need for a service shall be deemed in favor of the applicant, while
the burden of proving that there is no need for the proposed service shall be the
oppositor's.
The above-quoted provision is entirely incompatible and inconsistent with Section 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 public
service proposed will promote public interest in a proper and suitable manner. On the
contrary, the policy guideline states that the presumption of public need for a public
service shall be deemed in favor of the applicant. In case of conflict between a statute
and an administrative order, the former must prevail.
While we recognize the authority of the DOTC and the LTFRB to issue administrative
orders to regulate the transport sector, we find that they committed grave abuse of
discretion in issuing DOTC Department OrderNo. 92-587 defining the policy framework
on the regulation of transport services and LTFRB Memorandum Circular No. 92-009
promulgating the implementing guidelines on DOTC Department Order No. 92-587, the
said administrative issuances being amendatory and violative of the Public Service Act
and the Rules of Court. Consequently, we rule that the twenty (20%) per centum fare
increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a

petition and a public hearing is null and void and of no force and effect. No grave abuse
of discretion however was committed in the issuance of DOTC Memorandum Order No.
90-395 and DOTC Memorandum dated October 8, 1992, the same being merely
internal communications between administrative officers.

DAR vs Delia Sutton

FACTS:
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has
been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to
the then existing agrarian reform program of the government, respondents made a
voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain
incentives under the law. On June 10, 1988, CARL took effect.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request
to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and
thus exempted from the coverage of the CARL.
MARO inspected respondents land and found that it was devoted solely to cattle-raising
and breeding. He recommended to the DAR Secretary that it be exempted from the
coverage of the CARL. DAR ignored their request
DAR issued A.O. No. 9, series of 1993, which provided that only portions of private
agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988
shall be excluded from the coverage of the CARL. In determining the area of land to be
excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio.
DAR Secretary Garilao issued an Order partially granting the application of respondents
for exemption from the coverage of CARL. Respondents moved for reconsideration.
They contend that their entire landholding should be exempted as it is devoted
exclusively to cattle-raising. Their motion was denied. Office of the President affirmed
the order of DAR
On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O.
No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional
Commission to exclude livestock farms from the land reform program of the
government.
ISSUE:
Whether or not DAR A.O. No. 9, series of 1993, which prescribes a maximum retention
limit for owners of lands devoted to livestock raising is constitutional.

HELD:
Assailed AO is unconstitutional. In the case at bar, we find that the impugned A.O. is
invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms
by including them in the coverage of agrarian reform and prescribing a maximum
retention limit for their ownership. However, the deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to
livestock, swine and poultry- raising.

United BFHA vs. BF Homes

Facts: United BF Homeowners Association, Inc. (UBFHAI) is the sole representative of
all homeowners of BF Homes while BF Homes, Inc (BFHI) is the ownerdeveloper of the subdivision.Due to financial difficulties, BFHI was placed under
receivership by SEC for 10 years under Atty. Orendain for 10 years. Atty. Florencio B.
Orendain took over management of respondent BFHI. Preliminary to the rehabilitation,
Atty. Orendain entered into anagreement with the two major homeowners' associations,
the BF Paraaque Homeowners Association, Inc. (BFPHAI) and the Confederation of
BF Homeowners Association, Inc. (CBFHAI), for the creation of a single, representative
homeowners' association and the setting up of an integrated security program that
would cover the eight (8) entry and exit points to and from the subdivision.
Subsequently, this tripartite agreement was reduced into a memorandum of agreement,
and was amended. Pursuant to these agreements, petitioner UBFHAI was created and
registered with the Home Insurance and Guaranty Corporation (HIGC), and recognized
as the sole representative of all the homeowners' association inside the subdivision.
Respondent BFHI, through its receiver, turned over to petitioner UBFHAI the
administration and operation of the subdivision's clubhouse and a strip of open space
respectively. The first receiver was relieved and a new committee of receivers,
composed of respondent BFHI's board of directors was appointed. Based on BFHI's
title to the main roads, the newly appointed committee of receivers sent a letter to the
different homeowners' association in the subdivision informing them that as a basic
requirement for BFHI's rehabilitation, respondent BFHI would be responsible for the
security of the subdivision in order to centralize it and abate the continuing proliferation
of squatters. On the same day, petitioner UBFHAI filed with the HIGC a petition for
mandamus with preliminary injunction against respondent BFHI alleging that the
committee of receivers illegally revoked their security agreement with the previous
receiver. The HIGC issued ex parte a TRO which enjoined respondent BFHI from taking
over the clubhouse, securing all entry and exit points, impeding or preventing the
execution and sale of properties and otherwise repudiating or invalidating any contract
or agreement or petitioner with the BFHI. Without filing an answer to petitioner

