Admin Law Chapter 4 Cases

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 108310 September 1, 1994
RUFINO O. ESLAO, in his capacity as President of Pangasinan State University, petitioner,

vs.
COMMISSION ON AUDIT, respondent.
Mehol K. Sadain for petitioner.
FELICIANO, J.:
In this Petition for Certiorari, Rufino O. Eslao in his capacity as President of the Pangasinan State University ("PSU") asks
us to set aside Commission on Audit ("COA") Decisions Nos. 1547 (1990) and 2571 (1992) which denied honoraria and per
diems claimed under National Compensation Circular No. 53 by certain PSU personnel including petitioner.
On 9 December 1988, PSU entered into a Memorandum of Agreement ("MOA") 1 with the Department of Environment and
Natural Resources ("DENR") for the evaluation of eleven (11) government reforestation operations in Pangasinan. 2 The
evaluation project was part of the commitment of the Asian Development Bank ("ADB") under the ADB/OECF Forestry
Sector Program Loan to the Republic of the Philippines and was one among identical project agreements entered into by
the DENR with sixteen (16) other state universities.
On 9 December 1988, a notice to proceed 3 with the review and evaluation of the eleven (11) reforestation operations was
issued by the DENR to PSU. The latter complied with this notice and did proceed.
On 16 January 1989, per advice of the PSU Auditor-in-Charge with respect to the payment of honoraria and per diems of
PSU personnel engaged in the review and evaluation project, PSU Vice President for Research and Extension and
Assistant Project Director Victorino P. Espero requested the Office of the President, PSU, to have the University's Board of
Regents ("BOR") confirm the appointments or designations of involved PSU personnel including the rates
of honoraria and per diems corresponding to their specific roles and functions. 4
The BOR approved the MOA on 30 January 1989 5 and on 1 February 1989, PSU issued Voucher No.
8902007 6representing the amount of P70,375.00 for payment of honoraria to PSU personnel engaged in the project. Later,
however, the approved honoraria rates were found to be somewhat higher than the rates provided for in the guidelines of
National Compensation Circular ("NCC") No. 53. Accordingly, the amounts were adjusted downwards to conform to NCC
No. 53. Adjustments were made by deducting amounts from subsequent disbursements of honoraria. By June 1989, NCC
No. 53 was being complied with. 7
On 6 July 1989, Bonifacio Icu, COA resident auditor at PSU, alleging that there were excess payments ofhonoraria, issued
a "Notice of Disallowance" 8 disallowing P64,925.00 from the amount of P70,375.00 stated in Voucher No. 8902007,
mentioned earlier. The resident auditor based his action on the premise that Compensation Policy Guidelines ("CPG") No.
80-4, dated 7 August 1980, issued by the Department of Budget and Management which provided for lower rates than NCC
No. 53 dated 21 June 1988, also issued by the Department of Budget and Management, was the schedule
for honoraria and per diems applicable to work done under the MOA of 9 December 1988 between the PSU and the DENR.
On 18 October 1989, a letter 9 was sent by PSU Vice President and Assistant Project Director Espero to the Chairman of
the COA requesting reconsideration of the action of its resident auditor. In the meantime, the Department of Budget and
Management ("DBM"), upon request by PSU, issued a letter 10 clarifying that the basis for the
project's honoraria should notbe CPG No. 80-4 which pertains to locally funded projects but rather NCC No. 53 which
pertains to foreign-assisted projects. A copy of this clarification was sent to the COA upon request by PSU.
On 18 September 1990, COA Decision No. 1547 11 was issued denying reconsideration of the decision of its resident
auditor. The COA ruled that CPG. No. 80-4 is the applicable guideline in respect of the honoraria as CPG No. 80-4 does not
distinguish between projects locally funded and projects funded or assisted with monies of foreign-origin.
PSU President Eslao sent a letter 12 dated 20 March 1991 requesting reconsideration of COA Decision No. 1547 (1990)
alleging that (a) COA had erred in applying CPG No. 80-4 and not NCC No. 53 as the project was foreign-assisted and (b)
the decision was discriminatory honoraria based on NCC No. 53 having been approved and granted by COA resident
auditors in two (2) other state universities engaged in the same reforestation project. PSU then submitted to the COA (a) a
certification 13 from the DENR to the effect that the DENR evaluation project was foreign- assisted and (b) the letter of the
DBM quoted in the margin supra.
On 16 November 1992, COA Decision No. 2571 (1992) 14 was issued denying reconsideration.
In the meantime, in December 1990, the DENR informed petitioner of its acceptance of the PSU final reports on the review
and evaluation of the government reforestation projects. 15 Subsequently, honoraria for the period from January 1989 to
January 1990 were disbursed in accordance with NCC No. 53. A Certificate of Settlement and Balances (CSB No. 92-0005-
