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Facts Issue Held Doctrine

Osmena v President Marcos issued PD 1956 creating a Special W/N there is NO. The provision conferring the authority upon the ERB to For a valid delegation of
Orbos Account in the General Fund, designated as the OIL an undue impose additional amounts on petroleum products provides a power, it is essential that
PRICE STABILIZATION FUND (OPSF), designed to delegation of sufficient standard by which the authority must be exercised. the law delegating the
Petitioner: reimburse oil companies for cost increases in crude oil legislative In addition to the general policy of the law to protect the local power must be
John and imported petroleum products resulting from power to the consumer by stabilizing and subsidizing domestic pump (1) complete in itself, that is
Osmena exchange rate adjustments and from increases in the ERB rates, 8(c) of P.D. 1956 expressly authorizes the ERB to it must set forth the policy
world market prices of crude oil. Later, OPSF was impose additional amounts to augment the resources of the to be executed by the
Respondent: classified into a TRUST LIABILITY ACCOUNT in Fund. delegate and
Oscar Orbos, virtue of EO 1024 and ordered released from the (2) it must fix a standard
Executive National Treasury to the Ministry of Energy. The same What petitioner would wish is the fixing of some definite, limits of which are
Secretary EO authorized the investment of the fund in government quantitative restriction, or "a specific limit on how much to sufficiently determinate or
securities, with the earnings accruing to the fund. tax." What is here involved is not so much the power of determinable to which
taxation as police power. Although the provision the delegate must conform.
Later, President Cory Aquino amended PD 1956 and authorizing the ERB to impose additional amounts could
promulgated EO 137, expanding the grounds for be construed to refer to the power of taxation, it cannot "Where the standards set
reimbursement to oil companies for possible cost be overlooked that the overriding consideration is to up for the guidance of an
underrecovery incurred a result of the reduction of enable the delegate to act with expediency in carrying administrative officer and
domestic prices of petroleum products, the amount of out the objectives of the law which are embraced by the the action taken are in
underrrecovery left to the determination of the Ministry police power of the State. fact recorded in the
of Finance orders of such officer, so
The interplay and constant fluctuation of the various factors that Congress, the courts
The OPSF is a "Trust Account" which was established involved in the determination of the price of oil and petroleum and the public are
"for the purpose of minimizing the frequent price products, and the frequently shifting need to either augment assured that the orders in
changes brought about by exchange rate adjustment or exhaust the Fund, do not conveniently permit the setting of the judgment of such
and/or changes in world market prices of crude oil and fixed or rigid parameters in the law as proposed by the officer conform to the
imported petroleum products." Under P.D. No. 1956, as petitioner. To do so would render the ERB unable to respond legislative standard, there
amended by Executive Order No. 137 dated 27 effectively so as to mitigate or avoid the undesirable is no failure in the
February 1987, this Trust Account may be funded from consequences of such fluidity. As such, the standard as it is performance of the
any of the following sources: expressed, suffices to guide the delegate in the exercise of legislative functions."
a) Any increase in the tax collection from ad valorem the delegated power, taking account of the circumstances
tax or customs duty imposed on petroleum products under which it is to be exercised.
subject to tax under this Decree arising from exchange
rate adjustment, as may be determined by the Minister For a valid delegation of power, it is essential that the law
of Finance in consultation with the Board of Energy; delegating the power must be
b) Any increase in the tax collection as a result of (1) complete in itself, that is it must set forth the policy to be
the lifting of tax exemptions of government executed by the delegate and
corporations, as may be determined by the (2) it must fix a standard limits of which are sufficiently
Minister of Finance in consultation with the determinate or determinable to which the delegate must
Board of Energy: conform.
c) Any additional amount to be imposed on
petroleum products to augment the resources By the same token, the proper exercise of the delegated
of the Fund through an appropriate Order that power may be tested with ease. It seems obvious that what
may be issued by the Board of Energy the law intended was to permit the additional imposts for as
requiring payment of persons or companies long as there exists a need to protect the general public and
engaged in the business of importing, the petroleum industry from the adverse consequences of
manufacturing and/or marketing petroleum pump rate fluctuations. "Where the standards set up for
products; the guidance of an administrative officer and the action
d) Any resulting peso cost differentials in case taken are in fact recorded in the orders of such officer,
the actual peso costs paid by oil companies in so that Congress, the courts and the public are assured
the importation of crude oil and petroleum that the orders in the judgment of such officer conform
products is less than the peso costs computed to the legislative standard, there is no failure in the
using the reference foreign exchange rate as performance of the legislative functions."
fixed by the Board of Energy.

Petitioner Osmena claims that the creation of the Trust


Fund violates Article 6, 28(2) of the Constitution:

The Congress may, by law, authorize the President to


fix, within specified limits, and subject to such limitations
and restrictions as it may impose, tariff rates, import and
export quotas, tonnage and wharfage dues, and other
duties or imposts within the framework of the national
development program of the Government;

and, inasmuch as the delegation relates to the exercise


of the power of taxation, "the limits, limitations and
restrictions must be quantitative, that is, the law
must not only specify how to tax, who (shall) be
taxed (and) what the tax is for, but also impose a
specific limit on how much to tax."