UBFHAI's petition with the HIGC, respondent BFHI filed with the Court of Appeals a
petition for prohibition for the issuance of preliminary injunction and temporary
restraining order, to enjoin HIGC from proceeding with the case. The HIGC issued an
order deferring the resolution of petitioner UBFHAI's application for preliminary
injunction, until such time that respondent BFHI's application for prohibition with the
appellate court has been resolved. When the twenty-day (20) effectivity of the
temporary restraining order had lapsed, the HIGC ordered the parties to maintain the
status quo. Meanwhile, the Court of Appeals granted respondent BFHI's petition for
prohibition. Motion for reconsideration by the petitioners was denied. Hence this
petition.

Issue: Whether or not HIGC has jurisdiction and authority to hear the case as provided
for in Sec. 1(b) rule II of HIGCs rules of procedure.

Held: HIGC has no jurisdiction to hear the case. Originally, administrative supervision
was vested by law with the SEC but pursuant to PD902-A, this function was delegated
to the HIGC. As stated in PD92A, HIGC was given the original and exclusive jurisdiction to hear and decide
homeowners disputes arising out of the following intra-corporate relations:
1. Between and among members of the association;
2.Between any and/or all of them and the association of which they are member; and
3.In so far as it concerns its right to exist as a corporate entity, between the association
and the state.
When HIGC adopted its revised rules of procedure in the hearing of homeowners
disputes, it added the phrase between the association and thestate/general public or
other entity.
The HIGC went beyond the authority provided by the law when it promulgated the
revised rules of procedure. There was a clear attempt to unduly expand the provisions
of Presidential Decree 902-A.The inclusion of the phrase GENERAL PUBLIC OR
OTHER ENTITY - is a matter which HIGC cannot legally do . 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 Congress or the Constitution or to enlarge its power
beyond the scope intended. The rule-making power must be confined to details for
regulating the mode or proceedings to carry into effect the law as it has been enacted,

and it cannot be extended to amend or expand the statutory requirements or to

embrace matters not covered by the statute."
If a discrepancy occurs between the basic law and an implementing rule or regulation, it
is the former that prevails. Moreover, where the legislature has delegated to an
executive or administrative officers and boards authority to promulgate rules to carry out
an express legislative purpose, the rules of administrative officers and boards, which
have the effect of extending, or which conflict with the authority-granting statute, do not
represent a valid exercise of the rule-making power but constitute an attempt by an
administrative body to legislate. "A statutory grant of powers should not be extended by
implication beyond what may be necessary for their just and reasonable execution.

Lupangco vs. CA
Facts: Professional Regulation Commission (PRC) issued Resolution No. 105 as parts
of its "Additional Instructions to Examiness," to all those applying for admission to take
the licensure examinations in accountancy. The resolution embodied the following
pertinent provisions:
No examinee shall attend any review class, briefing, conference or the like conducted
by, or shall receive any hand-out, review material, or any tip from any school, college or
university, or any review center or the like or any reviewer, lecturer, instructor official or
employee of any of the aforementioned or similars institutions during the three days
immediately proceeding every examination day including examination day.
Any examinee violating this instruction shall be subject to the sanctions prescribed by
Sec. 8, Art. III of the Rules and Regulations of the Commission.
Petitioners, all reviewees preparing to take the licensure examinations in accountancy
schedule on filed a complaint for injuction with a prayer with the issuance of a writ of a
preliminary injunction against respondent PRC to restrain the latter from enforcing the
above-mentioned resolution and to declare the same unconstitutional.

Respondent PRC filed a motion to dismiss on the ground that the lower court had no
jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of
October 21, 1987, the lower court declared that it had jurisdiction to try the case and
enjoined the respondent commission from enforcing and giving effect to Resolution No.
105 which it found to be unconstitutional.