184 [DENR]) 16 was then issued by the COA resident auditor of PSU showing disallowance of alleged excess payment
of honoraria which petitioner was being required to return.
The instant Petition prays that (a) COA Decision Nos. 1547 (1990) and 2571 (1992) be set aside; (b) the COA be ordered to
pass in audit the grant of honoraria for the entire duration of the project based on the provisions and rates contained in NCC
No. 53; and (c) the COA be held liable for actual damages as well as petitioner's legal expenses and attorney's fees.
The resolution of the dispute lies in the determination of the circular or set of provisions applicable in respect of
the honoraria to be paid to PSU personnel who took part in the evaluation project, i.e., NCC No. 53 or CPG No. 80-4.
In asserting that NCC No. 53 supplies the applicable guideline and that the COA erred in applying CPG No. 80-4 as the
pertinent standard, petitioner contends that:
(a) CPG No. 80-4 applies to "special projects" the definition and scope of which do not embrace the evaluation
project undertaken by petitioner for the DENR;
(b) NCC No. 53 applies to foreign-assisted projects ("FAPs") while CPG No. 80-4 applies to locally-funded projects
as no reference to any foreign component characterizing the projects under its coverage is made;
(c) the DENR evaluation project is a foreign-assisted project per certification and clarification of the DENR and DBM
respectively as well as the implied admission of the COA in its Comment; and
(d) the DBM's position on the matter should be respected since the DBM is vested with authority to (i) classify
positions and determine appropriate salaries for specific position classes, (ii) review the compensation benefits
programs of agencies and (iii) design job evaluation programs.
The Office of the Solicitor General, in lieu of a Comment on the Petition, filed a Manifestation 17 stating that (a) since, per
certification of the DENR and Letter/Opinion of the DBM that the project undertaken by PSU is foreign-assisted, NCC No. 53
should apply; and (b) respondent COA's contention that CPG No. 80-4 does not distinguish between projects which are
foreign-funded from locally-funded projects deserves no merit, since NCC No. 53, a special guideline, must be construed as
an exception to CPG No. 80-4, a general guideline. The Solicitor General, in other words, agreed with the position of
petitioner.
Upon the other hand, respondent COA filed its own comment, asserting that:
(a) while the DBM is vested with the authority to issue rules and regulations pertaining to compensation,
this authority is regulated by Sec. 2 (2) of Art. IX-D of the 1987 Constitution which vests respondent COA
with the power to "promulgate accounting and auditing rules and regulations, including those for the
prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable
expenditures, or uses of government funds and properties;
(b) the Organizational Arrangement and Obligations of the Parties sections of the MOA clearly show that
the evaluation project is an "inter-agency activity" between the DENR and PSU and therefore a "special
project";
(c) the issue as to whether the evaluation project is in fact a "special project" has become moot in view of
the DBM's clarification/ruling that the evaluation project is foreign-assisted and therefore NCC No. 53, not
CPG No. 80-4 which applies only to locally-funded projects, should apply;
(d) the DBM issuance notwithstanding, respondent COA applied CPG No. 80-4 to effectively rationalize the
rates of additional compensation assigned to or detailed in "special projects" as its application is without
distinction as to the source of funding and any payment therefore in excess of that provided by CPG No.
80-4 is unnecessary, excessive and disadvantageous to the government;
(e) respondent COA's previous allowance of payment of honoraria based on NCC No. 53 or the fact that a
full five years had already elapsed since NCC No. 53's issuance does not preclude COA from assailing the
circular's validity as "it is the responsibility of any public official to rectify every error he encounters in the
performance of his function" and "he is not duty- bound to pursue the same mistake for the simple reason
that such mistake had been continuously committed in the past";
(f) the DBM ruling classifying the evaluation project as foreign-assisted does not rest on solid ground since
loan proceeds, regardless of source, eventually become public funds for which the government is
accountable, hence, any project under the loan agreement is to be considered locally-funded;
(g) the DBM ruling constitutes an unreasonable classification, highly discriminatory and violative of the
equal protection clause of the Constitution; and
(h) granting arguendo NCC No. 53 is the applicable criterion, petitioner received honoraria in excess of
what was provided in the MOA.
We consider the Petition meritorious.
Sec. 2.1 of CPG No. 80-4 defines "special project" as
an inter-agency or inter-committee activity or an undertaking by a composite group of officials/employees