PAL v CAB GrandAir applied for a Certificate of Public Whether or YES. The Civil Aeronautics Board has the authority to issue With the growing
Convenience and Necessity with the Civil Aeronautics not the Civil a Certificate of Public Convenience and Necessity, or complexity of modern life,
Petitioner: Board (CAB). The Chief Hearing Officer of the CAB Aeronautics Temporary Operating Permit to a domestic air transport the multiplication of the
Philippine issued a notice of hearing setting the application for Board can operator, who, though not possessing a legislative franchise, subjects of governmental
Airlines initial hearing and directing GrandAir to serve a copy of issue the meets all the other requirements prescribed by the law. Such regulation, and the
the application and notice to all scheduled Philippine Certificate of requirements were enumerated in Section 21 of R.A. 776. increased difficulty of
Respondent: Domestic operators. Public administering the laws,
Civil Convenience The power to authorize and control the operation of a public there is a constantly
Aeronautics GrandAir filed its compliance with the requirements and and utility is admittedly a prerogative of the legislature, since growing tendency towards
Board requested for the issuance of a Temporary Operating Necessity or Congress is that branch of government vested with plenary the delegation of greater
Permit (TOP). PAL , a holder of a legislative franchice to Temporary powers of legislation. The issue in this petition is whether or powers by the legislature,
operate air transport services, filed an opposition to Operating not Congress, in enacting Republic Act 776, has delegated and towards the approval of
GrandAirs application for a Certificate of Public Permit to a the authority to authorize the operation of domestic air the practice by the courts.
Convenience on the following grounds: prospective transport services to the respondent Board, such that
1. CAB has no jurisdiction to hear GrandAirs domestic air Congressional mandate for the approval of such authority is A franchise may be derived
application until the latter has obtained a transport no longer necessary. indirectly from the state
franchise to operate from Congress operator who through a duly designated
2. GrandAirs application is deficient in form and does not Congress has granted certain administrative agencies the agency, and to this extent,
substance Approval of GrandAirs application possess a power to grant licenses for, or to authorize the operation of the power to grant
would violate the equal protection clause legislative certain public utilities. With the growing complexity of modern franchises has frequently
3. There is no urgent need for the services being franchise to life, the multiplication of the subjects of governmental been delegated, even to
applied for operate as regulation, and the increased difficulty of administering the agencies other than those
such. laws, there is a constantly growing tendency towards the of a legislative nature.
CAB denied the opposition. delegation of greater powers by the legislature, and towards
the approval of the practice by the courts.
PAL also opposed GrandAirs application for a TOP,
saying that GrandAir does not possess the required It is generally recognized that a franchise may be derived
fitness and capability of operating the services applied indirectly from the state through a duly designated agency,
for under RA 776 and that there was no urgent public and to this extent, the power to grant franchises has
need for the services applied for. frequently been delegated, even to agencies other than those
of a legislative nature.
CAB approved the issuance of the TOP in favor of
GrandAir for a period of 3 months. PAL filed an MR but There is nothing in the law nor in the Constitution, which
it was denied. When the TOP was extended for 6 indicates that a legislative franchise is an indispensable
months, PAL filed the instant petition. requirement for an entity to operate as a domestic air
transport operator. Although Section 11 of Article XII
recognizes Congress' control over any franchise, certificate
or authority to operate a public utility, it does not mean
Congress has exclusive authority to issue the same.
Franchises issued by Congress are not required before each
and every public utility may operate. In many instances,
Congress has seen it fit to delegate this function to
government agencies, specialized particularly in their
respective areas of public service.

Congress, by giving the respondent Board the power to issue


permits for the operation of domestic transport services, has
delegated to the said body the authority to determine the
capability and competence of a prospective domestic air
transport operator to engage in such venture. This is not an
instance of transforming the respondent Board into a mini-
legislative body, with unbridled authority to choose who
should be given authority to operate domestic air transport
services. Congress, in this instance, has set specific
limitations on how such authority should be exercised. More
importantly, the said law has enumerated the requirements to
determine the competency of a prospective operator to
engage in the public service of air transportation.
Sand v Abad Respondent Abad Santos School of Nursing filed an W/N the lower Yes, the lower court erred. The Philippine Nursing Act, It is well settled that it is
Santos Educ action to declaratory relief against petitioners chairman court erred in Republic Act No. 877 as amended by Republic Act No. 4704 beyond the domain of the
and members of the Board of Examiners for Nurses declaring expressly empowers in section 9 thereof the petitioner board courts to inquire into the
Petitioner: seeking a declaration that "Article VIII, Rule 69, section Article VIII, "subject to the approval of the President of the Philippines [to] wisdom of the Act 9
Annie Sand 5 of the rules and regulations of the Board as void, Rule 69, promulgate such rules and regularly as may be necessary to vesting the petitioner
illegal and ineffective and without force of law and that Section 5 of carry out the provisions of this Act." Section 3 of the cited Act board with similar powers
Respondent: respondent is not required to comply with the terms and the Rules and specifically empowers petitioner board to inspect nursing to that likewise entrusted
Abad Santos provisions thereof. Regulations of colleges and schools and vests it with authority "to issue, to the Bureau of Private
Educational the Board suspend, revoke, or reissue certificates of registration for Education.
Institution, Respondent court rendered a decision declaring that void. practice of nursing.
School of the said regulation only has effect on new schools
Nursing and opened after its promulgation. It declared that Respondent challenge against the authority of petitioner
CFI - Rizal "paragraph 5, Rule 69, Art. VIII of the Rules and board to promulgate the disputed regulation for periodic
Regulations promulgated by the respondent members inspection by the board and for non-admission to the nurses'
of the Board of Examiners for Nurses is void, illegal and examination conducted by the board of graduates of sub-
of no effect against herein petitioner and its graduates. standard nursing Schools is manifestly untenable. There is a
statutory authority that plainly exists for petitioner board to
Hence, the present petition seeking a reversal of conduct periodic inspections of nursing schools in order to
respondent court's judgment and for a declaration of discharge its supervisory and regulatory functions vested in it
validity of the disputed rule. under the Philippine Nursing Act.

Respondent's argument that "to contend that the Board has


the same visitorial power as that conferred by law on the
Bureau of Private Education might result in a power struggle
between these two agencies of the government" manifestly
addresses itself to the wisdom of the provisions of the Act
granting similar visitorial powers to the petitioner board as a
specialized board composed of highly competent technical
person whom the Congress deemed could be relied upon to
maintain high standards for nursing education and the
nursing profession. It is well settled that it is beyond the
domain of the courts to inquire into the wisdom of the
Act vesting the petitioner board with similar powers to
that likewise entrusted to the Bureau of Private
Education.