PRC filed with the Court of Appeals a petition for the nullification of the above Order of
the lower court. Said petiton was granted in the Decision of the Court of Appeals.
Issues:
1.Whether or not the RTC has jurisdiction over the case.
2. Whether or not the Resolution is unconstitutional.
Held: 1. Yes. There is no provision in Presidential Decree No. 223, creating the
Professional Regulation Commission, that orders or resolutions of the Commission are
appealable either to the Court of Appeals or to the Supreme Court. Consequently, Civil
Case which was filed in order to enjoin the enforcement of a resolution of the
respondent Professional Regulation Commission alleged to be unconstitutional, should
fall within the general jurisdiction of the Court of First Instance, now the Regional Trial
Court.
What is clear from Presidential Decree No. 223 is that the Professional Regulation
Commission is attached to the Office of the President for general direction and
coordination. 8 Well settled in our jurisprudence is the view that even acts of the Office
of the President may be reviewed by the Court of First Instance (now the Regional Trial
Court).
2. It is an axiom in administrative law that administrative authorities should not act
arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such
rules and regulations must be reasonable and fairly adapted to the end in view. If shown
to bear no reasonable relation to the purposes for which they are authorized to be
issued, then they must be held to be invalid.
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the
examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no
authority to dictate on the reviewees as to how they should prepare themselves for the
licensure examinations. They cannot be restrained from taking all the lawful steps
needed to assure the fulfillment of their ambition to become public accountants. They
have every right to make use of their faculties in attaining success in their endeavors.
They should be allowed to enjoy their freedom to acquire useful knowledge that will
promote their personal growth. As defined in a decision of the United States Supreme
Court:
The term "liberty" means more than mere freedom from physical restraint or the bounds
of a prison. It means freedom to go where one may choose and to act in such a manner
not inconsistent with the equal rights of others, as his judgment may dictate for the

promotion of his happiness, to pursue such callings and vocations as may be most
suitable to develop his capacities, and giv to them their highest enjoyment.

Another evident objection to Resolution No. 105 is that it violates the academic freedom
of the schools concerned. Respondent PRC cannot interfere with the conduct of review
that review schools and centers believe would best enable their enrollees to meet the
standards required before becoming a full-fledged public accountant. Unless the means
or methods of instruction are clearly found to be inefficient, impractical, or riddled with
corruption, review schools and centers may not be stopped from helping out their
students.
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the
alleged leakages in the licensure examinations will be eradicated or at least minimized.
Making the examinees suffer by depriving them of legitimate means of review or
preparation on those last three precious days-when they should be refreshing
themselves with all that they have learned in the review classes and preparing their
mental and psychological make-up for the examination day itself-would be like uprooting
the tree to get rid of a rotten branch. What is needed to be done by the respondent is to
find out the source of such leakages and stop it right there. If corrupt officials or
personnel should be terminated from their loss, then so be it. Fixers or swindlers should
be flushed out. Strict guidelines to be observed by examiners should be set up and if
violations are committed, then licenses should be suspended or revoked. These are all
within the powers of the respondent commission as provided for in Presidential Decree
No. 223. But by all means the right and freedom of the examinees to avail of all
legitimate means to prepare for the examinations should not be curtailed.

5. Philippine Association of Service Exporters, Inc. v. Torres

G.R. No. 101279 August 6, 1992

FACTS:
Philippine Association of Service Exporters Inc. (PASIE) is the largest national
organization of private employment and recruitment agencies duly licensed and
authorized by the POEA, to engage in the business of obtaining overseas employment
for Filipino land-based workers, including domestic helpers.

As a result of published stories regarding the abuses suffered by Filipino housemaids