from various agencies which [activity or undertaking] is not among the regular and primary functions of the
agencies involved. (Emphasis and brackets supplied)
Respondent COA maintains that the sections of the MOA detailing the "Organizational Arrangement and Obligations of the
Parties" clearly show that the evaluation project is an "inter-agency activity." The pertinent sections of the MOA are as
follows:
ORGANIZATIONAL ARRANGEMENTS
A Coordinating Committee shall be created which shall be responsible for the overall administration and
coordination of the evaluation, to be chaired by a senior officer of the DENR. The Committee shall [be]
composed [of] the following:
Chairman : Undersecretary for Planning,

Policy and Project Management
[DENR]
Co-Chairman : Vice-President for Research

and Development [PSU]
Members : Director of FMB

Dean, PSU Infanta Campus
Associate Dean, PSU Infanta
Campus
Chief, Reforestation
Division
Project Director of the ADB
Program Loan for Forestry
Sector
OBLIGATIONS OF THE PARTIES

Obligations of DENR:
The DENR shall have the following obligations:
1. Provide the funds necessary for the review and reevaluation of eleven (11) reforestation projects.
xxx xxx xxx
2. Undertake the monitoring of the study to ascertain its progress and the proper utilization of funds in
conformity with the agreed work and financial plan.
3. Reserve the right to accept or reject the final report and in the latter case, DENR may request PSU to
make some revisions/modifications on the same.
Obligations of the PSU:
The PSU shall have the following obligations:
1. Undertake the review and evaluation of the eleven (11) DENR-funded reforestation projects in
accordance with the attached TOR;
2. Submit regularly to DENR financial status reports apart from the progress report required to effect the
second release of funds;
3. Submit the final report to DENR fifteen (15) days after the completion of the work. The report should at
least contain the information which appears in Annex D;
4. Return to DENR whatever balance is left of the funds after the completion of work.
Simply stated, respondent COA argues that since the Coordinating Committee is composed of personnel from the DENR
and PSU, the evaluation project is an "inter-agency activity" within the purview of the definition of a "special project".
We are unable to agree with respondent COA.
Examination of the definition in CPG No. 80-4 of a "special project" reveals that definition has two (2) components: firstly,
there should be an inter-agency or inter-committee activity or undertaking by a group of officials or employees who are
drawn from various agencies; and secondly, the activity or undertaking involved is not part of the "regular or primary"
functions of the participating agencies. Examination of the MOA and its annexes reveals that two (2) groups were actually
created. The first group consisted of the coordinating committee, the membership of which was drawn from officials of the
DENR and of the PSU; and the second, the evaluation project team itself which was, in contrast, composed exclusively of
PSU personnel. 18 We believe that the first component of the CPU No. 80-4's definition of "special project" is applicable in
respect of the group which is charged with the actual carrying out of the project itself, rather than to the body or group which
coordinates the task of the operating or implementing group. To construe the administrative definition of "special project"
otherwise would create a situation, which we deem to be impractical and possibly even absurd, under which any
undertaking entered into between the senior officials of government agencies would have to be considered an "inter-agency
or inter-committee activity," even though the actual undertaking or operation would be carried out not by the coordinating
body but rather by an separate group which might not (as in the present case) be drawn from the agencies represented in
the coordinating group. In other words, an "inter-agency or inter-committee activity or . . . undertaking" must be one which is
actually carried out by a composite group of officials and employees from the two (2) or more participating agencies.
As already noted, in the case at hand, the project team actually tasked with carrying out the evaluation of the DENR
reforestation activity is composed exclusively of personnel from PSU; the project team's responsibility and undertaking are
quite distinct from the responsibilities of the coordinating [DENR and PSU] committee. Thus, the project team is not a
"composite group" as required by the definition of CPG No. 80-4 of "special projects." It follows that the evaluation projects
here involved do not fall within the ambit of a "special project" as defined and regulated by CPG No. 80-4.
We do not consider it necessary to rule on whether the project at hand involved an undertaking "which is not among the
regular and primary functions of the agencies involved" since the reforestation activity evaluation group is not, as pointed
out above, a "special project" within the meaning of CPG No. 80-4. In any case, this particular issue was not raised by any
of the parties here involved.
It is true, as respondent COA points out, that the provisions of CPG No. 80-4 do not distinguish between "a special project"
which is funded by monies of local or Philippine origin and "a special project" which is funded or assisted by monies
originating from international or foreign agencies. As earlier noted, CPG No. 80-4 was issued by the Department of Budget
and Management back in 7 August 1980. Upon the other hand, NCC No. 53 was issued also by the Department of Budget
and Management more than eight (8) years later, i.e., 9 December 1988. Examination of the provisions of NCC No. 53
makes it crystal clear that the circular is applicable to foreign-assisted projects only. The explicit text of NCC No. 53 states
that it was issued to
prescribe/authorize the classification and compensation rates of positions in foreign-assisted

