Академический Документы
Профессиональный Документы
Культура Документы
The rule-making power must be confined to details for regulating Pursuant to its rule-making and regulatory powers, the National
the mode or proceeding to carry into effect the law as it his been Telecommunications Commission (NTC) issued Memorandum
enacted. The power cannot be extended to amending or expanding Circular No. 13-6-2000, promulgating rules and regulations on the
the statutory requirements or to embrace matters not covered by billing of telecommunications services. On August 30, 2000, the
the statute. Rules that subvert the statute cannot be sanctioned. NTC issued a Memorandum to all cellular mobile telephone service
(CMTS) operators which contained measures to minimize if not
Administrative regulations issued by a Department Head in totally eliminate the incidence of stealing of cellular phone units.
conformity with law have the force of law As he exercises the rule- This was followed by another Memorandum dated October 6, 2000
making power by delegation of the lawmaking body, it is a requisite addressed to all public telecommunications entities, which reads:
that he should not transcend the bound demarcated by the statute
for the exercise of that power; otherwise, he would be improperly This is to remind you that the validity of all prepaid cards
exercising legislative power in his own right and not as a surrogate sold on 07 October 2000 and beyond shall be valid for at
of the lawmaking body. least two (2) years from date of first use pursuant to MC 13-
6-2000.
A penal statute is strictly construed. While an administrative
agency has the right to make ranks and regulations to carry into In addition, all CMTS operators are reminded that all SIM
effect a law already enacted, that power should not be confused packs used by subscribers of prepaid cards sold on 07
with the power to enact a criminal statute. An administrative October 2000 and beyond shall be valid for at least two (2)
agency can have only the administrative or policing powers years from date of first use. Also, the billing unit shall be on
expressly or by necessary implication conferred upon it.
a six (6) seconds pulse effective 07 October 2000. For strict
compliance. 1. WON Respondent court erred in holding respondents failed to
exhaust administrative remedy.
On October 20, 2000, petitioners ISLACOM and PILTEL filed against 2. WON NTC has Jurisdiction over the case.
the NTC, Commissioner Joseph A. Santiago, Deputy Commissioner 3. WON the Billing Circular issued by NTC is unconstitutional.
Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an
action for declaration of nullity of NTC Memorandum Circular No. Ruling:
13-6-2000 (the Billing Circular) and the NTC Memorandum dated
October 6, 2000, with prayer for the issuance of a writ of 1ST ISSSUE Administrative agencies possess quasi-legislative or
preliminary injunction and temporary restraining order at the rule-making powers and quasi-judicial or administrative
Regional Trial Court of Quezon City, Branch 77. adjudicatory powers. Quasi-legislative or rule-making power is the
power to make rules and regulations which results in delegated
Petitioners Islacom and Piltel alleged, that the NTC has no legislation that is within the confines of the granting statute and
jurisdiction to regulate the sale of consumer goods such as the the doctrine of non-delegability and separability of powers.
prepaid call cards since such jurisdiction belongs to the Department
of Trade and Industry under the Consumer Act of the Philippines; The rules and regulations should be within the scope of the
that the Billing Circular is oppressive, confiscatory and violative of statutory authority granted by the legislature to the administrative
the constitutional prohibition against deprivation of property agency. It is required that the regulation be germane to the objects
without due process of law; that the Circular will result in the and purposes of the law, and be not in contradiction to, but in
impairment of the viability of the prepaid cellular service by unduly conformity with, the standards prescribed by law.17 They must
prolonging the validity and expiration of the prepaid SIM and call conform to and be consistent with the provisions of the enabling
cards; and that the requirements of identification of prepaid card statute in order for such rule or regulation to be valid. The
buyers and call balance announcement are unreasonable. Hence, administrative body exercises its quasi-judicial power when it
they prayed that the Billing Circular be declared null and void ab performs in a judicial manner an act which is essentially of an
initio. Globe Telecom and Smart filed a joint Motion for Leave to executive or administrative nature, where the power to act in such
Intervene which was granted by the trial court. On October 27, manner is incidental to or reasonably necessary for the
2000, the trial court issued a temporary restraining order enjoining performance of the executive or administrative duty entrusted to it.
the NTC from implementing Memorandum Circular No. 13-6-2000
and the Memorandum dated October 6, 2000. In questioning the validity or constitutionality of a rule or regulation
issued by an administrative agency, a party need not exhaust
In the meantime, respondent NTC and its co-defendants filed a administrative remedies before going to court. This principle
motion to dismiss the case on the ground of petitioners' failure to applies only where the act of the administrative agency concerned
exhaust administrative remedies. Subsequently, the trial court was performed pursuant to its quasi-judicial function, and not when
denied the defendants motion to dismiss. Defendants filed a the assailed act pertained to its rule-making or quasi-legislative
motion for reconsideration, which was denied in an Order dated power.
February 1, 2001.
Even assuming that the principle of exhaustion of administrative
Respondent NTC thus filed a special civil action for certiorari and remedies applies in this case, the records reveal that petitioners
prohibition with the Court of Appeals, which was granted and sufficiently complied with this requirement. Petitioners were able to
annulled the injunction issued by the lower court. register their protests to the proposed billing guidelines. They
submitted their respective position papers setting forth their
Petitioners' motions for reconsideration were denied in a Resolution objections and submitting proposed schemes for the billing
dated January 10, 2002 for lack of merit. Hence, the instant petition circular. After the same was issued, petitioners wrote successive
for review filed by Smart and Piltel. letters dated July 3, 2000 and July 5, 2000, asking for the
suspension and reconsideration of the so-called Billing Circular. This
Issues:
was taken by petitioners as a clear denial of the requests contained Ponente: MORELAND, J.
in their previous letters, thus prompting them to seek judicial relief.
Facts:
2ND ISSSUE In like manner, the doctrine of primary jurisdiction
applies only where the administrative agency exercises its quasi- COMPANIA GENERAL DE TABACOS DE FILIPINAS is a foreign
judicial or adjudicatory function. The objective of the doctrine of corporation organized under the laws of Spain and engaged in
primary jurisdiction is to guide a court in determining whether it business in the Philippine Islands as a common carrier of
should refrain from exercising its jurisdiction until after an passengers and merchandise by water: On June 7, 1915, the Board
administrative agency has determined some question or some of Public Utility Commissioners issued and caused to be served an
aspect of some question arising in the proceeding before the court. order to show cause why they should not be required to present
detailed annual reports respecting its finances and operations
However, where what is assailed is the validity or constitutionality respecting the vessels owned and operated by it, in the form and
of a rule or regulation issued by the administrative agency in the containing the matters indicated by the model attached to the
performance of its quasi-legislative function, the regular courts petition.
have jurisdiction to pass upon the same. The determination of
whether a specific rule or set of rules issued by an administrative They are ordered to present annually on or before March first of
agency contravenes the law or the constitution is within the each year a detailed report of finances and operations of such
jurisdiction of the regular courts. vessels as are operated by it as a common carrier within the
Philippine Islands, in the form and containing the matters indicated
3RD ISSSUE In the case at bar, the issuance by the NTC of in the model of annual report which accompanied the order to show
Memorandum Circular No. 13-6-2000 and its Memorandum dated cause herein.
October 6, 2000 was pursuant to its quasi-legislative or rule-making
power. As such, petitioners were justified in invoking the judicial COMPANIA GENERAL DE TABACOS DE FILIPINAS denied the
power of the Regional Trial Court to assail the constitutionality and authority of the board to require the report asked for on the ground
validity of the said issuances. Hence, the Regional Trial Court has that the provision of Act No. 2307 relied on by said board as
jurisdiction to hear and decide the case. The Court of Appeals erred authority for such requirement was, if construed as conferring such
in setting aside the orders of the trial court and in dismissing the power, invalid as constituting an unlawful attempt on the part of
case. the Legislature to delegate legislative power to the board. It is
cumbersome and unnecessarily prolix and that the preparation of
WHEREFORE, in view of the foregoing, the consolidated petitions the same would entail an immense amount of clerical work."
are GRANTED. The decision of the Court of Appeals is REVERSED
and SET ASIDE. Issue:
Principle Involved: Doctrine of Administrative Exhaustion 1. Whether or not it is constitutional to require COMPANIA GENERAL
DE TABACOS DE FILIPINAS to pass a detailed report to the Board of
B. Delegation of Legislative Power Public Utility Commissioners of the Philippine Islands.
2. Whether the power to require the detailed report is strictly
1. COMPANIA GENERAL DE TABACOS DE FILIPINAS vs. THE legislative, or administrative, or merely relates to the execution of
BOARD OF PUBLIC UTILITY COMMISSIONERS, G.R. No. L- the law.
11216, March 6, 1916
Ruling:
Parties:
Petitioner: COMPANIA GENERAL DE TABACOS DE FILIPINAS The section of Act No. 2307 under which the Board of Public Utility
Respondent: THE BOARD OF PUBLIC UTILITY Commissioners relies for its authority, so far as pertinent to the
COMMISSIONERS case at hand, reads as follows:
Sec. 16. The Board shall have power, after hearing, upon detail what those reports shall contain. In other words, Congress
notice, by order in writing, to require every public utility as has laid down general rules for the guidance of the Commission,
herein defined: (e) To furnish annually a detailed report of leaving to it merely the carrying out of details in the exercise of the
finances and operations, in such form and containing such power so conferred. This, we think, is not a delegation of legislative
matters as the Board may from time to time by order authority.
prescribe.
In the case at bar the provision complained of does not law "down
The statute which authorizes a Board of Public Utility the general rules of action under which the commission shall
Commissioners to require detailed reports from public utilities, proceed." nor does it itself prescribe in detail what those reports
leaving the nature of the report, the contents thereof, the general shall contain. Practically everything is left to the judgment and
lines which it shall follow, the principle upon which it shall proceed, discretion of the Board of Public Utility Commissioners, which is
indeed, all other matters whatsoever, to the exclusive discretion of unrestrained as to when it shall act, why it shall act, how it shall
the board, is not expressing its own will or the will of the State with act, to what extent it shall act, or what it shall act upon.
respect to the public utilities to which it refers.
The Legislature, by the provision in question, has abdicated its
Such a provision does not declare, or set out, or indicate what powers and functions in favor of the Board of Public Utility
information the State requires, what is valuable to it, what it needs Commissioners with respect to the matters therein referred to, and
in order to impose correct and just taxation, supervision or control, that such Act is in violation of the Act of Congress of July 1, 1902.
or the facts which the State must have in order to deal justly and The Legislature, by the provision referred to, has not asked for the
equitably with such public utilities and to require them to deal justly information which the State wants but has authorized and board to
and equitably with the State. The Legislature seems simply to have obtain the information which the board wants.
authorized the Board of Public Utility Commissioners to require
what information the board wants. It would seem that the The order appealed from is set aside and the cause is returned to
Legislature, by the provision in question, delegated to the Board of the Board of Public Utility Commissioners with instructions to
Public Utility Commissioners all of its powers over a given subject- dismiss the proceeding.
matter in a manner almost absolute, and without laying down a
rule or even making a suggestion by which that power is to be 2. THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG
directed, guided or applied. & SHANGHAI BANKING CORPORATION vs. JOSE O. VERA,
Judge of the Court of First Instance of Manila, and MARIANO
The true distinction is between the delegation of power to make the CU UNJIENG, G.R. No. L-45685, November 16, 1937
law, which necessarily involves a discretion as to what shall be, and
conferring authority or discretion as to its execution, to be Parties:
exercised under and in pursuance of the law. The first cannot be Petitioners: THE PEOPLE OF THE PHILIPPINE ISLANDS and
done; to the latter no valid objection can be made. HONGKONG & SHANGHAI BANKING CORPORATION
Respondents: JOSE O. VERA, Judge of the Court of First
The Supreme Court held that there was no delegation of legislative Instance of Manila, and MARIANO CU UNJIENG
power, it said:
The Congress may not delegate its purely legislative powers to a Ponente: LAUREL, J.
commission, but, having laid down the general rules of action under
which a commission shall proceed, it may require of that Facts:
commission the application of such rules to particular situations
and the investigation of facts, with a view to making orders in a Cu Unjieng was convicted by the trial court in Manila. He filed for
particular matter within the rules laid down by the Congress. reconsideration which was elevated to the SC and the SC remanded
the appeal to the lower court for a new trial. While awaiting new
In section 20 (of the Commerce Act), Congress has authorized the trial, he appealed for probation alleging that the he is innocent of
commission to require annual reports. The act itself prescribes in the crime he was convicted of. Judge Tuason of the Manila CFI
directed the appeal to the Insular Probation Office. The IPO denied BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, G.R.
the application. However, Judge Vera upon another request by No. 74457, March 20, 1987
petitioner allowed the petition to be set for hearing. The City
Prosecutor countered alleging that Vera has no power to place Cu Parties:
Unjieng under probation because it is in violation of Sec. 11 Act No. Petitioner: Restituto Ynot
4221 which provides that the act of Legislature granting provincial Respondents: INTERMEDIATE APPELLATE COURT, THE
boards the power to provide a system of probation to convicted STATION COMMANDER, INTEGRATED NATIONAL POLICE,
person. Nowhere in the law is stated that the law is applicable to a BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR,
city like Manila because it is only indicated therein that only BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY
provinces are covered. And even if Manila is covered by the law it is
unconstitutional because Sec 1 Art 3 of the Constitution provides Ponente: CRUZ, J.
equal protection of laws. The said law provides absolute discretion
to provincial boards and this also constitutes undue delegation of Facts:
power. Further, the said probation law may be an encroachment of
the power of the executive to provide pardon because providing In 1980, President Ferdinand Marcos issued Executive Order No.
probation, in effect, is granting freedom, as in pardon. 626-A prohibiting the transportation and slaughtering of carabaos.