employed in Hong Kong, then DOLE Secretary Ruben Torres issued Department Order
No.16, Series of 1991, temporarily suspending the recruitment by private employment
agencies of Filipino domestic helpers going to Hong Kong. The DOLE itself, through the
POEA took over the business of deploying such Hong Kong-bound workers. The POEA
Administrator also issued Memorandum Circular No. 37, Series of 1991, on the
processing of employment contracts of domestic workers for Hong Kong. PASEI filed a
petition for prohibition to annul the aforementioned DOLE and POEA circulars and to
prohibit their implementation on the grounds that DOLE and POEA acted with grave
abuse of discretion and/or in excess of their rule-making authority in issuing said
circulars; that the assailed DOLE and POEA circulars are contrary to the Constitution,
are unreasonable, unfair and oppressive; and that the requirements of publication and
filing with the Office of the National Administrative Register were not complied with.
ISSUE: Whether or not petition has merit.
HELD:
The second and first grounds are unmeritorious. Article 36 of the Labor Code grants the
Labor Secretary the power to restrict and regulate recruitment and placement activities.
It reads: The Secretary of Labor shall have the power to restrict and regulate the
recruitment and placement activities of all agencies within the coverage of this
title[Regulation of Recruitment and Placement Activities] and is hereby authorized to
issue orders and promulgate rules and regulations to carry out the objectives and
implement the provisions of this title. On the other hand, the scope of the regulatory
authority of the POEA, which was created by Executive Order No. 797 to take over the
functions of the Overseas Employment Development Board, the National Seamen
Board, and the overseas employment functions of the Bureau of Employment Services,
is broad and far-ranging for among the functions inherited by the POEA from the defunct
Bureau of Employment Services was the power and duty to establish and maintain a
registration and/or licensing system to regulate private sector participation in the
recruitment and placement of workers, locally and overseas; it assumed from the
defunct Overseas Employment Development Board the power and duty to recruit and
place workers for overseas employment of Filipino contract workers on a government to
government arrangement and in such other sectors as policy may dictate; and from the
National Seamen Board, the POEA took over to regulate and supervise the activities of
agents or representatives of shipping companies in the hiring of seamen for overseas
employment; and secure the best possible terms of employment for contract seamen
workers and secure compliance there with. Said administrative issuances merely
restricted the scope or area of PASEIs business operations by excluding therefrom
recruitment and deployment of domestic helpers for Hong Kong till after the
establishment of the mechanisms that will enhance the protection of Filipino domestic

helpers going to Hong Kong. In fine, other than the recruitment and deployment of
Filipino domestic helpers for Hong Kong, PASEI may still deploy other class of Filipino
workers either for Hong Kong and other countries and all other classes of Filipino
workers for other countries. Said administrative issuances, are intended to curtail, if not
to end, rampant violations of the rule against excessive collections of placement and
documentation fees, travel fees and other charges committed by private employment
agencies recruiting and deploying domestic helpers to Hong Kong. They are
reasonable, valid and justified under the general welfare clause of the Constitution,
since the recruitment and deployment business, as it is conducted today, is affected with
public interest.
Nevertheless, they are legally invalid, defective and unenforceable for lack of power
publication and filing in the Office of the National Administrative Register. As announced
in
Taada vs. Tuvera,All statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature. Covered by this
rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative powers whenever the same are validly delegated by the
legislature or, at present, directly conferred by the Constitution: Administrative rules and
regulations must also be published if their purpose is to enforce or implement existing
law pursuant to a valid delegation. Interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the administrative agency and the public,
need not be published. Neither is publication required of the so-called letter of
instructions issued by the administrative superiors concerning the rules or guidelines to
be followed by their subordinates in the performance of their duties.
Sol Gen v MMA
Facts: In Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M.
Gonong, the Court held that the confiscation of the license plates of motor vehicles for
traffic violations was not among the sanctions that could be imposed by the Metro
Manila Commission under PD 1605 and was permitted only under the conditions laid
dowm by LOI 43 in the case of stalled vehicles obstructing the public streets. It was
there also observed that even the confiscation of driver's licenses for traffic violations
was not directly prescribed by the decree nor was it allowed by the decree to be
imposed by the Commission. However, petitioners alleged that Traffic Enforces
continued with the confiscation of drivers licenses and removal of license plates. Dir
General Cesar P. Nazareno of the PNP assured the Court that his office had never
authorized the removal of the license plates of illegally parked vehicles.