While nursing schools were placed under the general


supervision of the Secretary of Education, the Congress
realized, in line with progressive trends, that a specialized
agency such as petitioner board of examiners for nurses
should exercise close supervision directly over nursing
schools since "the maintenance of an efficient ethical,
technical, moral and professional standard in the practice of
nursing" has to begin in the school where the nursing
education is given. Respondent does not claim and indeed
nothing in the record indications that the two agencies will not
act responsibly and coordinate their efforts for the
maintenance of high standards for nursing schools and in the
remote event of any serious disagreement, clear the same
through the office of the President under whose control and
supervision they pertain.

Asso Phil 7 desiccated coconut processing companies belonging W/N PCAs YES. The resolution was issued in excess of the power of the Only judicial review of
Coconut v to the APCD brought suit in the Regional Trial Court to board PCA to adopt or issue decisions of
PCA enjoin the PCA from issuing permits to certain resolution is Respondents argue that petitioner failed to exhaust available administrative agencies
applicants for the establishment of new desiccated null and void administrative remedies before coming to this court. made in the exercise of
Petitioner: coconut processing plants. Petitioner alleged that the for being an their quasi-judicial
Association of issuance of licenses to the applicants would violate undue The rule of requiring exhaustion of administrative remedies function is subject to the
Philippine PCA's Administrative Order No. 002, series of 1991, as exercise of before a party may seek judicial review has obviously no exhaustion doctrine
Coconut the applicants were seeking permits to operate in areas legislative application here. The resolution in question was issued by
Desiccators considered "congested" under the administrative order. power by an the PCA in the exercise of its rule-making or legislative
administrative power. However, only judicial review of decisions of
Respondent: TC issued a TRO and later on, a writ of preliminary body administrative agencies made in the exercise of their
Philippine injunction, enjoining the PCA from processing and quasi-judicial function is subject to the exhaustion
Coconut issuing licenses to several companies. PCA issued doctrine. The exhaustion doctrine stands as a bar to an
Authority Board Resolution No. 018-93 which no longer require action which is not yet complete. It is clear, in the case at bar,
those wishing to engage in coconut processing to apply that after its promulgation, the resolution of the PCA
for licenses as a condition for engaging in such abandoning regulation of the desiccated coconut industry
business. The regulation is now limited to monitoring became effective. To be sure, the PCA is under the direct
the volume of production. supervision of the President of the Philippines but there is
nothing in the pertinent laws defining the powers and
The PCA then proceeded to issue "certificates of functions of the PCA which requires rules and regulations
registration" to those wishing to operate desiccated issued by it to be approved by the President before they
coconut processing plants, prompting petitioner to the become effective.
OP not to approve the resolution in question. There was
no reply from OP hence this petition. PCA originally created by P.D. 232 then under P.D. No.
1468, it was made "an independent public corporation directly
reporting to, and supervised by, the President and charged
with carrying out the State's policy "to promote the rapid
integrated development and growth of the coconut and other
palm oil industry through a regulatory scheme set up by law.
The licensing system is the mechanism for regulation.

In disregard of this legislative purpose, the PCA adopted


questioned resolution which allows not only the indiscriminate
opening of new coconut processing plants but the virtual
dismantling of the regulatory infrastructure forsaking control
placed in its keeping, the PCA limits its function to the
innocuous one of "monitoring" compliance by coconut millers
with quality standards and volumes of production.

At all events, any change in policy must be made by the


legislative department of the government. The regulatory
system has been set up by law. It is beyond the power of
an administrative agency to dismantle it.

Pharma & Petition for certiorari under Rule 65 of the Rules of Whether YES. The national policy of protection, promotion and support Legislation is necessary to
Health Care Court, seeking to nullify Administrative Order (A.O.) No. respondent of breastfeeding cannot automatically be equated with a total transform the provisions of
Asso v Health 2006-0012 entitled, Revised Implementing Rules and officers of ban on advertising for breastmilk substitutes. the WHA Resolutions into
Sec Regulations of Executive Order No. 51, Otherwise the DOH domestic law. The
Known as The "Milk Code," Relevant International acted without In view of the enactment of the Milk Code which does not provisions of the WHA
Petitioner: Agreements, Penalizing Violations Thereof, and for or in excess contain a total ban on the advertising and promotion of Resolutions cannot be
Pharmaceutic Other Purposes (RIRR). Petitioner posits that the RIRR of breastmilk substitutes, but instead, specifically creates an considered as part of the
al and Health is not valid as it contains provisions that are not jurisdiction, IAC which will regulate said advertising and promotion, it law of the land that can
Care constitutional and go beyond the law it is supposed to or with GAD follows that a total ban policy could be implemented only be implemented by
Association of implement. amounting to pursuant to a law amending the Milk Code passed by the executive agencies
the lack or constitutionally authorized branch of government, the without the need of a law
Philippines excess of legislature. enacted by the
jurisdiction, legislature.
Respondent: Note: its a really long case. Mostly talked about how and in Thus, only the provisions of the Milk Code, but not those
Health international law can become law of the land and how violation of of subsequent WHA Resolutions, can be validly
Secretary the RIRR and the EO are different from each other. the implemented by the DOH through the subject RIRR.
Francisco provisions of
Duque, Health the
UnderSec Dr. *consti case - breast milk Constitution
Evelyn Nieto in
promulgating
the RIRR?