Issue: Ynot transported six carabaos in a pump boat from Masbate to Iloilo
on January 13, 1984, when they were confiscated by the police
Whether or not there is undue delegation of power. station commander of Barotac Nuevo, Iloilo, for violation of the
above measure. The petitioner sued for recovery, and the Regional
Ruling: 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 act of granting probation is not the same as pardon. In fact it is the case, the court sustained the confiscation of the carabaos and,
limited and is in a way an imposition of penalty. There is undue since they could no longer be produced, ordered the confiscation of
delegation of power because there is no set standard provided by the bond. The court also declined to rule on the constitutionality of
Congress on how provincial boards must act in carrying out a the executive order, as raise by the petitioner, for lack of authority
system of probation. The provincial boards are given absolute and also for its presumed validity. Ynot appealed to the IAC which
discretion which is violative of the constitution and the doctrine of upheld the decision of the RTC. Ynot appealed to the SC with the
the non delegability of power. Further, it is a violation of equity so following contentions:
protected by the constitution. The challenged section of Act No.
4221 in section 11 which reads as follows: This Act shall apply only 1. EO 626-A is unconstitutional as it authorizes outright confiscation
in those provinces in which the respective provincial boards have of the carabao or carabeef being transported across provincial
provided for the salary of a probation officer at rates not lower than boundaries;
those now provided for provincial fiscals. Said probation officer shall 2. Penalty is invalid because it is imposed without according the
be appointed by the Secretary of Justice and shall be subject to the owner a right to be heard before a competent and impartial court
direction of the Probation Office. This only means that only guaranteed by due process;
provinces that can provide appropriation for a probation officer may 3. The measure should not have been presumed and so sustained,
have a system of probation within their locality. This would mean to as constitutional;
say that convicts in provinces where no probation officer is 4. There is an improper exercise of legislative power.
instituted may not avail of their right to probation.
Issue:
3. RESTITUTO YNOT vs. INTERMEDIATE APPELLATE COURT,
THE STATION COMMANDER, INTEGRATED NATIONAL POLICE, Whether or not E.O. 626-A is unconstitutional.
BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR,
Ruling:
there. As for the carabeef, the prohibition is made to apply to it as
Yes. The challenged measure is an invalid exercise of the police otherwise, so says executive order, it could be easily circumvented
power because the method employed to conserve the carabaos is by simply killing the animal. Perhaps so. However, if the movement
not reasonably necessary to the purpose of the law and, worse, is of the live animals for the purpose of preventing their slaughter
unduly oppressive. Due process is violated because the owner of cannot be prohibited, it should follow that there is no reason either
the property confiscated is denied the right to be heard in his to prohibit their transfer as, not to be flippant dead meat.
defense and is immediately condemned and punished. The
conferment on the administrative authorities of the power to Due process: The executive order defined the prohibition,
adjudge the guilt of the supposed offender is a clear encroachment convicted the petitioner and immediately imposed punishment,
on judicial functions and militates against the doctrine of which was carried out forthright. The measure struck at once and
separation of powers. There is, finally, also an invalid delegation of pounced upon the petitioner without giving him a chance to be
legislative powers to the officers mentioned therein who are heard, thus denying him the centuries-old guaranty of elementary
granted unlimited discretion in the distribution of the properties fair play. It has already been remarked that there are occasions
arbitrarily taken. when notice and hearing may be validly dispensed with
notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action
may be validly taken in administrative proceedings as procedural
due process is not necessarily judicial only. In the exceptional cases
Principles: accepted, however. there is a justification for the omission of the
right to a previous hearing, to wit, the immediacy of the problem
Police power: To justify the State in thus interposing its authority sought to be corrected and the urgency of the need to correct it.
in behalf of the public, it must appear, first, that the interests of the
public generally, as distinguished from those of a particular class, In the case before us, there was no such pressure of time or action
require such interference; and second, that the means are calling for the petitioner's peremptory treatment. The properties
reasonably necessary for the accomplishment of the purpose, and involved were not even inimical per se as to require their instant
not unduly oppressive upon individuals. destruction. There certainly was no reason why the offense
prohibited by the executive order should not have been proved first
But while conceding that the amendatory measure has the same in a court of justice, with the accused being accorded all the rights
lawful subject as the original executive order, we cannot say with safeguarded to him under the Constitution
equal certainty that it complies with the second requirement, viz.,
that there be a lawful method. We note that to strengthen the Encroachment of judicial functions: Executive Order No. 626-A
original measure, Executive Order No. 626-A imposes an absolute is penal in nature, the violation thereof should have been
ban not on the slaughter of the carabaos but on their movement, pronounced not by the police only but by a court of justice, which
providing that "no carabao regardless of age, sex, physical alone would have had the authority to impose the prescribed
condition or purpose (sic) and no carabeef shall be transported penalty, and only after trial and conviction of the accused.
from one province to another." The object of the prohibition
escapes us. The reasonable connection between the means Invalid delegation of legislative power: We also mark, on top
employed and the purpose sought to be achieved by the of all this, the questionable manner of the disposition of the
questioned measure is missing. confiscated property as prescribed in the questioned executive
order. It is there authorized that the seized property shall "be
We do not see how the prohibition of the inter-provincial transport distributed to charitable institutions and other similar
of carabaos can prevent their indiscriminate slaughter, considering institutions as the Chairman of the National Meat
that they can be killed anywhere, with no less difficulty in one Inspection Commission may see fit, in the case of carabeef,
province than in another. Obviously, retaining the carabaos in one and to deserving farmers through dispersal as the Director
province will not prevent their slaughter there, any more than of Animal Industry may see fit, in the case of carabaos." The
moving them to another province will make it easier to kill them phrase "may see fit" is an extremely generous and dangerous
condition, if condition it is. It is laden with perilous opportunities for units of municipalities? The Auditor General countered that only
partiality and abuse, and even corruption. One searches in vain for barrios are barred from being created by the President.
the usual standard and the reasonable guidelines, or better still, Municipalities are exempt from the bar and that t a municipality
the limitations that the said officers must observe when they make can be created without creating barrios. Existing barrios can just be
their distribution. There is none. Their options are apparently placed into the new municipality. This theory overlooks, however,
boundless. Who shall be the fortunate beneficiaries of their the main import of Pelaez argument, which is that the statutory
generosity and by what criteria shall they be chosen? Only the denial of the presidential authority to create a new barrio implies a
officers named can supply the answer, they and they alone may negation of the bigger power to create municipalities, each of
choose the grantee as they see fit, and in their own exclusive which consists of several barrios.
discretion. Definitely, there is here a "roving commission," a wide
and sweeping authority that is not "canalized within banks that Issue:
keep it from overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers. Whether or not Congress has delegated the power to create barrios
to the President by virtue of Sec 68 of the RAC.
4. EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No.
L-23825, December 24, 1965 Ruling:
6. ROMEO F. EDU, in his capacity as Land Transportation Non compliance with the requirements contained in this
Commissioner vs. HON. VICENTE G. ERICTA in his capacity Order shall be sufficient cause to refuse registration of the
as Judge of the Court of First Instance of Rizal, Br. XVIII, motor vehicle affected and if already registered, its
Quezon City, and TEDDY C. GALO, G.R. No. L-32096, October registration maybe suspended in pursuance of the
24, 1970 provisions of Section 16 or RA 4136; Provided, however, that
in the case of the violation of Section 1(a) and (b) and
Parties: paragraph (8) Section 3 hereof, a fine of not less than ten
Petitioner: ROMEO F. EDU, in his capacity as Land nor more than fifty pesos shall be imposed. It is not be lost
Transportation Commissioner sight of that under Republic Act no. 4136, of which the
Respondents: HON. VICENTE G. ERICTA in his capacity as Reflector Law is an amendment, petitioner, as the Land
Judge of the Court of First Instance of Rizal, Br. XVIII, Quezon Transportation Commissioner, may, with the approval of the
City, and TEDDY C. GALO Secretary of Public Works and Communication, issue rules
and regulations for its implementation for as long as they do
Ponente: FERNANDO, J. not conflict with its provision. It is likewise an express
provision of the above statute that for a violation of any of
Facts: its provisions or regulations promulgated pursuant thereto a
fine of not less than P10 nor less than P50 could be
Petitioner Romeo Edu, the Land Transportation Commissioner imposed.
issued Administrative Order No. 2, which took effect on April 17,
1990, which provides as follows: Respondent Galo on his behalf and that of other motorist filed on
May 20, 1970 a suit for certiorari and prohibition with preliminary
No motor vehicles of whatever style, kind, make, class or injunction assailing the validity of the challenged Act as an invalid
denomination shall be registered if not equipped with exercise of the police power, for being violative of the due process
reflectors. Such reflectors shall either be factory built-in- clause. This he followed on May 28, 1970 with a manifestation
reflector commercial glass reflectors, reflection tape or wherein he sought as an alternative remedy that, in the event that
luminous paint. The luminosity shall have an intensity to be respondent Judge Ericta would hold said statute constitutional,
maintained visible and clean at all times such that if struck Administrative Order No. 2 of the Land Transportation
by a beam of light shall be visible 100 meters away at Commissioner, now petitioner, implementing such legislation be
night. Then came a section on dimensions, placement and nullified as an undue exercise of legislative power. There was a
color. As to dimensions the following is provided for: Glass hearing on the plea for the issuance of writ of preliminary injunction
reflectors- not less than 3 inches in diameter or not less held on May 27, 1970 where both parties were duly represented,
than 3 inches square; Reflectorized tape- at least 3 inches but no evidence was presented. The next day, on May 28, 1970,
wide and 12 inches long. The painted or taped area may be respondent Judge ordered the issuance of preliminary injunction
bigger at the discretion of the vehicle owner. Provision is directed against the enforcement of such administrative order.
then made as to how such reflectors are to be placed,
installed, pasted or painted. There is the further Issue:
requirement that in addition to such reflectors there shall be
installed, pasted or painted four reflectors on each side of
the motor vehicle parallel to those installed, pasted or
WON there has been undue delegation of legislative power which but in practically all modern governments." 44 He continued:
as a result of such Administrative Order issued in furtherance of the "Accordingly, with the growing complexity of modern life, the
delegated power is null and void. multiplication of the subjects of governmental regulation, and the
increased difficulty of administering the laws, there is a constantly
Ruling: growing tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the
It is a fundamental principle flowing from the doctrine of separation courts." 45 Consistency with the conceptual approach requires the
of powers that Congress may not delegate its legislative power to reminder that what is delegated is authority non-legislative in
the two other branches of government, subject to the exception character, the completeness of the statute when it leaves the
that local governments may over local affairs participate in its hands of Congress being assumed
exercise. What cannot be delegated is the authority under the WHEREFORE, the writs of certiorari and prohibition prayed for are
Constitution to make laws and to alter and repeal them; the test is granted, the orders of May 28, 1970 of respondent Judge for the
the completeness of the statute in all its terms and provisions when issuance of a writ of preliminary injunction, the writ of preliminary
it leaves the hands of the legislature. To determine whether or not injunction of June 1, 1970 and his order of June 9, 1970 denying
there is an undue delegation of legislative power the inquiry must reconsideration are annulled and set aside. Respondent Judge is
be directed to the scope and definiteness of the measure enacted. likewise directed to dismiss the petition for certiorari and
The legislature does not abdicate its functions when it describes prohibition filed by respondent Teddy C. Galo, there being no cause
what job must be done, who is to do it, and what is the scope of his of action as the Reflector Law and Administrative Order No. 2 of
authority. For a complex economy, that may indeed be the only petitioner have not been shown to be tainted by invalidity. Without
way in which the legislative process can go forward. A distinction pronouncement as to costs.
has rightfully been made between delegation of power to make the
laws which necessarily involves a discretion as to what it shall be, 7. RODOLFO S. BELTRAN, doing business under the name
which constitutionally may not be done, and delegation of authority and style, OUR LADY OF FATIMA BLOOD BANK, FELY G.
or discretion as to its execution to exercised under and in MOSALE, doing business under the name and style,
pursuance of the law, to which no valid objection call be made. The MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK,
Constitution is thus not to be regarded as denying the legislature INC.; MARIA VICTORIA T. VITO, M.D., doing business under
the necessary resources of flexibility and practicability. the name and style, AVENUE BLOOD BANK; JESUS M.