Later, the Metropolitan Manila Authority issued Ordinance No. 11, authorizing itself "to
detach the license plate/tow and impound attended/ unattended/ abandoned motor
vehicles illegally parked or obstructing the flow of traffic in Metro Manila." The Court
issued a resolution requiring the Metropolitan Manila Authority and the SolGen to submit
separate comments in light of the contradiction between the Ordinance and the SC
ruling. The MMA defended the ordinance on the ground that it was adopted pursuant to
the power conferred upon it by EO 32 (formulation of policies, promulgation of
resolutions). The Sol Gen expressed the view that the ordinance was null and void
because it represented an invalid exercise of a delegated legislative power. The flaw in
the measure was that it violated existing law, specifically PD 1605, which does not
permit, and so impliedly prohibits, the removal of license plates and the confiscation of
driver's licenses for traffic violations in Metropolitan Manila. He made no mention,
however, of the alleged impropriety of examining the said ordinance in the absence of a
formal challenge to its validity.
Issue: WON Ordinance 11 is justified on the basis of the General Welfare Clause
embodied in the LGC
Held: No. Ratio: The Court holds that there is a valid delegation of legislative power to
promulgate such measures, it appearing that the requisites of such delegation are
present. These requisites are. 1) the completeness of the statute making the delegation;
and 2) the presence of a sufficient standard.
The measures in question are enactments of local governments acting only as agents of
the national legislature. Necessarily, the acts of these agents must reflect and conform
to the will of their principal. To test the validity of such acts in the specific case now
before us, we apply the particular requisites of a valid ordinance as laid down by the
accepted principles governing municipal corporations. According to Elliot, a municipal
ordinance, to be valid: 1) must not contravene the Constitution or any statute; 2) must
not be unfair or oppressive; 3) must not be partial ordiscriminatory; 4) must not prohibit
but may regulate trade; 5) must not be unreasonable; and 6) must be general
and consistent with public policy.
A careful study of the Gonong decision will show that the measures under consideration
do not pass the first criterion because they do not conform to existing law. The
pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or
the confiscation of driver's licenses for traffic violations committed in Metropolitan
Manila. There is nothing in the following provisions of the decree authorizing the
Metropolitan Manila Commission to impose such sanctions. In fact, the provisions
prohibit the imposition of such sanctions in Metropolitan Manila. The Commission
was allowed to "impose fines and otherwise discipline" traffic violators only "in such
amounts and under such penalties as are herein prescribed," that is, by the decree

itself. Nowhere is the removal of license plates directly imposed by thedecree or at least
allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly
provides that "in case of traffic violations, the driver's license shall not be confiscated."
These restrictions are applicable to the Metropolitan Manila Authority and all other local
political subdivisions comprising Metropolitan Manila, including the Municipality of
Mandaluyong. `The requirement that the municipal enactment must not violate existing
law explains itself. Local political subdivisions are able to legislate only by virtue of a
valid delegation of legislative power from the national legislature. They are mere agents
vested with what is called the power ofsubordinate legislation. As delegates of the
Congress, the local government unit cannot contravene but must obey at all times the
will of their principal. In the case before us, the enactments in question, which are
merely local in origin, cannot prevail against the decree, which has the force and effect
of a statute. To sustain the ordinance would be to open the floodgates to other
ordinances amending and so violating national laws inthe guise of implementing them.
Thus, ordinances could be passed imposing additional requirements for the issuance
of marriage licenses, to prevent bigamy; the registration of vehicles, to minimize
carnapping; the execution of contracts, to forestall fraud; the validation of parts, to deter
imposture; the exercise of freedom of speech, to reduce disorder; and so on. The list is
endless, but the means, even if the end be valid, would be ultra vires. The measures in
question do not merely add to the requirement of PD 1605 but, worse, impose sanctions
the decree does not allow and in fact actually prohibits. In so doing, the ordinances
disregard and violate and in effect partially repeal the law. We here emphasize the ruling
in the Gonong case that PD 1605 applies only to the Metropolitan Manila area. It is
an exception to the general authority conferred by R.A. No. 413 on the Commissioner of
Land Transportation to punishviolations of traffic rules elsewhere in the country with
the sanction therein prescribed, including those here questioned. The Court agrees that
the challenged ordinances were enacted with the best of motives and shares the
concern of the rest of the public for the effective reduction of traffic problems in
Metropolitan Manila through the imposition and enforcement of more deterrent penalties
upon traffic violators. At the same time, it must also reiterate the public misgivings over
the abuses that may attend the enforcement of such sanction in eluding the illicit
practices described in detail in the Gonong decision. At any rate, the fact is that there is
no statutory authority for and indeed there is a statutory prohibition against the
imposition of such penalties in the Metropolitan Manila area. Hence, regardless of their
merits, they cannot be impose by the challenged enactments by virtue only of the
delegated legislative powers. It is for Congress to determine, in the exercise of its
own discretion, whether or not to impose such sanctions, either directly through a
statute or by simply delegating authority to this effect to the local governments in
Metropolitan Manila. Without such action, PD 1605 remains effective and continues
prohibit the confiscation of license plates of motor vehicles (except under the conditions