Kilusang The instant petition for certiorari assails the Whether or NO. The authority given by the LTFRB to the provincial bus What has been delegated
Mayo Uno v constitutionality and validity of certain memoranda, not the operators to set a fare range over and above the authorized cannot be delegated. This
Garcia circulars and/or orders of the Department of questioned existing fare, is illegal and invalid as it is tantamount to an doctrine is based on the
Transportation and Communications (DOTC) and the memoranda, undue delegation of legislative authority. Potestas ethical principle that such a
Petitioner: Land Transportation Franchising and Regulatory Board circulars and delegata non delegari potest. What has been delegated delegated power
Kilusang LTFRB) 2 which, among others, orders are cannot be delegated. This doctrine is based on the ethical constitutes not only a right
Mayo Uno a. authorize provincial bus and jeepney operators valid? principle that such a delegated power constitutes not only a but a duty to be performed
Labor Center to increase or decrease the prescribed right but a duty to be performed by the delegate through the by the delegate through the
transportation fares without application instrumentality of his own judgment and not through the instrumentality of his own
Respondent: therefor with the LTFRB and without intervening mind of another. A further delegation of such judgment and not through
Hon. Jesus B. hearing and approval thereof by said agency power would indeed constitute a negation of the duty in the intervening mind of
Garcia, in violation of Sec. 16(c) of Commonwealth Act violation of the trust reposed in the delegate mandated another.
LTFRB and No. 146, as amended, otherwise known as the to discharge it directly. The policy of allowing the provincial
Provincial Bus Public Service Act, and in derogation of bus operators to change and increase their fares at will would
Operators LTFRB's duty to fix and determine just and result not only to a chaotic situation but to an anarchic state
Association of reasonable fares by delegating that function to of affairs. This would leave the riding public at the mercy of
the bus operators, and transport operators who may increase fares every hour,
Philippines b. establish a presumption of public need in every day, every month or every year, whenever it pleases
favor of applicants for certificates of public them or whenever they deem it "necessary" to do so.
convenience (CPC) and place on the
oppositor the burden of proving that there Given the complexity of the nature of the function of
is no need for the proposed service, in rate-fixing and its far-reaching effects on millions of
patent violation not only of Sec. 16(c) of CA commuters, government must not relinquish this important
146, as amended, but also of Sec. 20(a) of the function in favor of those who would benefit and profit from
same Act mandating that fares should be "just the industry. Neither should the requisite notice and hearing
and reasonable." It is, likewise, violative of the be done away with. The people, represented by reputable
Rules of Court which places upon each party oppositors, deserve to be given full opportunity to be heard in
the burden to prove his own affirmative their opposition to any fare increase.
allegations.
The offending provisions contained in the questioned As for the presumption of public need, a certificate of public
issuances pointed out by petitioner, have resulted in the convenience (CPC) is an authorization granted by the LTFRB
introduction into our highways and thoroughfares for the operation of land transportation services for public use
thousands of old and smoke-belching buses, many of as required by law.
which are right-hand driven, and have exposed our
consumers to the burden of spiraling costs of public The establishment of public need in favor of an applicant
transportation without hearing and due process. reverses wel-l-settled and institutionalized judicial, quasi-
-judicial and administrative procedures. It allows the party
who initiates the proceedings to prove, by mere application,
his affirmative allegations. Moreover, the offending provisions
of the LTFRB memorandum circular in question would in
effect amend the Rules of Court by adding another disputable
presumption in the enumeration of 37 presumptions under
Rule 131, Section 5 of the Rules of Court. Such usurpation of
this Court's authority cannot be countenanced as only this
Court is mandated by law to promulgate rules concerning
pleading, practice and procedure.

Deregulation, while it may be ideal in certain situations, may


not be ideal at all in our country given the present
circumstances. Advocacy of liberalized franchising and
regulatory process is tantamount to an abdication by the
government of its inherent right to exercise police power, that
is, the right of government to regulate public utilities for
protection of the public and the utilities themselves.

Perez vs LPG BP 33, as amended, penalizes illegal trading, hoarding, W/N the YES. For an administrative
Refillers overpricing, adulteration, underdelivery, and underfilling circular is regulation to have the force
of petroleum products, as well as possession for trade valid Petitioner argues that the penalties for the acts and of penal law, the
Petitioner: of adulterated petroleum products and of underfilled omissions enumerated in the Circular are sanctioned by B.P. requirements are:
Vincent Perez liquefied petroleum gas (LPG) cylinders, and provided Blg. 33 and Republic Act No. 8479. Petitioner adds that 1. the violation of the
for a penalty for violators. On June 9, 2000, Circular No. Republic Act No. 7638 also authorize the DOE to impose the administrative regulation
Respondent: 2000-06-010 was issued by the DOE to implement B.P. penalties provided in the Circular. Respondent counters that must be made a crime by
LPG Refillers Blg. 33. the enabling laws, B.P. Blg. 33 and R.A. No. 8479, do not the delegating statute itself
Association of expressly penalize the acts and omissions enumerated in the 2. the penalty for such
the Respondent LPG Refillers asked the DOE to set aside Circular. violation must be provided
Philippines, the Circular for being contrary to law. The DOE, by the statute itself.
Inc. however, denied the request for lack of merit. On The Circular satisfies the first requirement. B.P. Blg. 33
appeal, the TC nullified the Circular on the ground that it criminalizes illegal trading, adulteration, underfilling,
introduced new offenses not included in the law. The hoarding, and overpricing of petroleum products. Under this
court intimated that the Circular, in providing penalties general description of what constitutes criminal acts involving
on a per cylinder basis for each violation, might exceed petroleum products, the Circular merely lists the various
the maximum penalty under the law. modes by which the said criminal acts may be perpetrated.
These specific acts and omissions are obviously within the
contemplation of the law, which seeks to curb the pernicious
practices of some petroleum merchants.

For the second requirement, the Circular is in accord with the


law. Under B.P. Blg. 33, the penalty for any person who
commits any of the acts is limited to a minimum of P20,000
and a maximum of P50,000. Under the Circular, the
maximum pecuniary penalty for retail outlets is P20,000,
within the range allowed by law. However, for the refillers,
marketers, and dealers, the Circular is silent as to any
maximum monetary penalty. This mere silence, nonetheless,
does not amount to violation of the aforesaid statutory
maximum limit. The mere fact that the Circular provides
penalties on a per cylinder basis does not in itself run counter
to the law since all that B.P. Blg. 33 prescribes are the
minimum and the maximum limits of penalties.

It is B.P. Blg. 33 which defines what constitute


punishable acts which set the minimum and maximum
limits for the corresponding penalties. The Circular
merely implements the said law. Nothing in the Circular
contravenes the law. The enabling laws on which the
Circular is based were specifically intended to provide
the DOE with increased administrative and penal
measures.