GARCIA, M.D., doing business under the name and style,
To avoid the taint of unlawful delegation, there must be a standard, HOLY REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing
which implies at the very least that the legislature itself determines business under the name and style, BLUE CROSS BLOOD
matters of principle and lay down fundamental policy. Otherwise, TRANSFUSION SERVICES; EDGARDO R. RODAS, M.D., doing
the charge of complete abdication may be hard to repel. A standard business under the name and style, RECORD BLOOD BANK,
thus defines legislative policy, marks its limits, its maps out its in their individual capacities and for and in behalf of
boundaries and specifies the public agency to apply it. It indicates PHILIPPINE ASSOCIATION OF BLOOD BANKS vs. THE
the circumstances under which the legislative command is to be SECRETARY OF HEALTH, G.R. No. 133640, November 25,
effected. It is the criterion by which legislative purpose may be 2005
carried out. Thereafter, the executive or administrative office
designated may in pursuance of the above guidelines promulgate Parties:
supplemental rules and regulations. Petitioners: RODOLFO S. BELTRAN, FELY G. MOSALE,
PEOPLES BLOOD BANK, INC., MARIA VICTORIA T. VITO, M.D.,
This is to adhere to the recognition given expression by Justice JESUS M. GARCIA, M.D., ALBERT L. LAPITAN, EDGARDO R.
Laurel in a decision announced not long after the Constitution came RODAS, M.D.,
into force and effect that the principle of non-delegation "has been Respondent: THE SECRETARY OF HEALTH
made to adapt itself the complexities of modern governments,
giving rise to the adoption, within certain limits, of the principle of Ponente: AZCUNA, J.
"subordinate legislation" not only in the United States and England
Facts: We deem the classification to be valid and reasonable for the
following:
In January of 1994, the New Tropical Medicine Foundation, with the
assistance of the U.S. Agency for International Development One, it was based on substantial distinctions. The former operates
(USAID) released its final report of a study on the Philippine blood for purely humanitarian reasons and as a medical service while the
banking system entitled Project to Evaluate the Safety of the latter is motivated by profit. Also, while the former wholly
Philippine Blood Banking System. It was revealed that of the blood encourages voluntary blood donation, the latter treats blood as sale
units collected in 1992, 64.4% were supplied by commercial blood of commodity.
banks, 14.5% by the PNRC, 13.7% by government hospital-based
blood banks, and 7.4% by private hospital-based blood banks; Two, the classification, and the consequent phase out of
showing that the Philippines heavily relied on commercial sources commercial blood banks is germane to the purpose of the law, that
of blood. It was further found, among other things, that blood sold is, to provide the nation with an adequate supply of safe blood by
by persons to blood commercial banks are three times more likely promoting voluntary blood donation and treating blood transfusion
to have any of the four (4) tested infections or blood transfusion as a humanitarian or medical service rather than a commodity.
transmissible diseases, namely, malaria, syphilis, Hepatitis B and This necessarily involves the phase out of commercial blood banks
Acquired Immune Deficiency Syndrome(AIDS) than those donated based on the fact that they operate as a business enterprise, and
to PNRC. they source their blood supply from paid blood donors who are
considered unsafe compared to voluntary blood donors as shown
Republic Act No. 7719 or the National Blood Services Act of 1994 by USAID-sponsored study on the Philippine blood banking system.
was then enacted into law on April 2, 1994. The Act seeks to
provide an adequate supply of safe blood by promoting voluntary Three, the legislature intended for the general application of the
blood donation and by regulating blood banks in the country. One law. Its enactment was not solely to address the peculiar
of the provisions of the said act was the phasing out of commercial circumstances of the situation nor was it intended to apply only to
blood banks within 2 years from its effectivity. the existing conditions.
Petitioners, comprising the majority of the Board of Directors of the Lastly, the law applies equally to all commercial blood banks
Philippine Association of Blood Banks assail the constitutionality of without exception.
RA 7719 on the ground among others that it violates the equal
protection clause for irrationally discriminating against free 8. SERGIO I. CARBONILLA, EMILIO Y. LEGASPI IV, and
standing blood banks in a manner which is not germane to the ADONAIS Y. REJUSO vs. BOARD OF AIRLINES
purpose of the law. REPRESENTATIVES (MEMBER AIRLINES: ASIANA AIRLINES,
Issue: CATHAY PACIFIC AIRWAYS, CHINA AIRLINES, CEBU PACIFIC
AIRLINES, CHINA SOUTHERN AIRLINES, CONTINENTAL
WON R.A. 7719 violates the petitioners right to equal protection of MICRONESIA AIRLINES, EMIRATES, ETIHAD AIRWAYS, EVA
the law. AIR AIRWAYS, FEDERAL EXPRESS CORPORATION, GULF AIR,
JAPAN AIRLINES, AIR FRANCE-KLM ROYAL DUTCH AIRLINES,
Ruling: KOREAN AIR, KUWAIT AIRWAYS CORPORATION, LUFTHANSA
GERMAN AIRLINES, MALAYSIA AIRLINES, NORTHWEST
No. Class legislation, discriminating against some and favoring AIRLINES, PHILIPPINE AIRLINES, INC., QANTAS AIRWAYS,
others is prohibited but classification on a reasonable basis and not LTD., QATAR AIRLINES, ROYAL BRUNEI AIRLINES, SINGAPORE
made arbitrarily or capriciously is permitted. The classification, AIRLINES, SWISS INTERNATIONAL AIRLINES, LTD., SAUDI
however, to be reasonable: a) must be based on substantial ARABIAN AIRLINES, and THAI INTERNATIONAL AIRWAYS,
distinctions which make real differences; b) must be germane to G.R. No. 193247, September 14, 2011
the purpose of the law; c) must not be limited to existing conditions
only; and d) must apply equally to each member of the class. Parties:
Petitioners: SERGIO I. CARBONILLA, EMILIO Y. LEGASPI IV, 1-2005. In a letter dated 3 March 2005, the Acting District Collector
and ADONAIS Y. REJUSO of BOC informed BAR that the Secretary of Finance already
Respondents: BOARD OF AIRLINES REPRESENTATIVES approved CAO 1-2005 on 9 February 2005. As such, the increase in
(MEMBER AIRLINES: ASIANA AIRLINES, CATHAY PACIFIC the overtime rates became effective on 16 March 2005. BAR still
AIRWAYS, CHINA AIRLINES, CEBU PACIFIC AIRLINES, CHINA requested for an audience with the Secretary of Finance which was
SOUTHERN AIRLINES, CONTINENTAL MICRONESIA AIRLINES, granted on 12 October 2005. The BOC then sent a letter to BARs
EMIRATES, ETIHAD AIRWAYS, EVA AIR AIRWAYS, FEDERAL member airlines demanding payment of overtime services to BOC
EXPRESS CORPORATION, GULF AIR, JAPAN AIRLINES, AIR personnel in compliance with CAO 1-2005. The BARs member
FRANCE-KLM ROYAL DUTCH AIRLINES, KOREAN AIR, KUWAIT airlines refused and manifested their intention to file a petition with
AIRWAYS CORPORATION, LUFTHANSA GERMAN AIRLINES, the Commissioner of Customs and/or the Secretary of Finance to
MALAYSIA AIRLINES, NORTHWEST AIRLINES, PHILIPPINE suspend the implementation of CAO 1-2005. In a letter dated 31
AIRLINES, INC., QANTAS AIRWAYS, LTD., QATAR AIRLINES, August 2006, Undersecretary Gaudencio A. Mendoza, Jr. (Usec.
ROYAL BRUNEI AIRLINES, SINGAPORE AIRLINES, SWISS Mendoza), Legal and Revenue Operations Group, Department of
INTERNATIONAL AIRLINES, LTD., SAUDI ARABIAN AIRLINES, Finance informed BAR, through its Chairman Felix J. Cruz (Cruz),
and THAI INTERNATIONAL AIRWAYS that they find no valid ground to disturb the validity of CAO 1-
2005, much less to suspend its implementation or effectivity and
Ponente: CARPIO, J. that its implementation effective 16 March 2005 is legally proper. In
separate letters both dated 4 December 2006, Cruz requested the
Facts: Office of the President and the Office of the Executive Secretary to
review the decision of Usec. Mendoza. Cruz manifested the
The Bureau of Customs issued Customs Administrative Order No. 1- objection of the International Airlines operating in the Philippines to
2005 (CAO 1-2005) amending CAO 7-92.6 The Department of CAO 1-2005. On 13 December 2006, Deputy Executive Secretary
Finance approved CAO 1-2005 on 9 February 2006. CAO 7-92 and Manuel B. Gaite (Deputy Exec. Sec. Gaite) issued an Order requiring
CAO 1-2005 were promulgated pursuant to Section 3506 in relation BAR to pay its appeal fee and submit an appeal memorandum
to Section 608 of the Tariff and Customs Code of the Philippines within 15 days from notice. BAR paid the appeal fee and submitted
(TCCP)Petitioners Office of the President, et al. alleged that prior to its appeal memorandum on 19 January 2007. The Court of Appeals
the amendment of CAO 7-92, the BOC created on 23 April 2002 a ruled that Section 8, Article IX(B) of the Constitution prohibits an
committee to review the overtime pay of Customs personnel in appointive public officer or employee from receiving additional,
Ninoy Aquino International Airport (NAIA) and to propose its double or indirect compensation, unless specifically authorized by
adjustment from the exchange rate of P25 to US$1 to the then law. The Court of Appeals ruled that Section 3506 of the TCCP only
exchange rate of P55 to US$1. The Office of the President, et al. authorized payment of additional compensation for overtime work,
alleged that for a period of more than two years from the creation and thus, the payment of traveling and meal allowances under CAO
of the committee, several meetings were conducted with the 7-92 and CAO 1-2005 are unconstitutional and could not be
agencies concerned, including respondent Board of Airlines enforced against BAR members.
Representatives (BAR), to discuss the proposed rate adjustment
that would be embodied in an Amendatory Customs Administrative Issue:
Order. On the other hand, BAR alleged that it learned of the
proposed increase in the overtime rates only sometime in 2004 and Whether the Court of Appeals committed a reversible error in
only through unofficial reports. declaring Section 3506 of the TCCP, CAO 7-92, and CAO 1-2005
unenforceable against BAR.
On 23 August 2004, BAR wrote a letter addressed to Edgardo L. De
Leon, Chief, Bonded Warehouse Division, BOC-NAIA, informing the Ruling:
latter of its objection to the proposed increase in the overtime
rates. BAR further requested for a meeting to discuss the matter. BARs argument has no merit.