prescribed in LOI 43) and of driver licenses as well for traffic violations in Metropolitan
Manila.

8. Boie-Takeda Chemicals, Inc. vs. de la Serna228 SCRA 329, Dec. 10, 1993
Facts:
P.D. No. 851 provides for the Thirteen-Month Pay Law. Under Sec. 1 of said law,
allemployers are required to pay all their employees receiving basic salary of not more
than P1,000.00 a month, regardless of the nature of the employment, and such should
be paid onDecember 24 of every year. The Rules and Regulations Implementing P.D.
851 containedprovisions defining 13-month pay and basic salary and the employers
exempted fromgiving it and to whom it is made applicable. Supplementary Rules and
RegulationsImplementing P.D. 851 were subsequently issued by Minister Ople which
inter alia set items of compensation not included in the computation of 13-month pay.
(overtime pay, earnings andother remunerations which are not part of basic salary shall
not be included in thecomputation of 13-month pay). Pres. Corazon Aquino promulgated
on August 13, 1985 M.O.No. 28, containing a single provision that modifies P.D. 851 by
removing the salary ceiling of P1,000.00 a month. More than a year later, Revised
Guidelines on the Implementation of the13-month pay law was promulgated by the then
Labor Secretary Franklin Drilon, among otherthings, defined particularly what
remunerative items were and were not included in theconcept of 13-month pay, and
specifically dealt with employees who are paid a fixed orguaranteed wage plus
commission or commissions were included in the computation of 13thmonth pay)A
routine inspection was conducted in the premises of petitioner. Finding thatpetitioner
had not been including the commissions earned by its medical representatives inthe
computation of their 1-month pay, a Notice of Inspection Result was served on
petitionerto effect restitution or correction of the underpayment of 13-month pay for the
years, 1986 to1988 of Medical representatives. Petitioner wrote the Labor Department
contesting the Noticeof Inspection Results, and expressing the view that the
commission paid to its medicalrepresentatives are not to be included in the computation
of the 13-moth pay since the lawand its implementing rules speak of REGULAR or
BASIC salary and therefore exclude allremunerations which are not part of the
REGULAR salary. Regional Dir. Luna Piezas issued anorder for the payment of
underpaid 13-month pay for the years 1986, 1987 and 1988. Amotion for
reconsideration was filed and the then Acting labor Secretary Dionisio de la
Sernaaffirmed the order with modification that the sales commission earned of
medicalrepresentatives before August 13, 1989 (effectivity date of MO 28 and its
implementingguidelines) shall be excluded in the computation of the 13-month
pay.Similar routine inspection was conducted in the premises of Phil. Fuji Xerox where

itwas found there was underpayment of 13th month pay since commissions were not
included.In their almost identically-worded petitioner, petitioners, through common
counsel, attributegrave abuse of discretion to respondent labor officialsHon. Dionisio
dela Serna and Undersecretary Cresenciano B. Trajano.
ISSUE:
Whether or not commissions are included in the computation of 13-month pay
HELD:
NO. Contrary to respondents contention, M.O No. 28 did not repeal, supersede
orabrogate P.D. 851. As may be gleaned from the language of MO No. 28, it merely
modifiedSection 1 of the decree by removing the P 1,000.00 salary ceiling. The
concept of 13th Monthpay as envisioned, defined and implemented under P.D. 851
remained unaltered, and whileentitlement to said benefit was no longer limited to
employees receiving a monthly basicsalary of not more than P 1,000.00 said benefit
was, and still is, to be computed on the basicsalary of the employee-recipient as
provided under P.D. 851. Thus, the interpretation given tothe term basic salary was
defined in PD 851 applies equally to basic salary under M.O. No.28. The term basic
salary is to be understood in its common, generally accepted meaning,i.e., as a rate of
pay for a standard work period exclusive of such additional payments asbonuses and
overtime. In remunerative schemes consists of a fixed or guaranteed wage
pluscommission, the fixed or guaranteed wage is patently the basic salary for this is
what theemployee receives for a standard work period. Commissions are given for extra
effortsexerted in consummating sales of other related transactions. They are, as such,
additionalpay, which the SC has made clear do not from part of the basic
salary.Moreover, the Supreme Court said that, including commissions in the
computation of the 13thmonth pay, the second paragraph of Section 5(a) of the Revised
Guidelines on the
Implementation of the 13th Month Pay Law unduly expanded the concept of "basic
salary" asdefined in P.D. 851. It is a fundamental rule that implementing rules cannot
add to or detractfrom the provisions of the law it is designed to implement.
Administrative regulations adoptedunder legislative authority by a particular department
must be in harmony with the provisionsof the law they are intended to carry into effect.
They cannot widen its scope. Anadministrative agency cannot amend an act of
Congress.