projects(FAPs) including honoraria rates for personnel detailed to FAPs and guidelines in the
implementation thereof pursuant to Memorandum No. 173 dated 16 May 1988 19 (Emphasis supplied)
and which apply to all positions in foreign-assisted projects only. Clearly, NCC No. 53 amended the earlier CPG No. 80-4 by
carving out from the subject matter originally covered by CPG No. 80-4 all "foreign-assisted [special] projects." CPG No. 80-
4 was, accordingly, modified so far as "foreign-assisted [special] projects (FAPs)" are concerned. It is this fact or
consequence of NCC No. 53 that respondent COA apparently failed to grasp. Thus, CPG No. 80-4 does not control, nor
even relate to, the DENR evaluation project for at least two (2) reasons: firstly, the evaluation project was not a "special
project" within the meaning of CPG No. 80-4; secondly, that same evaluation project was a Foreign-Assisted Project to
which NCC No. 53 is specifically applicable.
That the instant evaluation project is a Foreign-Assisted Project is borne out by the records: (a) the MOA states that the
project is "part of the commitment with the Asian Development Bank (ADB) under the Forestry Sector Program Loan"; (b)
the certification issued by the DENR certifies that
. . . the review and evaluation of DENR reforestation projects undertaken by State Universities and
Colleges, one of which is Pangasinan State University, is one of the components of the ADB/OECF
Forestry Sector Program Loan which is funded by the loan. It is therefore a
foreign-assisted project (Underscoring supplied); and
(c) the clarification issued by the DBM stating that
The honoraria rates of the detailed personnel should not be based on Compensation Policy Guidelines No.
80-4, which pertains to locally funded projects. Since the funding source for this activity come from loan
proceeds, National Compensation Circular No. 53 should apply.
Even in its Comment respondent COA submits that
. . . the issue as to whether or not the project was special already became moot in the face of the
opinion/ruling of the DBM that since it (the project) is "foreign-assisted" NCC 53 should apply, for CPG No.
80-4 applies only to "locally-funded projects. 20
Under the Administration Code of 1987, the Compensation and Position Classification Bureau of the DBM "shall classify
positions and determine appropriate salaries for specific position classes and review appropriate salaries for specific
position classes and review the compensation benefits programs of agencies and shall design job evaluation
programs." 21 In Warren Manufacturing Workers Union (WMWU) v. Bureau of Labor Relations, 22 the Court held that
"administrative regulations and policies enacted by administrative bodies to interpret the law have the force of law and are
entitled to great respect." It is difficult for the Court to understand why, despite these certifications, respondent COA took
such a rigid and uncompromising posture that CPG No. 80-4 was the applicable criterion for honoraria to be given members
of the reforestation evaluation project team of the PSU.
Respondent COA's contention that the DBM clarification is unconstitutional as that ruling does not fulfill the requisites of a
valid classification 23 is, in the Court's perception, imaginative but nonetheless an after-thought and a futile attempt to justify