BAR wrote the Secretary of Finance on 31 January 2005 and 21
February 2005 reiterating its concerns against the issuance of CAO
We do not agree with the Court of Appeals in excluding airline customs employees to do overtime work; the Commissioner of
companies, aircraft owners, and operators from the coverage of Customs fixes the rates; and it provides that the payments shall be
Section 3506 of the TCCP. The term other persons served refers to made by the importers, shippers or other persons served. Section
all other persons served by the BOC employees. Airline companies, 3506 also fixed the standard to be followed by the Commissioner of
aircraft owners, and operators are among other persons served by Customs when it provides that the rates shall not be less than that
the BOC employees. As pointed out by the OSG, the processing of prescribed by law to be paid to employees of private enterprise.
embarking and disembarking from aircrafts of passengers, as well Contrary to the ruling of the Court of Appeals, BOC employees
as their baggages and cargoes, forms part of the BOC functions. rendering overtime services are not receiving double compensation
BOC employees who serve beyond the regular office hours are for the overtime pay, travel and meal allowances provided for
entitled to overtime pay for the services they render. The Court of under CAO 7-92 and CAO 1-2005. Section 3506 provides that the
Appeals ruled that, applying the principle of ejusdem generis, rates shall not be less than that prescribed by law to be paid to
airline companies, aircraft owners, and operators are not in the employees of private enterprise. The overtime pay, travel and meal
same category as importers and shippers because an importer allowances are payment for additional work rendered after regular
brings goods to the country from a foreign country and pays office hours and do not constitute double compensation prohibited
custom duties while a shipper is one who ships goods to another; under Section 8, Article IX(B) of the 1987 Constitution as they are in
one who engages the services of a carrier of goods; one who fact authorized by law or Section 3506 of the TCCP. BAR raises the
tenders goods to a carrier for transportation. However, airline alleged failure of BOC to publish the required notice of public
passengers pass through the BOC to declare whether they are hearing and to conduct public hearings to give all parties the
bringing goods that need to be taxed. The passengers cannot leave opportunity to be heard prior to the issuance of CAO 1-2005 as
the airport of entry without going through the BOC. Clearly, airline required under Section 9(2), Chapter I, Book VII of the
companies, aircraft owners, and operators are among the persons Administrative Code of the Philippines. Section 9(2) provides:
served by the BOC under Section 3506 of the TCCP. The overtime
pay of BOC employees may be paid by any of the following: (1) all Sec. 9. Public Participation. - (1) If not otherwise required by law, an
the taxpayers in the country; (2) the airline passengers; and (3) the agency shall, as far as practicable, publish or circulate notices of
airline companies which are expected to pass on the overtime pay proposed rules and afford interested parties the opportunity to
to passengers. If the overtime pay is taken from all taxpayers, even submit their views prior to the adoption of any rule. (2) In the fixing
those who do not travel abroad will shoulder the payment of the of rates, no rule or final order shall be valid unless the proposed
overtime pay. If the overtime pay is taken directly from the rates shall have been published in a newspaper of general
passengers or from the airline companies, only those who benefit circulation at least 2 weeks before the first hearing thereon.(3) In
from the overtime services will pay for the services rendered. Here, cases of opposition, the rules on contested cases shall be observed.
Congress deemed it proper that the payment of overtime services
shall be shouldered by the other persons served by the BOC, that The BOC created a committee to re-evaluate the proposed increase
is, the airline companies. This is a policy decision on the part of in the rate of overtime pay and for two years, several meetings
Congress that is within its discretion to determine. Such were conducted with the agencies concerned to discuss the
determination by Congress is not subject to judicial review. We do proposal. BAR and the Airline Operators Council participated in
not agree with the Court of Appeals that Section 3506 of the TCCP these meetings and discussions.
failed the completeness and sufficient standard tests. Under the
first test, the law must be complete in all its terms and conditions Hence, BAR cannot claim that it was denied due process in the
when it leaves the legislature such that when it reaches the imposition of the increase of the overtime rate. CAO 1-2005 was
delegate, the only thing he will have to do is to enforce it. The published in the Manila Standard, a newspaper of general
second test requires adequate guidelines or limitations in the law to circulation in the Philippines on 18 February 2005 and while it was
determine the boundaries of the delegates authority and prevent supposed to take effect on 5 March 2005, or 15 days after its
the delegation from running riot. Contrary to the ruling of the Court publication, the BOC-NAIA still deferred BARs compliance until 16
of Appeals, Section 3506 of the TCCP complied with these March 2005.
requirements. The law is complete in itself that it leaves nothing
more for the BOC to do: it gives authority to the Collector to assign
WHEREFORE, we DENY the petition in G.R. No. 193247. We GRANT P1,139,041.49 it had paid as "contractors percentage tax" and
the petition in G.R. No. 194276 and SET ASIDE the 9 July 2009 P361,924.44 it should have paid for "gross receipts tax."
Decision and 26 October 2010 Resolution of the Court of Appeals in
CA-G.R. SP No. 103250. Petitioner Bureau of Customs is DIRECTED The CTA dismissed the petition and denied BLCs claim of refund
to implement CAO 1-2005 immediately. and held that RR 19-86, may only be applied prospectively such
that it only covers all leases written on or after January 1, 1987.
C. Kinds of Administrative Rules and Regulations The CTA ruled that, since BLCs rental income was all received prior
to 1986, it follows that this was derived from lease transactions
1. BPI LEASING CORPORATION vs. THE HONORABLE COURT prior to January 1, 1987, and hence, not covered by the RR.
OF APPEALS, COURT OF TAX APPEAL AND COMMISSIONER
OF INTERNAL REVENUE, G.R. No. 127624, November 18, A motion for reconsideration of the CTAs decision was filed, but
2003 was denied. BLC then appealed the case to the Court of Appeals.
BLC submits that the Court of Appeals and the CTA erred in not
Parties: ruling that RR 19-86 may be applied retroactively so as to allow
Petitioner: BPI LEASING CORPORATION BLCs claim for a refund of P777,117.05.
Respondents: THE HONORABLE COURT OF APPEALS,
COURT OF TAX APPEAL AND COMMISSIONER OF INTERNAL Respondents, on the other hand, maintain that the provision on the
REVENUE date of effectivity of RR 19-86 is clear and unequivocal, leaving no
room for interpretation on its prospective application.
Ponente: AZCUNA, J.
Issues:
1. WON RR 19-86 is legislative or interpretative in nature.
2. WON RR 19-86 is prospective or retroactive in nature.
3. WON BPI failed to meet the quantum of evidence required in
Facts: refund cases.
For the calendar year 1986, BPI Leasing Corporation, Inc. (BLC) paid RULE:
the Commissioner of Internal Revenue (CIR) a total of
P1,139,041.49 representing 4% "contractors percentage tax" then 1ST ISSUE BLC attempts to convince the Court that RR 19-86 is
imposed by Section 205 of the National Internal Revenue Code legislative rather than interpretative in character and hence, should
(NIRC), based on its gross rentals from equipment leasing for the retroact to the date of effectivity of the law it seeks to interpret. A
said year amounting to P27,783,725.42. legislative rule is in the matter of subordinate legislation, designed
to implement a primary legislation by providing the details thereof.
On November 10, 1986, the CIR issued RR 19-86. Section 6.2 An interpretative rule, on the other hand, is designed to provide
thereof provided that finance and leasing companies registered guidelines to the law which the administrative agency is in charge
under Republic Act 5980 shall be subject to gross receipt tax of 5%- of enforcing. The Court finds the questioned RR to be legislative in
3%-1% on actual income earned. This means that companies nature. Section 1 of RR 19-86 plainly states that it was promulgated
registered under Republic Act 5980, such as BLC, are not liable for pursuant to Section 277 of the NIRC (now Section 244), an express
"contractors percentage tax" under Section 205 but are, instead, grant of authority to the Secretary of Finance to promulgate all
subject to "gross receipts tax" under Section 260 (now Section 122) needful rules and regulations for the effective enforcement of the
of the NIRC. Since BLC had earlier paid the aforementioned provisions of the NIRC. Verily, it cannot be disputed that RR 19-86
"contractors percentage tax," it re-computed its tax liabilities was issued pursuant to the rule-making power of the Secretary of
under the "gross receipts tax" and arrived at the amount of Finance, thus making it legislative, and not interpretative as alleged
P361,924.44. BLC filed a claim for a refund with the CIR for the by BLC.
amount of P777,117.05, representing the difference between the
BLC further posits that, it is invalid for want of due process as no Respondents: HON. COURT OF APPEALS, HON. COURT OF
prior notice, publication and public hearing attended the issuance TAX APPEALS and FORTUNE TOBACCO CORPORATION
thereof. To support its view, BLC cited CIR v. Fortune Tobacco, et
al., wherein the Court nullified a revenue memorandum circular Ponente: VITUG, J.
which reclassified certain cigarettes and subjected them to a higher
tax rate, holding it invalid for lack of notice, publication and public Facts:
hearing. In this case, RR 19-86 would be beneficial to the taxpayers
as they are subjected to lesser taxes. Petitioner, in fact, is invoking The Commissioner of Internal Revenue ("CIR") disputes the
RR 19-86 as the very basis of its claim for refund. If it were invalid, decision, dated 31 March 1995, of respondent Court of Appeals 1
then petitioner all the more has no right to a refund. affirming the 10th August 1994 decision and the 11th October 1994
resolution of the Court of Tax Appeals 2 ("CTA") in C.T.A. Case No.
2ND ISSUE The Court now resolves whether its application should 5015, entitled "Fortune Tobacco Corporation vs. Liwayway Vinzons-
be prospective or retroactive. Statutes, including administrative Chato in her capacity as Commissioner of Internal Revenue.
rules and regulations, operate prospectively only, unless the Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the
legislative intent to the contrary is manifest by express terms or by manufacture of different brands of cigarettes.
necessary implication. In the present case, there is no indication
that the RR may operate retroactively. Furthermore, there is an On various dates, the Philippine Patent Office issued to the
express provision stating that it "shall take effect on January 1, corporation separate certificates of trademark registration over
1987," and that it "shall be applicable to all leases written on or "Champion," "Hope," and "More" cigarettes. In a letter, dated 06
after the said date." Thus, BLC is not in a position to invoke the January 1987, of then Commissioner of Internal Revenue
provisions of RR 19-86 for lease rentals it received prior to January Bienvenido A. Tan, Jr., to Deputy Minister Ramon Diaz of the
1, 1987. Presidential Commission on Good Government, "the initial position
of the Commission was to classify 'Champion,' 'Hope,' and 'More' as
3RD ISSUE Tax refunds are in the nature of tax exemptions. As foreign brands since they were listed in the World Tobacco Directory
such, these are to be strictly construed against the person or entity as belonging to foreign companies. However, Fortune Tobacco
claiming the exemption. The burden of proof is upon him who changed the names of 'Hope' to 'Hope Luxury' and 'More' to
claims the exemption and he must be able to justify his claim by 'Premium More,' thereby removing the said brands from the foreign
the clearest grant under Constitutional or statutory law, and he brand category. Proof was also submitted to the Bureau (of Internal
cannot be permitted to rely upon vague implications. Nothing that Revenue ['BIR']) that 'Champion' was an original Fortune Tobacco
BLC has raised justifies a tax refund. Corporation register and therefore a local brand.
WHEREFORE, the petition for review is hereby DENIED, and the A bill, which later became Republic Act ("RA") No. 7654, 6 was
assailed decision and resolution of the Court of Appeals enacted, on 10 June 1993, by the legislature and signed into law,
are AFFIRMED. No pronouncement as to costs. SO ORDERED. on 14 June 1993, by the President of the Philippines. The new law
became effective on 03 July 1993. It amended Section 142(c)(1) of
Principles involved: Legislative or Interpretative nature of the National Internal Revenue Code ("NIRC"):
Statute; Prospective or Retroactive effect of Ordinances (1) On locally manufactured cigarettes which are currently
classified and taxed at fifty-five percent (55%) or the exportation of
2. COMMISSIONER OF INTERNAL REVENUE vs. HON. COURT which is not authorized by contract or otherwise, fifty-five (55%)
OF APPEALS, HON. COURT OF TAX APPEALS and FORTUNE provided that the minimum tax shall not be less than Five Pesos
TOBACCO CORPORATION, (Bellosillos Separate Opinion), (P5.00) per pack.
G.R. No. 119761 August 29, 1996 (2) On other locally manufactured cigarettes, forty-five percent
(45%) provided that the minimum tax shall not be less than Three
Parties: Pesos (P3.00) per pack.