PERALTA v Petitioner was appointed Trade-Specialist II in the DTI. Whether or NO. The construction by the respondent Commission of R.A. When an administrative or
CSC He received his initial salary, covering the period from not the CSC 2625 is not in accordance with the legislative intent. R.A. executive agency renders
September to October 1989. Since he had no resolution is 2625 specifically provides that government employees are an opinion or issues a
Petitioner: accumulated leave credits, DTI deducted from his valid? entitled to fifteen (15) days vacation leave of absence with full statement of policy, it
Maynard salary the amount corresponding to his absences during pay and fifteen (15) days sick leave with full pay, exclusive of merely interprets a pre-
Peralta the covered period, inclusive of Saturdays and Saturdays, Sundays and Holidays in both cases. Thus, the existing law; and the
Sundays. law speaks of the granting of a right and the law does administrative interpretation
Respondent: not provide for a distinction between those who have of the law is at best
CSC Petitioner sent a memorandum to Amando Alvis (Chief accumulated leave credits and those who have advisory, for it is the courts
General Administrative Service) inquiring as to the law exhausted their leave credits in order to enjoy such right. that finally determine what
on salary deductions, if the employee has no leave the law means.
credits. Alvis answered petitioners query in a Ubi lex non distinguit nec nos distinguere debemus.
memorandum Chapter 5.49 of the Handbook of Administrative construction,
Information on the Philippine Civil Service which states The fact remains that government employees, whether or if we may repeat, is not
that when an employee is on leave without pay on a not they have accumulated leave credits, are not necessarily binding upon
day before or on a day immediately preceding a required by law to work on Saturdays, Sundays and the courts. Action of an
Saturday, Sunday or Holiday, such Saturday, Sunday or Holidays and thus they can not be declared absent on administrative agency may
Holiday shall also be without pay. such non-working days. They cannot be or are not be disturbed or set aside by
Respondent Commission promulgated Resolution No. considered absent on non-working days; they cannot and the judicial department if
90-497, ruling that the action of the DTI in deducting should not be deprived of their salary corresponding to said there is an error of law, or
from the salary of petitioner, a part thereof non-working days just because they were absent without pay abuse of power or lack of
corresponding to 6 days is in order. on the day immediately prior to, or after said non- working jurisdiction or grave abuse
days. A different rule would constitute a deprivation of of discretion clearly
property without due process. conflicting with either the
letter or the spirit of a
The general rule vis-a-vis legislation is that an legislative enactment.
unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it created no
office; it is in legal contemplation as inoperative as though it
had never been passed.

MENDOZA v Orlando Mendoza, was a Senior Revenue Inspector in W/N his NO. Mangubat v. De Castro: it
CSC the Office of the Treasurer of Tarlac.. In a letter, Jose G. appeal to the was held that administrative
Macapinlac, Mayor of Tarlac, ordered petitioner to merit systems Petitioner claims that he had filed his MR within the rules of procedure shall be
Petitioner: explain why no administrative and criminal charges protection reglementary period and said filing suspended the period for construed liberally in order
Orlando should be filed against him for falsification of realty tax board was appeal to the MSPB. The records of respondent show that a to promote their object and
Mendoza receipts and unauthorized collections of real estate perfected on copy of the letter-decision dated April 6 was sent by assist the parties in
taxes. The letter complaint was sent on March 18 and time registered mail on April 7 and received on April 11. Petitioner claiming just, speedy and
Respondent: was received by the Office of the Municipal Treasurer therefore had only until April 26, 1989 within which to file said inexpensive determination
CSC and on March 17. The respondent Mayor, not having motion for reconsideration. Instead of filing a MR on or before of their respective claims
Jose received any answer, rendered a letter-decision dated April 26, 1989, petitioner filed such a motion only on July 4. and defenses. But before
Macapinlac April 6 dismissing petitioner from the service. This was procedural rules can be
received on April 11. Before procedural rules can be relaxed to give way to relaxed to give way to
substantive justice, it is implicit that such liberality be substantive justice, it is
In a letter dated April 18, 1989, petitioner asked for a applied in a proper case. We do not consider the instant implicit that such
reconsideration of the decision claiming that he was petition a proper case. In a motion wherein movant seeks liberality be applied in a
never furnished a copy of the complaint, and was not the relaxation of procedural rules in order to allow him to proper case.
afforded the right to present his evidence at a formal present evidence in his behalf, he has to show prima
hearing. facie that he has a meritorious defense. In a motion wherein
movant seeks the
Respondent didnt act on the MR. Petitioner appealed We decided this case with full awareness of the decisions in relaxation of procedural
the letter-decision of the Mayor to the Merit Systems Paredes v. CSC and Mendez v CSC, where we held that rules in order to allow
Protection Board (MSPB). The respondent moved for only the respondent in the administrative disciplinary him to present evidence
the dismissal, contending that it was belatedly filed and case and not the complainant, can appeal from a decision in his behalf, he has to
had become final and executory. The MSPB denied the of the Merit Systems Protection Board. These decisions show prima facie that he
motion to dismiss and directed the respondent to file were anchored on the interpretation of Section 39(a) of P.D. has a meritorious
and answer. No. 807, the "Philippine Civil Service Law," which provides defense.
that appeals to the CSC shall be made by "the party
Not receiving any comment, the MSPB considered the adversely affected by the decision." We interpreted the A law limiting the right to
matter submitted for decision and rendered a decision quoted phrase as referring to the respondent in the appeal to the respondent
setting aside the letter-decision and reinstating administrative case. in the administrative case
petitioner to his former position. It held that the period is a rule of procedure, not
for appeal was suspended when petitioner filed an MR When private respondent appealed the decision of the MSPB of substantive law.
and was denied due process. to the CSC, petitioner never questioned the propriety of the Failure to invoke timely a
appeal and preferred to defend the correctness of the rule of procedure in favor
Mayor appeal to CSC which reversed the decision of decision. Likewise, petitioner failed to question before this of a party constitutes a
MSPB. Held that petitioners appeal was filed out of Court the right of private respondent to appeal from the waiver.
time and was afforded due process. decision of the MSPB. We treat such inactions of petitioner
as a waiver on his part to question the authority of the CSC to
review the decision of the MSPB. A law limiting the right to
appeal to the respondent in the administrative case is a
rule of procedure, not of substantive law. Failure to
invoke timely a rule of procedure in favor of a party
constitutes a waiver.