its action. As correctly pointed out by petitioner, the constitutional arguments raised by respondent COA here were never
even mentioned, much less discussed, in COA Decisions Nos. 1547 (1990) and 2571 (1992) or in any of the proceedings
conducted before it.
Petitioner also argues that the project's duration stipulated in the MOA was implicitly extended by the parties. The DENR's
acceptance, without any comment or objection, of PSU's (a) letter explaining the delay in its submission of the final project
report and (b) the final project report itself brought about, according to petitioner, an implied agreement between the parties
to extend the project duration. It is also contended that by the very nature of an evaluation project, the project's duration is
difficult to fix and as in the case at bar, the period fixed in the MOA is merely an initial estimate subject to extension. Lastly,
petitioner argues that whether the project was impliedly extended is an inconsequential consideration; the material
consideration being that the project stayed within its budget. The project having been extended, petitioner concludes that
the evaluation team should be paidhonoraria from the time it proceeded with the project and up to the time the DENR
accepted its final report.
Mindful of the detailed provisions of the MOA and Project Proposal governing project duration and project financing as
regulated by NCC No. 53, the Court is not persuaded that petitioner can so casually assume implicit consent on the part of
the DENR to an extension of the evaluation project's duration.
The "Duration of Work" clause of the MOA provides that
PSU shall commence the work 10 days from receipt of the Notice to Proceed and shall be completed five
months thereafter. (Emphasis supplied)
On 9 December 1988, the DENR advised PSU President Rufino Eslao that PSU "may now proceed with the review
and reevaluation as stipulated" in the MOA. The Notice to Proceed further stated that
Your institution is required to complete the work within five months starting ten (10) days upon receipt of
this notice. (Emphasis supplied)
In respect of the financial aspects of the project, the MOA provides that
The DENR shall have the following obligations:
1. Provide the funds necessary for the review and reevaluation of the eleven (11) reforestation projects . . .
in the amount not more than FIVE HUNDRED SIX THOUSAND TWO HUNDRED TWENTY FOUR PESOS
(P506,224.00) which shall be spent in accordance with the work and financial plan which attached as
Annex C. Fund remittances shall be made on a staggered basis with the following schedule:
a. FIRST RELEASE
Twenty percent (20%) of the total cost to be remitted within fifteen (15) working days upon submission of
work plan;
b. SECOND RELEASE
Forty percent of the total cost upon submission of a progress report of the activities that were so far
undertaken;
c. THIRD RELEASE
Thirty percent (30%) of the total amount upon submission of the draft final report;
d. FOURTH RELEASE
Ten percent of the total amount [upon submission] of the final report. (Underscoring supplied)
Annex "C" referred to in the MOA is the Project Proposal. Per the Proposal's "Budget Estimate," P175,000.00 and
P92,500.00 were allotted for "Expert Services" and "Support Services" respectively itemized as follows:
PERSONAL SERVICES
EXPERT SERVICES
Duration
Expert of Service Rate/ Total
(mo.) mo.
1. Ecologist 4 P5,000 P20,000
2. Silviculturist 3 -do- 15,000