Petitioner: COMMISSIONER OF INTERNAL REVENUE
About a month after the enactment and two (2) days before the
effectivity of RA 7654, Revenue Memorandum Circular No. 37-93 CA affirmed CTA decision.
("RMC 37-93"), was issued by the BIR.
Under the foregoing, the test for imposition of the 55% ad valorem Issue:
tax on cigarettes is that the locally manufactured cigarettes bear a
foreign brand regardless of whether or not the right to use or title Whether or not BIR RMC 37-93 is valid.
to the foreign brand was sold or transferred by its owner to the
local manufacturer. The brand must be originally owned by a Ruling:
foreign manufacturer or producer. If ownership of the cigarette
brand is, however, not definitely determinable, ". . . the listing of The Court must sustain both the appellate court and the tax court.
brands manufactured in foreign countries appearing in the current
World Tobacco Directory shall govern. . . ." Petitioner stresses on the wide and ample authority of the BIR in
the issuance of rulings for the effective implementation of the
In view of the foregoing, the aforesaid brands of cigarettes, viz: provisions of the National Internal Revenue Code. Let it be made
"HOPE," "MORE" and "CHAMPION" being manufactured by Fortune clear that such authority of the Commissioner is not here doubted.
Tobacco Corporation are hereby considered locally manufactured Like any other government agency, however, the CIR may not
cigarettes bearing a foreign brand subject to the 55% ad valorem disregard legal requirements or applicable principles in the exercise
tax on cigarettes. of its quasi-legislative powers.
On 02 July 1993, at about 17:50 hours, BIR Deputy Commissioner It should be understandable that when an administrative rule is
Victor A. Deoferio, Jr., sent via telefax a copy of RMC 37-93 to merely interpretative in nature, its applicability needs nothing
Fortune Tobacco but it was addressed to no one in particular. On 15 further than its bare issuance for it gives no real consequence more
July 1993, Fortune Tobacco received, by ordinary mail, a certified than what the law itself has already prescribed. When, upon the
xerox copy of RMC 37-93. other hand, the administrative rule goes beyond merely providing
for the means that can facilitate or render least cumbersome the
In a letter, dated 19 July 1993, addressed to the appellate division implementation of the law but substantially adds to or increases
of the BIR, Fortune Tobacco requested for a review, reconsideration the burden of those governed, it behooves the agency to accord at
and recall of RMC 37-93. The request was denied on 29 July 1993. least to those directly affected a chance to be heard, and thereafter
The following day, or on 30 July 1993, the CIR assessed Fortune to be duly informed, before that new issuance is given the force
Tobacco for ad valorem tax deficiency amounting to P9,598,334.00. and effect of law.
On 10 August 1994, the CTA upheld the position of Fortune Tobacco A reading of RMC 37-93, particularly considering the circumstances
and adjudged: under which it has been issued, convinces us that the circular
cannot be viewed simply as a corrective measure (revoking in the
WHEREFORE, Revenue Memorandum Circular No. 37-93 process the previous holdings of past Commissioners) or merely as
reclassifying the brands of cigarettes, viz: "HOPE," "MORE" and construing Section 142(c)(1) of the NIRC, as amended, but has, in
"CHAMPION" being manufactured by Fortune Tobacco Corporation fact and most importantly, been made in order to place "Hope
as locally manufactured cigarettes bearing a foreign brand subject Luxury," "Premium More" and "Champion" within the classification
to the 55% ad valorem tax on cigarettes is found to be defective, of locally manufactured cigarettes bearing foreign brands and to
invalid and unenforceable, such that when R.A. No. 7654 took effect thereby have them covered by RA 7654. Specifically, the new law
on July 3, 1993, the brands in question were not CURRENTLY would have its amendatory provisions applied to locally
CLASSIFIED AND TAXED at 55% pursuant to Section 1142(c)(1) of manufactured cigarettes which at the time of its effectivity were
the Tax Code, as amended by R.A. No. 7654 and were therefore still not so classified as bearing foreign brands. Prior to the issuance of
classified as other locally manufactured cigarettes and taxed at the questioned circular, "Hope Luxury," "Premium More," and
45% or 20% as the case may be. "Champion" cigarettes were in the category of locally manufactured
cigarettes not bearing foreign brand subject to 45% ad valorem tax. the motor vehicle development program and its implementing
Hence, without RMC 37-93, the enactment of RA 7654, would have guidelines." The challenged provision states:
had no new tax rate consequence on private respondent's
products. Evidently, in order to place "Hope Luxury," "Premium 3.1 The importation into the country, inclusive of the
More," and "Champion"cigarettes within the scope of the Freeport, of all types of used motor vehicles is prohibited,
amendatory law and subject them to an increased tax rate, the now except for the following: (See full text case.)
disputed RMC 37-93 had to be issued. In so doing, the BIR not
simply intrepreted the law; verily, it legislated under its quasi- Consequently, three actions for declaratory relief were filed by
legislative authority. The due observance of the requirements of Southwing Heavy Industries, Inc., Subic Integrated Macro Ventures
notice, of hearing, and of publication should not have been then Corp. and Motor Vehicle Importers Association of Subic Bay
ignored. Freeport, Inc. praying that judgment be rendered declaring Article
2, Section 3.1 of EO 156 unconstitutional and illegal.
D. Requisites for Validity The RTC rendered Summary Judgment declaring that Article 2,
Section 3.1 of EO 156 constitutes unlawful usurpation of legislative
1. HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE power vested by the Constitution with the Congress and that the
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS proviso is contrary to the mandate of Republic Act 7227 or the
(DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT Bases Conversion and Development Act of 1992 which allows the
SECRETARY, LAND TRANSPORTATION OFFICE (LTO), free flow of goods and capital within the Freeport.
COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE, AND
CHIEF OF LTO, SUBIC BAY FREE PORT ZONE vs. SOUTHWING The petitioner appealed in the CA but was denied on the ground of
HEAVY INDUSTRIES, INC., represented by its President JOSE lack of statutory basis for the President to issue the same. It held
T. DIZON, UNITED AUCTIONEERS, INC., represented by its that the prohibition on the importation of use of motor vehicles is
President DOMINIC SYTIN, and MICROVAN, INC., an exercise of police power vested on the legislature and absent
represented by its President MARIANO C. SONON, G.R. No. any enabling law, the exercise thereof by the President through an
164171, February 20, 2006 executive issuance is void.
Parties: Issue:
Petitioners: HON. EXECUTIVE SECRETARY, HON.
SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND WON Article 2, Section 3.1 of EO 156 is a valid exercise of the
COMMUNICATIONS (DOTC), COMMISSIONER OF CUSTOMS, Presidents quasi-legislative power.
ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE
(LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT Ruling:
ZONE, AND CHIEF OF LTO, SUBIC BAY FREE PORT ZONE
Respondents: SOUTHWING HEAVY INDUSTRIES, INC., YES. SC ruled that Police power is inherent in a government to
represented by its President JOSE T. DIZON, UNITED enact laws, within constitutional limits, to promote the order,
AUCTIONEERS, INC., represented by its President DOMINIC safety, health, morals, and general welfare of society. It is lodged
SYTIN, and MICROVAN, INC., represented by its President primarily with the legislature. By virtue of a valid delegation of
MARIANO C. SONON legislative power, it may also be exercised by the President and
administrative boards, as well as the lawmaking bodies on all
Ponente: YNARES-SANTIAGO, J. municipal levels, including the barangay. Such delegation confers
upon the President quasi-legislative power which may be defined as
Facts: the authority delegated by the law-making body to the
administrative body to adopt rules and regulations intended to
On December 12, 2002, President Gloria Macapagal-Arroyo, through carry out the provisions of the law and implement legislative policy.
Executive Secretary Alberto G. Romulo, issued EO 156, entitled
"Providing for a comprehensive industrial policy and directions for
To be valid, an administrative issuance, such as an executive order, is the domestic industry. EO 156, however, exceeded the scope of
must comply with the following requisites: its application by extending the prohibition on the importation of
(1) Its promulgation must be authorized by the legislature; used cars to the Freeport, which RA 7227, considers to some
(2) It must be promulgated in accordance with the prescribed extent, a foreign territory. The domestic industry which the EO
procedure; seeks to protect is actually the "customs territory" which is defined
(3) It must be within the scope of the authority given by the under the Rules and Regulations Implementing RA 7227, as follows:
legislature; and
(4) It must be reasonable. "the portion of the Philippines outside the Subic Bay Freeport where
the Tariff and Customs Code of the Philippines and other national
Contrary to the conclusion of the Court of Appeals, EO 156 actually tariff and customs laws are in force and effect."
satisfied the first requisite of a valid administrative order. It has
both constitutional and statutory bases. The prohibition is an invalid modification of RA 7227. Indeed, when
the application of an administrative issuance modifies existing laws
Anent the second requisite, that is, that the order must be issued or or exceeds the intended scope, as in the instant case, the issuance
promulgated in accordance with the prescribed procedure, it is becomes void, not only for being ultra vires, but also for being
necessary that the nature of the administrative issuance is properly unreasonable.
determined. As in the enactment of laws, the general rule is that,
the promulgation of administrative issuances requires previous This brings us to the fourth requisite. It is an axiom in
notice and hearing, the only exception being where the legislature administrative law that administrative authorities should not act
itself requires it and mandates that the regulation shall be based on arbitrarily and capriciously in the issuance of rules and regulations.
certain facts as determined at an appropriate investigation.23 This To be valid, such rules and regulations must be reasonable and
exception pertains to the issuance of legislative rules as fairly adapted to secure the end in view. If shown to bear no
distinguished from interpretative rules which give no real reasonable relation to the purposes for which they were authorized
consequence more than what the law itself has already to be issued, then they must be held to be invalid.
prescribed;24 and are designed merely to provide guidelines to the
law which the administrative agency is in charge of enforcing.25 A There is no doubt that the issuance of the ban to protect the
legislative rule, on the other hand, is in the nature of subordinate domestic industry is a reasonable exercise of police power. The
legislation, crafted to implement a primary legislation. deterioration of the local motor manufacturing firms due to the
influx of imported used motor vehicles is an urgent national
In the instant case, EO 156 is obviously a legislative rule as it seeks concern that needs to be swiftly addressed by the President. In the
to implement or execute primary legislative enactments intended exercise of delegated police power, the executive can therefore
to protect the domestic industry by imposing a ban on the validly proscribe the importation of these vehicles.
importation of a specified product not previously subject to such
prohibition. The problem, however, lies with respect to the application of the
importation ban to the Freeport. The Court finds no logic in the all
Taking our bearings from the foregoing discussions, we hold that encompassing application of the assailed provision to the Freeport
the importation ban runs afoul the third requisite for a valid which is outside the customs territory. As long as the used motor
administrative order. To be valid, an administrative issuance must vehicles do not enter the customs territory, the injury or harm
not be ultra vires or beyond the limits of the authority conferred. It sought to be prevented or remedied will not arise. The application
must not supplant or modify the Constitution, its enabling statute of the law should be consistent with the purpose of and reason for
and other existing laws, for such is the sole function of the the law. Ratione cessat lex, et cessat lex. When the reason for the
legislature which the other branches of the government cannot law ceases, the law ceases. It is not the letter alone but the spirit of
usurp. the law also that gives it life.
In the instant case, the subject matter of the laws authorizing the In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void
President to regulate or forbid importation of used motor vehicles, insofar as it is made applicable to the presently secured fenced-in
former Subic Naval Base area. Pursuant to the separability clause of
EO 156, Section 3.1 is declared valid insofar as it applies to the Issue:
customs territory or the Philippine territory outside the presently
secured fenced-in former Subic Naval Base area, used motor Whether or not PHILRACOM had unconstitutionally delegated its
vehicles that come into the Philippine territory via the secured rule-making power to PRCI and MJCI in issuing the directive for
fenced-in former Subic Naval Base area may be stored, used or them to come up with club rules.
traded therein, or exported out of the Philippine territory, but they
cannot be imported into the Philippine territory outside of the Ruling:
secured fenced-in former Subic Naval Base area.