CIRev vs Benguet Corporation applied for and was granted by Whether VAT NO.
Benguet Corp the BIR zero-rated status on its sales of gold to the Ruling No.
Central Bank. A few months later, the Deputy CIR 008-92 The determination of the issue of retroactivity hinges on
Petitioner: issued a VAT RULING which declared that the (which whether respondent would suffer prejudice from the
Commission aforementioned sale is considered as an export sale revoked retroactive application of VAT Ruling No. 008-92.
er of Internal subject to zero-rate, pursuant to Section 100 of the Tax previous
Revenue Code as amended by EO 2173. BIR came out with 6 issuances of In transactions taxed at a 10% rate, when at the end of any
other issuances reiterating this zero-rating. the petitioner given taxable quarter the output VAT exceeds the input VAT,
Respondent: and which the excess shall be paid to the government; when the input
Benguet Thus, relying on the issuances, respondent continued to respondent VAT exceeds the output VAT, the excess would be carried
Corporation sell gold to the CB for 2 years and entered into heavily relied over to VAT liabilities for the succeeding quarter or quarters.
transactions that resulted in input VAT incurred in upon) is valid On the other hand, transactions which are taxed at zero-rate
relation to the subject sales of gold. It then filed and may be do not result in any output tax. Input VAT attributable to zero-
applications for tax refunds or tax credits corresponding legally rated sales could be refunded or credited against other
to input VAT for the amounts of their sales. applied internal revenue taxes at the option of the taxpayer.
retroactively
The applications were not acted upon by the BIR and to In both situations, the taxpayer has the option not to carry
later, BIR issued a deficiency assessment against respondent. any VAT cost because in the zero-rated transaction, the
Benguet when, after applying its creditable output VAT taxpayer is allowed to recover input tax from the BIR without
costs against the retroactive 10% VAT levy (instead of need to pay output tax, while in 10% rated VAT, the taxpayer
the 0% as indicated in the issuances), there result a is allowed to pass on both input and output VAT to the buyer.
balance of excess output VAT.
Proceeding from the foregoing, there appears to be no
This express disallowance for Benguets application for upfront economic difference in changing the sale of gold to
refunds and its deficiency assessment were based on a the Central Bank from a 0% to 10% VAT rate provided that
BIR VAT Ruling (008-92) that was issued subsequent to respondent would be allowed the choice to pass on its VAT
the consummation of its sales with CB which provided costs to the Central Bank. In the instant case, the retroactive
that sales of gold to the CB were considered as export application of VAT Ruling No. 008-92 unilaterally forfeited or
sales and thus, subject to 10% VAT. In addition, this withdrew this option of respondent. Thus, it is clear that
later BIR ruling modified and superseded all respondent suffered economic prejudice when its
inconsistent BIR issuances. BIR also issued VAT Ruling consummated sales of gold to the Central Bank were
No. 059-92 dated 28 April 1992 and Revenue taken out of the zero-rated category.
Memorandum Order No. 22-92 which decreed that the
revocation of VAT Ruling No. 3788-88 by VAT Ruling At the time when the subject transactions were
No. 008-92 would not unduly prejudice mining consummated, the prevailing BIR regulations relied upon by
companies and, thus, could be applied retroactively. respondent ordained that gold sales to the Central Bank were
zero-rated. The BIR interpreted Sec. 100 of the NIRC in
Benguet file 3 separate petitions for review with the relation to Sec. 2 of E.O. No. 581 s. 1980 which prescribed
CTA, arguing that a retroactive application of the BIR that gold sold to the Central Bank shall be considered export
ruling would violate Section 246 of the NIRC and greatly and therefore shall be subject to the export and premium
prejudice the taxpayer. Petitioner on the other hand, duties. In coming out with this interpretation, the BIR also
maintained that BIR VAT Ruling No. 008-92 is, firstly, considered Sec. 169 of Central Bank Circular No. 960 which
not void and entitled to great respect, having been states that all sales of gold to the Central Bank are
issued by the body charged with the duty of considered constructive exports.
administering the VAT law, and secondly, it may validly
be given retroactive effect since it was not prejudicial to Respondent should not be faulted for relying on the BIRs
respondent. interpretation of the said laws and regulations. While it is
true, as petitioner alleges, that government is not
CTA dismissed the petitions. When appealed to the CA, estopped from collecting taxes which remain unpaid on
the CA reversed in favor of Benguet, ruling that had account of the errors or mistakes of its agents and/or
respondent known that such sales were subject to 10% officials and there could be no vested right arising from
VAT, which rate was not the prevailing rate at the time an erroneous interpretation of law, these principles must
of the transactions, respondent would have passed on give way to exceptions based on and in keeping with the
the cost of the input taxes to the Central Bank. interest of justice and fairplay, as has been done in the
CIR elevated the case to the SC. instant matter.
SEGOVIA vs. Vicente Segovia was appointed justice of the peace in W/N Act PROSPECTIVE EFFECT ONLY.
NOEL Cebu. He continuously occupied this position until he 3017, which
exceeded the age of 65, and thereafter he was ordered provides that The proviso added to section 203 of the Administrative Code
by the Secretary of Justice to vacate the office. Since justices of by section 1 of Act No. 3107, providing that justices and
then, Pedro Noel, the auxiliary Justice of the Peace has the peace auxiliary justices of the peace shall be appointed to serve
acted as Justice for that municipality and auxiliary until they have reached the age of sixty-five years, should be
justices of given prospective effect only, and so is not applicable to
Segovia, desirous of avoiding a public scandal and of the peace, justices of the peace and auxiliary justices of the peace
opposing physical resistance to the occupancy of the shall be appointed before Act No. 3107 went into force.
office of justice of the peace by the auxiliary justice of appointed to Section 203 of the Administrative Code in its first paragraph
the peace, instituted friendly quo warranto proceedings serve until provides that "one justice of the peace and one auxiliary
in the CFI to inquire into the right of Noel to occupy the they have justice of the peace shall be appointed by the Governor-
office, to oust the latter therefrom, and to procure reached the General for the City of Manila, the City of Baguio, and for
reinstatement age of 65 each municipality, township, and municipal district in the
years, should Philippine Islands, and if the public interests shall so require,
Noel interposed a demurer on the ground that the be given for any other minor political division or unorganized territory
complaint did not allege facts sufficient to constitute a retroactive or in said Islands." It was this section which section 1 of Act No.
cause of action because Act 3017 was constitutional prospective 3107 amended by adding at the end thereof the following
and because Segovia was already 65 years old and so effect proviso: "Provided, That justices and auxiliary justices of the
was no longer Justice of the Peace. Judgment was peace shall be appointed to serve until they have reached the
rendered in favor of Segovia. age of sixty-five years." But section 206 of the Administrative
Code entitled "Tenure of office," and reading "a justice of the
peace having the requisite legal qualifications shall hold
office during good behavior unless his office be lawfully
abolished or merged in the jurisdiction of some other justice,"
was left unchanged by Act No. 3107.