Ynot v IAC (1987) 148 SCRA 659

J. Cruz

Facts:
Petitioner transported 6 caracbaos from Masbate to Iloilo in 1984 and these wer
confiscated by the station commander in Barotac, Iloilo for violating E.O. 626 A which
prohibits transportation of a carabao or carabeef from one province to another.
Confiscation will be a result of this.
The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ
of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the
merits of the case, the court sustained the confiscation of the carabaos and, since they
could no longer be produced, ordered the confiscation of the bond. The court also
declined to rule on the constitutionality of the executive order, as raise by the petitioner,
for lack of authority and also for its presumed validity.
The same result was decided in the trial court.
In the Supreme Court, he then petitioned against the constitutionality of the E.O. due to
the outright confiscation without giving the owner the right to heard before an impartial
court as guaranteed by due process. He also challenged the improper exercise of
legislative power by the former president under Amendment 6 of the 1973 constitution
wherein Marcos was given emergency powers to issue letters of instruction that had the
force of law.

Issue: Is the E.O. constitutional?

Holding: The EO is unconstitutional. Petition granted.

Ratio:
The lower courts are not prevented from examining the constitutionality of a law.
Constitutional grant to the supreme court to review.

Justice Laurel's said, courts should not follow the path of least resistance by simply
presuming the constitutionality of a law when it is questioned. On the contrary, they
should probe the issue more deeply, to relieve the abscess, and so heal the wound or
excise the affliction.
The challenged measure is denominated an executive order but it is really presidential
decree, promulgating a new rule instead of merely implementing an existing law due to
the grant of legislative authority over the president under Amendment number 6.
Provisions of the constitution should be cast in precise language to avoid controvery. In
the due process clause, however, the wording was ambiguous so it would remain
resilient. This was due to the avoidance of an iron rule laying down a stiff command for
all circumstances. There was flexibility to allow it to adapt to every situation with varying
degrees at protection for the changing conditions.
Courts have also refrained to adopt a standard definition for due processlest they
be confined to its interpretation like a straitjacket.
There must be requirements of notice and hearing as a safeguard against arbitrariness.
There are exceptions such as conclusive presumption which bars omission of contrary
evidence as long as such presumption is based on human experience or rational
connection between facts proved and fact presumed. An examples is a passport of a
person with a criminal offense cancelled without hearing.
The protection of the general welfare is the particular function of police power which
both restrains and is restrained by dureprocess. This power was invoked in 626-A, in
addition to 626 which prohibits slaughter of carabos with an exception.
While 626-A has the same lawful subjectas the original executive order, it cant be said
that it complies with the existence of a lawful method. The transport prohibition and the
purpose sought has a gap.
Summary action may be taken in valid admin proceedings as procedural due process is
not juridical only due to the urgency needed to correct it.
There was no reason why the offense in the E.O. would not have been proved in a court
of justice with the accused acquired the rights in the constitution.
The challenged measure was an invalid exercise of police power because the method
toconfiscate carabos was oppressive.
Due process was violated because the owener was denied the right to be heard or his
defense and punished immediately.

This was a clear encroachment on judicial functions and against the separataion of
powers.
The policeman wasnt liable for damages since the law during that time was valid.