No. PETITION is DISMISSED. The court finds no grave abuse of
2. WILLIAM C. DAGAN, CARLOS H. REYES, NARCISO discretion on the part of Philracom in issuing the contested
MORALES, BONIFACIO MANTILLA, CESAR AZURIN, WEITONG guidelines and on the part MJCI and PRCI in complying with
LIM, MA. TERESA TRINIDAD, MA. CARMELITA FLORENTINO Philracoms directive.
vs. PHILIPPINE RACING COMMISSION, MANILA JOCKEY CLUB,
INC., and PHILIPPINE RACING CLUB, INC., G.R. No. 175220, The validity of an administrative issuance, such as the assailed
February 12, 2009 guidelines, hinges on compliance with the following requisites:
1. Its promulgation must be authorized by the legislature;
Parties: 2. It must be promulgated in accordance with the prescribed
Petitioners: WILLIAM C. DAGAN, CARLOS H. REYES, procedure;
NARCISO MORALES, BONIFACIO MANTILLA, CESAR AZURIN, 3. It must be within the scope of the authority given by the
WEITONG LIM, MA. TERESA TRINIDAD, MA. CARMELITA legislature;
FLORENTINO 4. It must be reasonable.
Respondents: PHILIPPINE RACING COMMISSION, MANILA
JOCKEY CLUB, INC., and PHILIPPINE RACING CLUB, INC. All the prescribed requisites are met as regards the questioned
issuances. Philracoms authority is drawn from P.D. No. 420. The
Ponente: TINGA, J. delegation made in the presidential decree is valid. Philracom did
not exceed its authority. And the issuances are fair and reasonable.
Facts:
The rule is that what has been delegated cannot be delegated, or
PHILRACOM issued a directive requiring MJCI and PRCI to come up as expressed in the Latin maxim: potestas delegate non delegare
with their Clubs House Rule to address the Equine Infectious potest. This rule is based upon the ethical principle that such
Anemia (EIA) problem and to rid their facilities of horses infected it. delegated power constitutes not only a right but a duty to be
Said directive was issued pursuant to Administrative Order No. 55 performed by the delegate by the instrumentality of his own
by the Department of Agriculture declaring it unlawful for any judgment acting immediately upon the matter of legislation and not
person, firm or corporation to ship, drive, or transport horses from through the intervening mind of another. This rule however admits
any locality or place except when accompanied by a certificate of recognized exceptions such as the grant of rule-making power to
issued by the authority of the Director of the Bureau of Animal administrative agencies. They have been granted by Congress with
Industry (BAI). Thus, MJCI and PRCI ordered the owners of the authority to issue rules to regulate the implementation of a law
racehorses stable in their establishments to submit the horses to entrusted to them. Delegated rule-making has become a practical
blood sampling and administration of the Coggins Test to determine necessity in modern governance due to the increasing complexity
if they are infected. Subsequently, Philracom issued copies of the and variety of public functions.
guidelines for the monitoring and eradication of EIA. Despite
resistance from petitioners, the blood testing proceeded. The However, in every case of permissible delegation, there must be a
horses, whose owners refused to comply were banned from the showing that the delegation itself is valid. It is valid only if the law
races, were removed from the actual day of race, prohibited from (a) is complete in itself, setting forth therein the policy to be
renewing their licenses or evicted from their stables. executed, carried out, or implemented by the delegate; and (b)
fixes a standardthe limits of which are sufficiently determinate franchise and abiding by whatever rules enacted by Philracom is its
and determinableto which the delegate must conform in the duty.
performance of his functions. A sufficient standard is one which
defines legislative policy, marks its limits, maps out its boundaries As to the second requisite, petitioners raise some infirmities
and specifies the public agency to apply it. It indicates the relating to Philracoms guidelines. They question the supposed
circumstances under which the legislative command is to be belated issuance of the guidelines, that is, only after the collection
effected. of blood samples for the Coggins Test was ordered. While it is
conceded that the guidelines were issued a month after Philracoms
Philracom was created for the purpose of carrying out the declared directive, this circumstance does not render the directive nor the
policy in Section 1 which is "to promote and direct the accelerated guidelines void. The directives validity and effectivity are not
development and continued growth of horse racing not only in dependent on any supplemental guidelines. Philracom has every
pursuance of the sports development program but also in order to right to issue directives to MJCI and PRCI with respect to the
insure the full exploitation of the sport as a source of revenue and conduct of horse racing, with or without implementing guidelines.
employment." Furthermore, Philracom was granted exclusive
jurisdiction and control over every aspect of the conduct of horse As a rule, the issuance of rules and regulations in the exercise of an
racing, including the framing and scheduling of races, the administrative agency of its quasi-legislative power does not
construction and safety of race tracks, and the security of racing. require notice and hearing. In Abella, Jr. v. Civil Service Commission,
P.D. No. 420 is already complete in itself. this Court had the occasion to rule that prior notice and hearing are
not essential to the validity of rules or regulations issued in the
Section 9 of the law fixes the standards and limitations to which exercise of quasi-legislative powers since there is no determination
Philracom must conform in the performance of its functions. of past events or facts that have to be established or ascertained.
Clearly, there is a proper legislative delegation of rule-making The third requisite for the validity of an administrative issuance is
power to Philracom. Clearly too, for its part Philracom has exercised that it must be within the limits of the powers granted to it. The
its rule-making power in a proper and reasonable manner. More administrative body may not make rules and regulations which are
specifically, its discretion to rid the facilities of MJCI and PRCI of inconsistent with the provisions of the Constitution or a statute,
horses afflicted with EIA is aimed at preserving the security and particularly the statute it is administering or which created it, or
integrity of horse races which are in derogation of, or defeat, the purpose of a statute.
As to the supposed delegation by Philracom of its rule-making The assailed guidelines prescribe the procedure for monitoring and
powers to MJCI and PRCI, there is no delegation of power to speak eradicating EIA. These guidelines are in accord with Philracoms
of between Philracom, as the delegator and MJCI and PRCI as mandate under the law to regulate the conduct of horse racing in
delegates. The Philracom directive is merely instructive in the country.
character. Philracom had instructed PRCI and MJCI to "immediately
come up with Clubs House Rule to address the problem and rid Anent the fourth requisite, the assailed guidelines do not appear to
their facilities of horses infected with EIA." PRCI and MJCI followed- be unreasonable or discriminatory. In fact, all horses stabled at the
up when they ordered the racehorse owners to submit blood MJCI and PRCIs premises underwent the same procedure. The
samples and subject their race horses to blood testing. Compliance guidelines implemented were undoubtedly reasonable as they bear
with the Philracoms directive is part of the mandate of PRCI and a reasonable relation to the purpose sought to be accomplished,
MJCI under Sections 1 of R.A. No. 7953 and Sections 1 and 2 of i.e., the complete riddance of horses infected with EIA.
8407.
It also appears from the records that MJCI properly notified the
As correctly proferred by MJCI, its duty is not derived from the racehorse owners before the test was conducted. Those who failed
delegated authority of Philracom but arises from the franchise to comply were repeatedly warned of certain consequences and
granted to them by Congress allowing MJCI "to do and carry out all sanctions.
such acts, deeds and things as may be necessary to give effect to
the foregoing."As justified by PRCI, "obeying the terms of the
Furthermore, extant from the records are circumstances which unappealable authority to pass upon the issues of whether a river
allow respondents to determine from time to time the eligibility of or stream is public and navigable, whether a dam encroaches upon
horses as race entries. The lease contract executed between such waters and is constitutive as a public nuisance, and whether
petitioner and MJC contains a proviso reserving the right of the the law applies to the state of facts, thereby Constituting an alleged
lessor, MJCI in this case, the right to determine whether a particular unlawful delegation of judicial power to the Secretary of Public
horse is a qualified horse. In addition, Philracoms rules and Works and Communications.
regulations on horse racing provide that horses must be free from
any contagious disease or illness in order to be eligible as race Issue:
entries.
Whether or not there is an unlawful delegation of judicial power.
Ruling:
E. Fact-finding and Rate-Fixing The contentions of the appellees are not tenable. R.A. 2056 merely
empowers the Secretary to remove unauthorized obstructions or
1. PRIMITIVO LOVINA, and NELLY MONTILLA vs. HON. encroachments upon public streams, constructions that no private
FLORENCIO MORENO, as Secretary of Public Works and person was anyway entitled to make, because the bed of navigable
Communications, and BENJAMIN YONZON, G.R. No. L-17821, streams is public property, and ownership thereof is not acquirable
November 29, 1963 by adverse possession. It is true that the exercise of the Secretary's
power under the Act necessarily involves the determination of
Parties: some questions of fact, such as the existence of the stream and its
Petitioners: PRIMITIVO LOVINA, and NELLY MONTILLA previous navigable character; but these functions, whether judicial
Respondents: HON. FLORENCIO MORENO, as Secretary of or quasi-judicial, are merely incidental to the exercise of the power
Public Works and Communications, and BENJAMIN YONZON granted by law to clear navigable streams of unauthorized
obstructions or encroachments, and authorities are clear that they
Ponente: REYES, J.B.L., J. are, validly conferable upon executive officials provided the party
affected is given opportunity to be heard, as is expressly required
Facts: by Republic Act No. 2056, section 2.The mere fact that an officer is
required by law to inquire the existence of certain facts and to
Numerous residents of Macabebe, Pampanga complained that apply the law thereto in order to determine what his official conduct
appellees had blocked the "Sapang Bulati", a navigable river in the shall be and the fact that these acts may affect private, rights do
same municipality and asked that the obstructions be ordered not constitute an exercise of judicial powers. Accordingly, a statute
removed, under the provisions of Republic Act No. 2056. After may give to non-judicial officers the power to declare the existence
notice and hearing to the parties, the said Secretary of Public Works of facts which call into operation its provisions, and similarly may
and Communications found the constructions to be a public grant to commissioners and other subordinate officer, power to
nuisance in navigable waters, and ordered the land owners, ascertain and determine appropriate facts as a basis for procedure
spouses Lovina, to remove five (5) closures of Sapang Bulati. After in the enforcement of particular laws. It is noteworthy that Republic
receipt of the decision, the appellees filed a petition in CFI of Manila Act 2605 authorizes removal of the unauthorized dikes either as
to restrain the Secretary from enforcing his decision. The trial court, "public nuisances or as prohibited constructions" on public
after due hearing, granted a permanent injunction. It held that navigable streams, and those of appellees clearly are in the latter
Republic Act No. 2056 is unconstitutional and that Sapang Bulati is class. In fine, it is held that Republic Act No. 2056 does not
not a navigable river but a private stream. constitute an unlawful delegation of judicial power to the Secretary
of Public Works; that the findings of fact of the Secretary of Public
The appellees contention is that Republic Act No. 2056 is Works under Republic Act No. 2056should be respected in the
unconstitutional because it invests the Secretary of Public Works absence of illegality, error of law, fraud, or imposition, so long as
and Communications with sweeping, unrestrained, final and the said, findings are supported by substantial evidence submitted
to him. The decision appealed from is reversed, and the writs of Congress may delegate to administrative agencies of the
injunction issued therein are annulled and set aside. government the power to supply the details in the execution or
enforcement of a policy laid down by it which is complete in itself.
2. VIGAN ELECTRIC LIGHT COMPANY, INC. vs. THE PUBLIC Such law is not deemed complete unless it lays down a standard or
SERVICE COMMISSION, G.R. No. L-19850, January 30, 1964 pattern sufficiently fixed or determinate, or, at least, determinable
without requiring another legislation, to guide the administrative
Parties: body concerned in the performance of its duty to implement or
Petitioner: VIGAN ELECTRIC LIGHT COMPANY, INC. enforce said Policy. Otherwise, there would be no reasonable means
Respondent: THE PUBLIC SERVICE COMMISSION to ascertain whether or not said body has acted within the scope of
its authority, and, as a consequence, the power of legislation would
Ponente: CONCEPCION, J. eventually be exercised by a branch of the Government other than
that in which it is lodged by the Constitution, in violation, not only
Facts: of the allocation of powers therein made, but, also, of the principle
of separation of powers. Although the rule-making power and even
This is an original action for certiorari to annul an order of the power to fix rates when such rules and/or rates are meant to
respondent Public Service Commission ordering the reduction of apply to all enterprises of a given kind throughout the Philippines
rates of Vigan Electric Light Co. PSC averred that Vigan Electric may partake of a legislative character, such is not the nature of the
making a net operating profit in excess of the allowable return of order complained of. Indeed, the same applies exclusively to
12% on its invested capital, and that it is in the public interest and petitioner herein. What is more, it is predicated upon the finding of
in consonance with Section 3of Republic Act No. 3043 that fact based upon a report submitted by the General Auditing
reduction of its rates to the extent of its excess revenue be put into Office that petitioner is making a profit of more than 12% of its
effect immediately. Vigan Electric contended that the reduction of invested capital, which is denied by petitioner. Obviously, the latter
rate is unconstitutional because it has been ordered without notice is entitled to cross-examine the maker of said report, and to
and hearing, thus issued without due process of law. In defense, introduce evidence to disprove the contents thereof and/or explain
PSC maintains that rate-fixing is a legislative function; that or complement the same, as well as to refute the conclusion drawn
legislative or rule-making powers may constitutionally be exercised therefrom by the respondent. In other words, in making said finding
without previous notice of hearing; and that the decision in Ang of fact, respondent performed a function partaking of a quasi-
Tibay vs. Court of Industrial Relations(69 Phil., 635) in which we judicial character the valid exercise of which demands previous
held that such notice and hearing are essential to the validity of a notice and hearing.
decision of the Public Service Commission is not in point
because, unlike the order complained of which respondent 3. PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION
claims to be legislative in nature the Ang Tibay case referred to a vs. JOSE LUIS A. ALCUAZ, as NTC Commissioner, and
proceeding involving the exercise of judicial functions. NATIONAL TELECOMMUNICATIONS COMMISSION, G.R. No.