A statute operates prospectively only and never


retroactively, unless the legislative intent to the contrary
is made manifest either by the express terms of the
statute or by necessary implication. The same rule is
followed by the courts with reference to public offices. A
well-known New York decision held that "though there is no
vested right in an office, which may not be disturbed by
legislation, yet the incumbent has, in a sense, a right to his
office. If that right is to be taken away by statute, the terms
should be clear in which the purpose is stated." In another
case, a new constitutional provision as to the advanced age
which should prevent the incumbents of certain judicial
offices from retaining them was held prospective; it did not
apply to persons in office at the time of its taking effect.

The language of Act No. 3107 amendatory of section 203 of


the Administrative Code, gives no indication of retroactive
effect. The law signifies no purpose of operating upon
existing rights. A proviso was merely tacked on to section
203 of the Administrative Code, while leaving intact section
206 of the same Code which permits justices of the peace to
hold office during good behavior. In the absence of provisions
expressly making the law applicable to justices of the peace
then in office, and in the absence of provisions impliedly
indicative of such legislative intent, the courts would not be
justified in giving the law an interpretation which would
legislate faithful public servants out of office.

Nasipit The Region X Tripartite Wages and Productivity Board Is a guideline NO. The power to prescribe Guidelines is lodged in the The issuance of an
Lumber vs (RTWPB) issued Wage Order No. RX-01, providing for issued by an NWPC, not in the RTWPB. Thus, the insertion in administrative rule or
Nat'l Wages an increase in minimum wage rates applicable to RTWPB Guideline No. 3 of Distressed Industry as a criterion for regulation must be in
without the
Comm workers and employees in the private sector in Northern exemption is void. harmony with the
approval of
Mindanao (Region X). Subsequently, a supplementary or, worse, enabling law. If a
Petitioners:: Wage Order No. RX-01-A was issued by RTWPB, contrary to RA 6727 (the Wage Rationalization Act), amending the Labor discrepancy occurs
Nasipit which added that upon effectivity of the original order the Code, created both the NWPC and the RTWPB and defined between the basic law
Lumber (Wage Order No. RX-01), all workers and employees in guidelines their respective powers. Article 121 of the Labor Code lists and an implementing rule
Company & the private sector in said Region already receiving promulgated the powers and functions of the NWPC, granting it the power or regulation, it is the
Philippine wages above the statutory minimum wage rates up to by the NWPC to: (c) To prescribe rules and guidelines for the former that prevails.
valid?
Wallboard P120 per day shall also receive an increase as provided determination of appropriate minimum wage and
Corporation in Wage Order No. RX-01 productivity measures at the regional, provincial or A statutory grant of powers
industry levels; and (d) To review regional wage levels should not be extended by
Respondents: Applicants Nasipit Lumber Company (NALCO), set by the Regional Tripartite Wages and Productivity implication beyond what
National Philippine Wallboard Corporation (PWC), and Anakan Boards to determine if these are in accordance with may be necessary for their
Wages and Lumber Company (ALCO) jointly filed an application for prescribed guidelines and national development plans. just and reasonable
Productivity exemption from the above-mentioned Wage Orders, execution. Official powers
Commission arguing that it is a distressed establishment as provided Article 122 of the Labor Code, on the other hand, prescribes cannot be merely assumed
(NWPC), under Section 3(3) of Guidelines No. 3, issued by the the powers of the RTWPB thus: (b) To determine and fix by administrative officers,
Western same Board herein, A distressed establishment is minimum wage rates applicable in their region, nor can they be created by
Agusan an establishment that is engaged in an industry that provinces or industries therein and to issue the the courts in the exercise of
Workers is distressed due to conditions beyond its control corresponding wage orders, subject to guidelines issued their judicial functions.
Union, as may be determined by the Board in consultation by the Commission;
Tungao with DTI and NWPC
Lumber The foregoing clearly grants the NWPC, not the RTWPB, the
Workers Applicants aver that they are engaged in the logging power to prescribe the rules and guidelines for the
Union, & and integrated wood processing industry but are determination of minimum wage and productivity
United distressed due to conditions beyond their control. (They measures.While the RTWPB has the power to issue wage
Workers cited several factors: depressed economic conditions orders under the Labor Code, such orders are subject to the
Union due to worldwide recession, peace and order and other guidelines prescribed by the NWPC.
emergency related problems which caused suspension
of operations, insufficient raw materials, increases in the Rule IV, Section 2 thereof, allows the RTWPB to issue wage
cost of production, etc.) orders exempting enterprises from the coverage of the
prescribed minimum wages. However, the NWPC has the
Meanwhile, respondent Unions opposed this exemption power not only to prescribe guidelines to govern wage
on the ground that said companies are not distressed orders, but also to issue exemptions therefrom, as the said
because their capitalization has not been impaired by rule provides that [w]henever a wage order provides for
25%. exemption, applications thereto shall be filed with the
appropriate Board which shall process the same, subject to
RTWPB approved the joint application for exemption, guidelines issued by the Commission. In short, the NWPC
citing capital impairment of the applicant corporations, lays down the guidelines which the RTWPB implements.
liquidity problems, scarcity of raw materials, and other
external factors beyond the control of the corporations. Significantly, the NWPC authorized the RTWPB to issue