84818, December 18, 1989
Issue:
Parties:
Whether or not the Congress validly delegated legislative power to Petitioner: PHILIPPINE COMMUNICATIONS SATELLITE
the PSC. CORPORATION
Respondents: JOSE LUIS A. ALCUAZ, as NTC Commissioner,
Ruling: and NATIONAL TELECOMMUNICATIONS COMMISSION
No. Congress has not delegated, and cannot delegate legislative Ponente: REGALADO, J.
powers to the Public Service Commission. Consistently with the
principle of separation of powers, which underlies our constitutional Facts:
system, legislative powers may not be delegated except to local
governments, and only to matters purely of local concern. However,
PHILCOMSAT was granted "a franchise to establish, construct, The NTC order now in controversy had further extended the
maintain and operate in the Philippines, at such places as the provisional authority of the petitioner for another six (6) months,
grantee may select, station or stations and associated equipment counted from September 16, 1988, but it directed the petitioner to
and facilities for international satellite communications." Under this charge modified reduced rates through a reduction of fifteen
franchise, it was likewise granted the authority to "construct and percent (15%) on the present authorized rates. Respondent
operate such ground facilities as needed to deliver Commissioner ordered said reduction on the following ground:
telecommunications services from the communications satellite
system and ground terminal or terminals. The Commission in its on-going review of present service
rates takes note that after an initial evaluation by the Rates
The satellite services thus provided by petitioner enable said Regulation Division of the Common Carriers Authorization
international carriers to serve the public with indispensable Department of the financial statements of applicant, there is
communication services, such as overseas telephone, telex, merit in a REDUCTION in some of applicant's rates, subject
facsimile, telegrams, high speed data, live television in full color, to further reductions, should the Commission finds (sic) in its
and television standard conversion from European to American or further evaluation that more reduction should be effected
vice versa. either on the basis of a provisional authorization or in the
final consideration of the case.
Under Section 5 of Republic Act No. 5514, petitioner was exempt
from the jurisdiction of the then Public Service Commission, now Issue:
respondent NTC. However, pursuant to Executive Order No. 196
issued on June 17, 1987, petitioner was placed under the Petitioner is in effect questioning the constitutionality of Executive
jurisdiction, control and regulation of respondent NTC, including all Orders Nos. 546 and 196 on the ground that the same do not fix a
its facilities and services and the fixing of rates. Implementing said standard for the exercise of the power therein conferred.
Executive Order No. 196, respondents required petitioner to apply
for the requisite certificate of public convenience and necessity Ruling:
covering its facilities and the services it renders, as well as the
corresponding authority to charge rates therefor. The order in question which was issued by respondent Alcuaz no
doubt contains all the attributes of a quasi-judicial adjudication.
Consequently, under date of September 9, 1987, petitioner filed Foremost is the fact that said order pertains exclusively to
with respondent NTC an application 4 for authority to continue petitioner and to no other. Further, it is premised on a finding of
operating and maintaining the same facilities it has been fact, although patently superficial, that there is merit in a reduction
continuously operating and maintaining since 1967, to continue of some of the rates charged- based on an initial evaluation of
providing the international satellite communications services it has petitioner's financial statements-without affording petitioner the
likewise been providing since 1967, and to charge the current rates benefit of an explanation as to what particular aspect or aspects of
applied for in rendering such services. Pending hearing, it also the financial statements warranted a corresponding rate reduction.
applied for a provisional authority so that it can continue to operate No rationalization was offered nor were the attending
and maintain the above mentioned facilities, provide the services contingencies, if any, discussed, which prompted respondents to
and charge therefor the aforesaid rates therein applied for. impose as much as a fifteen percent (15%) rate reduction. It is not
far-fetched to assume that petitioner could be in a better position
On September 16, 1987, petitioner was granted a provisional to rationalize its rates vis-a-vis the viability of its business
authority to continue operating its existing facilities, to render the requirements. The rates it charges result from an exhaustive and
services it was then offering, and to charge the rates it was then detailed study it conducts of the multi-faceted intricacies attendant
charging. This authority was valid for six (6) months from the date to a public service undertaking of such nature and magnitude. We
of said order. 5 When said provisional authority expired on March are, therefore, inclined to lend greater credence to petitioner's
17, 1988, it was extended for another six (6) months, or up to ratiocination that an immediate reduction in its rates would
September 16, 1988. adversely affect its operations and the quality of its service to the
public considering the maintenance requirements, the projects it
still has to undertake and the financial outlay involved. Notably, PETROLEUM TANKER OPERATORS ASSOCIATION OF THE
petitioner was not even afforded the opportunity to cross-examine PHILIPPINES, LIGHTERAGE ASSOCIATION OF THE PHILIPPINES
the inspector who issued the report on which respondent NTC and PILOTAGE INTEGRATED SERVICES CORPORATION
based its questioned order. Respondents: COURT OF APPEALS, UNITED HARBOR
PILOTS' ASSOCIATION OF THE PHILIPPINES, INC. and MANILA
At any rate, there remains the categorical admission made by PILOTS' ASSOCIATION
respondent NTC that the questioned order was issued pursuant to
its quasi-judicial functions. It, however, insists that notice and Ponente: MENDOZA, J.
hearing are not necessary since the assailed order is merely
incidental to the entire proceedings and, therefore, temporary in Facts:
nature. This postulate is bereft of merit.
Private respondent United Harbor Pilots' Association of the
While respondents may fix a temporary rate pending final Philippines, Inc. (UHPAP) is the umbrella organization of various
determination of the application of petitioner, such rate-fixing groups rendering pilotage service in different ports of the
order, temporary though it may be, is not exempt from the Philippines. The service consists of navigating a vessel from a
statutory procedural requirements of notice and hearing, as well as specific point, usually about two (2) miles off shore, to an assigned
the requirement of reasonableness. Assuming that such power is area at the pier and vice versa. When a vessel arrives, a harbor
vested in NTC, it may not exercise the same in an arbitrary and pilot takes over the ship from its captain to maneuver it to a berth
confiscatory manner. Categorizing such an order as temporary in in the port, and when it departs, the harbor pilot also maneuvers it
nature does not perforce entail the applicability of a different rule of up to a specific point off shore. The setup is required by the fact
statutory procedure than would otherwise be applied to any other that each port has peculiar topography with which a harbor pilot is
order on the same matter unless otherwise provided by the presumed to be more familiar than a ship captain.
applicable law
The Philippine Ports Authority (PPA) is the government agency
The applicable statutory provision is Section 16(c) of the Public which regulates pilotage.
Service Act which provides:
Section 16. Proceedings of the Commission, upon notice and On February 3, 1986, shortly before the presidential elections,
hearing the Commission shall have power, upon proper President Ferdinand E. Marcos, responding to the clamor of harbor
notice and hearing in accordance with the rules and pilots for an increase in pilotage rates, issued Executive Order No.
provisions of this Act, subject to the limitations and 1088, PROVIDING FOR UNIFORM AND MODIFIED RATES FOR
exceptions mentioned and saving provisions to the contrary. PILOTAGE SERVICES RENDERED TO FOREIGN AND COASTWISE
VESSELS IN ALL PRIVATE AND PUBLIC PORTS. The executive order
4. PHILIPPINE INTERISLAND SHIPPING ASSOCIATION OF THE increased substantially the rates of the existing pilotage fees
PHILIPPINES, CONFERENCE OF INTERISLAND SHIPOWNERS previously fixed by the PPA.
AND OPERATORS, UNITED PETROLEUM TANKER OPERATORS
ASSOCIATION OF THE PHILIPPINES, LIGHTERAGE However, the PPA refused to enforce the executive order on the
ASSOCIATION OF THE PHILIPPINES and PILOTAGE ground that it had been drawn hastily and without prior
INTEGRATED SERVICES CORPORATION vs. COURT OF consultation: that its enforcement would create disorder in the
APPEALS, UNITED HARBOR PILOTS' ASSOCIATION OF THE ports as the operators and owners of the maritime vessels had
PHILIPPINES, INC. and MANILA PILOTS' ASSOCIATION, G.R. expressed opposition to its implementation; and that the increase
No. 100481, January 22, 1997 in pilotage, as mandated by it, was exorbitant and detrimental to
port operations.
Parties:
Petitioners: PHILIPPINE INTERISLAND SHIPPING The UHPAP then announced its intention to implement E.O. No.
ASSOCIATION OF THE PHILIPPINES, CONFERENCE OF 1088 effective November 16, 1986. This in turn drew a warning
INTERISLAND SHIPOWNERS AND OPERATORS, UNITED from the PPA that disciplinary sanctions would be applied to those
who would charge rates under E.O. No. 1088. The PPA instead made the creation of administrative agencies and the delegation to
issued Memorandum Circular No. 43-86, fixing pilotage fees at them of legislative power necessary.
rates lower than those provided in E.O. No. 1088.
On February 26, 1988, the PPA issued Administrative Order No. 02-
88, entitled IMPLEMENTING GUIDELINES ON OPEN PILOTAGE There is no basis for petitioners' argument that rate fixing is merely
SERVICE. The PPA announced in its order that it was leaving to the an exercise of administrative power, that if President Marcos had
contracting parties, i.e., the shipping lines and the pilots, the fixing power to revise the rates previously fixed by the PPA through the
of mutually acceptable rates for pilotage services, thus abandoning issuance of E.O. No. 1088, the PPA could in turn revise those fixed
the rates fixed by it (PPA) under Memorandum Circular No. 43-86, by the President, as the PPA actually did in A.O. No. 43-86, which
as well as those provided in E.O. No. 1088. The administrative order fixed lower rates of pilotage fees, and even entirely left the fees to
provided: be paid for pilotage to the agreement of the parties to a contract.
The orders previously issued by the PPA were in the nature of
Sec. 3. Terms/Conditions on Pilotage Service. The shipping line or subordinate legislation, promulgated by it in the exercise of
vessel's agent/representative and the harbor pilot/firm chosen by delegated power. As such these could only be amended or revised
the former shall agree between themselves, among others, on what by law, as the President did by E.O. No. 1088.
pilotage service shall be performed, the use of tugs and their rates,
taking into consideration the circumstances stated in Section 12 of
PPA AO No. 03-85, and such other conditions designed to ensure
the safe movement of the vessel in pilotage areas/grounds.
It is not an answer to say that E.O. No. 1088 should not be
Issue: considered a statute because that would imply the withdrawal of
power from the PPA. What determines whether an act is a law or an
Whether Executive Order No. 1088 is valid and petitioners are administrative issuance is not its form but its nature. Here, as we
bound to obey it. have already said, the power to fix the rates of charges for
services, including pilotage service, has always been regarded as
Ruling: legislative in character.