Dissatisfied with this ruling, respondents lodged an exemptions from wage orders, but subject to its review and
appeal with the National Wages and Productivity approval. Since the NWPC never assented to Guideline No.
Commission (NWPC), which affirmed ALCOs 3 of the RTWPB, the said guideline is inoperative and cannot
exemption but denied that of NALCO and PWC. NWPC be used by the latter in deciding or acting on petitioners
reasoned that: Guidelines No. 3 cannot be used as application for exemption.
valid basis for granting the applicants an exemption
because it did not pass approval of the NWPC. To allow RTWPB Guideline No. 3 to take effect without the
Under the Rules of Procedure on Minimum Wage approval of the NWPC is to arrogate unto RTWPB a power
Fixing, issued by NWPC pursuant to Republic Act 6727, vested in the NWPC by Article 121 of the Labor Code, as
particularly Section 1 of Rule VIII thereof provides that: amended by RA 6727.
Section 1. Application For Exemption. Whenever a
wage order provides for exemption, applications It is a hornbook doctrine that the issuance of an
thereto shall be filed with the appropriate Board administrative rule or regulation must be in harmony
which shall process the same, subject to guidelines with the enabling law. If a discrepancy occurs between
issued by the Commission. the basic law and an implementing rule or regulation, it
Clearly, it is the Commission that is empowered to set is the former that prevails. This is so because the law
[the] criteria on exemption from compliance with wage cannot be broadened by a mere administrative issuance. It is
orders. While the Boards may issue supplementary axiomatic that [a]n administrative agency cannot amend an
guidelines on exemption, the same should first pass the act of Congress.
Commission for the purpose of determining its
conformity to the latters general policies and guidelines A statutory grant of powers should not be extended by
relative thereto. implication beyond what may be necessary for their just and
reasonable execution. Official powers cannot be merely
The applicable guidelines on exemption therefore is that assumed by administrative officers, nor can they be created
one issued by the Commission, which focused mainly by the courts in the exercise of their judicial functions.
on capital impairment as the criteria as to whether a
corporation may be considered distressed. Only ALCO There is no basis for petitioners claim that their vested rights
met this qualification. were prejudiced by the NWPCs alleged retroactive
application of its own rules which were issued on February
In denying petitioners MR, NWPC further reasoned that 25, 1991 and took effect on March 18, 1991. Such claim
the fact that applicant companies relied in good faith cannot stand because Guideline No. 3, as previously
upon Guidelines No. 3 issued by the Board a quo, the discussed and as correctly concluded by the NWPC, was not
same is not sufficient reason that they should be valid and, thus, cannot be a source of a right; much less, a
assessed based on the criteria of said Guidelines vested one.
considering that it does not conform to the policies and
guidelines relative to wage exemption issued by this
Commission pursuant to RA 6727. Consequently, it has
no force and effect. As such, said Guidelines No. 3
cannot therefore be a source of a right no matter if one
has relied on it in good faith.

Hence, petitioner brought this recourse to the SC.

Ollada v. Sec Under Sec.334 (now Sec.232) of the National Internal Whether the YES. No one is better qualified to
of Finance Revenue Code, all corporations, companies, Secretary of interpret the intent behind
partnerships or persons required by law to pay Finance The Secretary of Finances Resolution that Revenue the revenue regulations
Petitioner: internal revenue taxes whose gross quarterly sales, acted within Regulations No. V-43 was not intended to have than the authority that
Felipe Ollada earnings, etc. do not exceed P5000 are required to his authority retroactive effect was fully within his powers and issued them.
keep & use a simplified set of Bookkeeping Records in not giving authority and becomes part of the regulation itself. The
Respondent: duly authorized by the Sec. of Finance. Pursuant to retroactive Resolution is not clearly unreasonable and arbitrary, and is, ...the the Secretary may,
Secretary of such authority, the Sec. of Finance promulgated effect to thus, entitled to recognition & respect from the Courts. No at any time, amend or
Finance Revenue Regulations No. V-13 authorizing the use by Revenue one is better qualified to interpret the intent behind the revoke any of the
the taxpayers whose gross quarterly sales do not Regulations revenue regulations than the authority that issued them. regulations he issued so
exceed P5000 a simplified set of bookkeeping records. No. V-43? long as it is in
Granting that the subsequent permission to use old consonance with the
The Secretary amended Revenue Regulations No. V-13 bookkeeping forms was incompatible with the new regulation, statute. The Secretary may
by promulgating Revenue Regulations No. V-43, which such incompatibility would not render the permission illegal change or repeal any of the
requires that simplified set of bookkeeping records and void since the Secretary may, at any time, amend or regulations he issued as he
should be especially designed for each class/kind of revoke any of the regulations he issued so long as it is in may see fit.
trade and prepared by a CPA. The new regulation was consonance with the statute. The Secretary may change or
not intended to have a retroactive effect and, therefore, repeal any of the regulations he issued as he may see fit.
could not adversely affect those who had already
acquired an accrued right under the old regulation.

A CPA prepared & devised his own simplified sets of


bookkeeping records under the new regulation. He then
instituted proceedings praying that respondent financial
officials be enjoined from further accepting, authorizing,
and tolerating the publics use of simplified sets of
bookkeeping records not prepared in accordance with
the new regulation.