This is an original Petition for prohibition with a prayer for the Thus, on May 20, 1987, the petitioner, allegedly on the basis of the
issuance of a writ of preliminary injunction. public interest, went to this Court and filed the instant Petition for
prohibition, seeking that judgment be rendered declaring the
The record of the case discloses that the herein petitioner questioned Department Order unconstitutional. The thrust of the
Philippine Consumers Foundation, Inc. is a non-stock, non-profit Petition is that the said Department Order was issued without any
corporate entity duly organized and existing under the laws of the legal basis. The petitioner also maintains that the questioned
Philippines. The herein respondent Secretary of Education, Culture Department Order was issued in violation of the due process clause
and Sports is a ranking cabinet member who heads the Department of the Constitution in as much as the petitioner was not given due
of Education, Culture and Sports of the Office of the President of the notice and hearing before the said Department Order was issued.
Philippines.
Issue:
On February 21, 1987, the Task Force on Private Higher Education
created by the Department of Education, Culture and Sports Whether or not the fixing of school fees through department order
(hereinafter referred to as the DECS) submitted a report entitled by DECS is a valid delegation of legislative power.
"Report and Recommendations on a Policy for Tuition and Other
School Fees." The report favorably recommended to the DECS the Ruling:
following courses of action with respect to the Government's policy
on increases in school fees for the schoolyear 1987 to 1988 After a careful examination of the entire record of the case, We find
(1) Private schools may be allowed to increase its total school fees the instant Petition devoid of merit.
by not more than 15 per cent to 20 per cent without the need for
We are not convinced by the argument that the power to regulate administrative agency are meant to apply to all enterprises of a
school fees "does not always include the power to increase" such given kind throughout the country, they may partake of a
fees. Section 57 (3) of Batas Pambansa Blg. 232, otherwise known legislative character. Where the rules and the rates imposed apply
as The Education Act of 1982, vests the DECS with the power to exclusively to a particular party, based upon a finding of fact, then
regulate the educational system in the country, to wit: its function is quasi-judicial in character.
SEC. 57. Educations and powers of the Ministry. The Ministry Is Department Order No. 37 issued by the DECS in the exercise of
shall: its legislative function? We believe so. The assailed Department
xxx xxx xxx Order prescribes the maximum school fees that may be charged by
(3) Promulgate rules and regulations necessary for the all private schools in the country for school year 1987 to 1988. This
administration, supervision and regulation of the educational being so, prior notice and hearing are not essential to the validity of
system in accordance with declared policy. its issuance.
xxx xxx xxx 9
This observation notwithstanding, there is a failure on the part of
Section 70 of the same Act grants the DECS the power to issue the petitioner to show clear and convincing evidence of such
rules which are likewise necessary to discharge its functions and arbitrariness. As the record of the case discloses, the DECS is not
duties under the law, to wit: without any justification for the issuance of the questioned
Department Order. It would be reasonable to assume that the
SEC. 70. Rule-making Authority. The Minister of Education report of the Task Force created by the DECS, on which it based its
and Culture, charged with the administration and enforcement of decision to allow an increase in school fees, was made judiciously.
this Act, shall promulgate the necessary implementing rules and Moreover, upon the instance of the petitioner, as it so admits in its
regulations. Petition, the DECS had actually reduced the original rates of 15% to
20% down to 10% to 15%, accordingly. Under the circumstances
In the absence of a statute stating otherwise, this power includes peculiar to this case, We cannot consider the assailed Department
the power to prescribe school fees. No other government agency Order arbitrary.
has been vested with the authority to fix school fees and as such,
the power should be considered lodged with the DECS if it is to Under the Rules of Court, it is presumed that official duty has been
properly and effectively discharge its functions and duties under regularly performed. 10 In the absence of proof to the contrary,
the law. that presumption prevails. This being so, the burden of proof is on
the party assailing the regularity of official proceedings. In the case
We find the remaining argument of the petitioner untenable. The at bar, the petitioner has not successfully disputed the
petitioner invokes the due process clause of the Constitution presumption.
against the alleged arbitrariness of the assailed Department Order.
The petitioner maintains that the due process clause requires that We commend the petitioner for taking the cudgels for the public,
prior notice and hearing are indispensable for the Department especially the parents and the students of the country. Its zeal in
Order to be validly issued. advocating the protection of the consumers in its activities should
be lauded rather than discouraged. But a more convincing case
We disagree. should be made out by it if it is to seek relief from the courts some
time in the future. Petitioner must establish that respondent acted
The function of prescribing rates by an administrative agency may without or in excess of her jurisdiction; or with grave abuse of
be either a legislative or an adjudicative function. If it were a discretion, and there is no appeal or any other plain, speedy, and
legislative function, the grant of prior notice and hearing to the adequate remedy in the ordinary course of law before the
affected parties is not a requirement of due process. As regards extraordinary writ of prohibition may issue.
rates prescribed by an administrative agency in the exercise of its
quasi-judicial function, prior notice and hearing are essential to the This Court, however, does not go to the extent of saying that it
validity of such rates. When the rules and/or rates laid down by an gives its judicial imprimatur to future increases in school fees. The
increases must not be unreasonable and arbitrary so as to amount 1/2% contributions will be based, up to a maximum of P500
to an outrageous exercise of government authority and power. In for any one month.
such an eventuality, this Court will not hesitate to exercise the
power of judicial review in its capacity as the ultimate guardian of
the Constitution.
Upon receipt of a copy thereof, petitioner Victorias Milling
Company, Inc., through counsel, wrote the Social Security
Commission in effect protesting against the circular as
contradictory to a previous Circular No. 7 expressly excluding
F. Construction and Administrative Interpretation overtime pay and bonus in the computation of the employers' and
employees' respective monthly premium contributions, and
1. VICTORIAS MILLING COMPANY, INC. vs. SOCIAL SECURITY submitting, "In order to assist your System in arriving at a proper
COMMISSION, G.R. No. L-16704, March 17, 1962 interpretation of the term 'compensation' for the purposes of" such
computation, their observations on Republic Act No. 1161 (Social
Security Law) and its amendment and on the general interpretation
of the words "compensation", "remuneration" and "wages". Counsel
Parties: further questioned the validity of the circular for lack of authority
on the part of the Social Security Commission to promulgate it
Petitioner-appellant: VICTORIAS MILLING COMPANY, INC. without the approval of the President and for lack of publication in
the Official Gazette.
Respondent-appellee: SOCIAL SECURITY COMMISSION
Facts:
WHEREFORE, the judgment of the Court of Tax Appeals is hereby 2. THE PEOPLE OF THE PHILIPPINE ISLANDS vs. AUGUSTO A.
reversed, and the questioned assessment set aside. No costs. SANTOS, G.R. No. L-44291, August 15, 1936
On Feb. 22, 1952, all Carabao of Panlilio was being quarantined The fiscal filed against Augusto Santos a violation of sec. 28 Admin.
suspecting that is suffered from dangerous communicable disease Order 2; provides that boat licensed under Act 4003 are prohibited
called RINDERPEST, he was informed in writing for such matter by to gather, collect and catch fish and other sea products, to anchor
the Dept. of Agriculture. or loiter within the 3km jurisdiction of US military authorities.
The servants of Panlilio took the carabao out of the corral to the Sec 28 Admin Order 2was issued by the Sec. Of Agriculture &
adjacent area land for the purpose of working them. commerce by virtue of an authority vested in him by Sec 4 Act.
4003: that he shall issue instructions, orders, rules and regulations
D.A. Filed a case against Panlilio for violation of Sec 6 of Act 1760 to carry into effect provisions in Act 4003 and conduct proceedings
and later amended to Sec 3,4 and 5 Act 1760. Taking his Carabao under such provisions.
while under quarantine.
Issue:
Issue:
1. Whether or not Sec. of Agri & Commerce exercise an excess of
1. Whether or not accused violate sec. 3,4 and 5 of Act 1760. regulatory power as vested by Sec. 4 Act 4003.
2. Whether or not Act 1760 is a penal regulation. 2. Whether or not Sec. Of Agri & Commerce can exercise legislative
power in issuing an Admin Order 2.
Ruling: 3. Whether or not Sec. 28 of Admin Order 2 is null and void.
Santos charges does not constitute a crime or a violation of some In spite of the permit to transport and the said four certificates, the
criminal law within the jurisdiction of the civil courts, information carabaos, while passing at Basud, Camarines Norte, were
DISMISSED. confiscated by the town's police station commander, and by
provincial veterinarian. The confiscation was basis on the
3. ANSELMO L. PESIGAN and MARCELINO L. PESIGAN vs. aforementioned Executive Order No. 626-A which prohibits the
JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, transportation and slaughtering of carabaos. The confiscated
Caloocan City Branch 129, acting for REGIONAL TRIAL carabaos or carabeef were distributed to twenty-five farmers of
COURT of Camarines Norte, now presided over by JUDGE Basud, and to a farmer from the Vinzons municipal nursery.
NICANOR ORIO, Daet Branch 40; DRA. BELLA S. MIRANDA,
ARNULFO V. ZENAROSA, ET AL., G.R. No. L-64279, April 30, Issue: Whether or not E.O. No. 626-A, providing for the confiscation
1984 and forfeiture by the government of carabaos transported from one
province to another, dated October 25, 1980 is enforceable before
Parties: publication in the Official Gazette on June 14, 1982.
Petitioners: ANSELMO L. PESIGAN and MARCELINO L.
PESIGAN Ruling: We hold that the said executive order should not be
Respondents: JUDGE DOMINGO MEDINA ANGELES, enforced against the Pesigans on April 2, 1982 because, as already
Regional Trial Court, Caloocan City Branch 129, acting for noted, it is a penal regulation published more than two months
REGIONAL TRIAL COURT of Camarines Norte, now presided later in the Official Gazette dated June 14, 1982. It became
over by JUDGE NICANOR ORIO, Daet Branch 40; DRA. effective only fifteen days thereafter as provided in article 2 of the
BELLA S. MIRANDA, ARNULFO V. ZENAROSA, ET AL. Civil Code and section 11 of the Revised Administrative Code.
H. Effectivity of Rules Ruling: The Philippine Constitution does not require the publication
of the laws as a pre-requisite for their effectivity; neither the
1. LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and publication of laws in the Official gazette as a pre-requisite for their
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY effectivity.
AND NATIONALISM, INC. (MABINI) vs. HON. JUAN C. TUVERA,
in his capacity as Executive Assistant to the President, Article 2 of the Civil Code provides that laws shall take effect
HON. JOAQUIN VENUS, in his capacity as Deputy Executive fifteen days following the completion of their publication on the
Assistant to the President, MELQUIADES P. DE LA CRUZ, Official Gazette, unless it is otherwise provided This pre-requisite
ETC., ET AL., G.R. No. L-63915, December 29, 1986 does not apply to a law with a fixed provision as to when will it take
effect. The intention of this provision is to give the general public
Parties: enough awareness of the laws that will regulate their actions.
Petitioners: LORENZO M. TAADA, ABRAHAM F.
SARMIENTO, and MOVEMENT OF ATTORNEYS FOR Commonwealth Act No. 638 does not support the proposition that
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. for the effectivity of laws, it must be published in the Official
(MABINI) Gazette. The said act only provides the uniform publication and
Respondents: HON. JUAN C. TUVERA, in his capacity as distribution of the Official Gazette, only important legislative acts
Executive Assistant to the President, HON. JOAQUIN VENUS, in his and those of public in nature are required to be published in the
capacity as Deputy Executive Assistant to the President, Official Gazette.
MELQUIADES P. DE LA CRUZ, ETC., ET AL.
Ignorance of the law excuses no one, it is unjust if a person will be
Ponente: CRUZ, J. punished with a law he had no notice, thats why laws which is
public in nature shall be published in the Official gazette to protect
Facts: Petitioners Lorenzo M. Tanada, et. al. invoked due process in the constitutional right of the people, to be informed on matter of
demanding the disclosure of a number of Presidential Decrees public concern. For no person should be bound by law without
which they claimed had not been published as required by Law. The notice. The Court declared that presidential issuances of general
government argued that while publication was necessary as a rule, application which have not been published have no force and
it was not so when it was otherwise provided, as when the decrees effect.
themselves declared that they were to become effective
immediately upon approval. The court decided on April 24, 1985 in Principles involved:
Article 2 of the Civil Code provides that laws shall take Commonwealth Act No. 638 only provides the uniform
effect fifteen days following the completion of their publication and distribution of the Official Gazette, only
publication on the Official Gazette, unless it is otherwise important legislative acts and those of public in nature
provided. are required to be published in the Official Gazette.