3. Forestry Economist 4 -do- 20,000
4. Soils Expert 2 -do- 10,000
5. Social Forestry Expert 4 -do- 20,000
6. Management Expert 2 -do- 10,000
7. Horticulturist 2 -do- 10,000
8. Agricultural Engineer 2 -do- 10,000
9. Systems Analysts/Programer 2 -do- 10,000
10. Statistician 2 -do- 10,000
11. Shoreline Resources Expert 2 -do- 10,000
12. Animal Science Specialist 2 -do- 10,000
13. Policy/Administrative 4 -do- 20,000
Expert
T O T A L P175,000
Support Services
Research Associates (2) P8,000

Honorarium P1,000/mo. for 4 months
Special Disbursing Officer (1) 4,000
Honorarium P1,000/mo. for 4 months
Enumerators/Data Gatheres 36,000
360 mandays at P100/manday
including COLA
Coders/Encoders 30,000
including COLA
Cartographer/Illustrator 5,000
including COLA
Documentalist 4,500
including COLA
Typist 5,000
including COLA
T O T A L P92,500

In addition, the Proposal already provided a list of identified experts:
EXPERTS
1. Dr. Victorino P. Espero Enviromental Science

2. Dean Antonio Q. Repollo Silviculture
3. Prof. Artemio M. Rebugio Forestry Economics
4. Ms. Naomenida Olermo Soils
5. Dr. Elvira R. Castillo Social Forestry
6. Dr. Alfredo F. Aquino Management
7. Dr. Lydio Calonge Horticulture
8. Engr. Manolito Bernabe Engineering
9. Dr. Elmer C. Vingua Animal Science
10. Prof. Rolando J. Andico Systems Analysts
Programming
11. Dr. Eusebio Miclat, Jr. Statistics/
Instrumentation
12. Dr. Porferio Basilio Shoreline Resources
13. Dr. Rufino O. Eslao Policy Administration
who, together with six (6) staff members namely Henedina M. Tantoco, Alicia Angelo Yolanda Z. Sotelo, Gregoria
Q. Calela, Nora A. Caburnay and Marlene S. Bernebe composed the evaluation project team. At this point, it should
be pointed out that the " Budget Estimate even provides a duration for the participation of each and every person
whether rendering expert or support services.
On the other hand, NCC No. 53 provides:
3.3.1 The approved 0rganization and staffing shall be valid up to project completion except for
modifications deemed necessary by the Project Manager. The Project Manager shall be given the flexibility
to determine the timing of hiring personnel provided the approved man-years for a given position for the
duration of the project is not exceeded.
xxx xxx xxx
3.6 A regular employee who may detailed to any FAPs on a part-time basis shall be entitled to
receive honoraria in accordance with the schedule shown in Attachment II hereof.
xxx xxx xxx
3.7 Payment of honoraria shall be made out of project funds and in no case shall payment thereof be made
out of regular agency fund.
xxx xxx xxx
3.10 The total amount of compensation to be paid shall not exceed the original amount allocated for
personal services of the individual foreign-assisted projects. Any disbursement in excess of the original
amount allotted for personal services of the individual projects shall be the personal liability and
responsibility of the officials and employees authorizing or making such payment. (Underscoring supplied)
Attachment II of NCC No. 53 prescribes the monthly rates allowed for officials/employees on assignment to foreign- assisted
special projects:
A. Position Level Project Manager/Project

Director
Responsibility . . .
Parttime P2,000.00
B. Position Level Assistant Project

Director
Parttime P1,500.00
C. Position Level Project Consultant
Parttime P1,000.00
D. Position Level Supervisor/Senior Staff

Member
Parttime P1,000.00
E. Position Level Staff Member
Parttime P700.00
Administrative and Clerical Support
A. Position Level Administrative Assistant
Parttime P500.00
B. Position Level Administrative Support

Staff
Parttime P400.00
From the clear and detailed provisions of the MOA and Project Proposal in relation to NCC No. 53, consent to any extension
of the evaluation project, in this instance, must be more concrete than the alleged silence or lack of protest on the part of the
DENR. Although tacit acceptance is recognized in our jurisdiction, 24 as a rule, silence is not equivalent to consent since its
ambiguity lends itself to error. And although under the Civil Code there are instances when silence amounts to
consent, 25 these circumstances are wanting in the case at bar. Furthermore, as correctly pointed out by the respondent
COA, the date when the DENR accepted the final project report is by no means conclusive as to the terminal date of the
evaluation project. Examination of the MOA (quoted earlier on pages 19-20) reveals that the submission of reports merely
served to trigger the phased releases of funds. There being no explicit agreement between PSU and the DENR to extend
the duration of the evaluation project, the MOA's "Budget Estimate" which, among others, provides in detail the duration of
service for each member of the evaluation project as amended by the rates provided by NCC No. 53 must be the basis of
the honoraria due to the evaluation team.
The other arguments of respondent COA appear to us to be insubstantial and as, essentially, afterthoughts. The
COA apparently does not agree with the policy basis of NCC No. 53 in relation to CPG No. 80-4 since COA argues
that loan proceeds regardless of source eventually become public funds for which the government is accountable.
The result would be that any provisions under any [foreign] loan agreement should be considered locally-funded.
We do not consider that the COA is, under its constitutional mandate, authorized to substitute its own judgment for
any applicable law or administrative regulation with the wisdom or propriety of which, however, it does not agree, at
least not before such law or regulation is set aside by the authorized agency of government i.e., the courts as
unconstitutional or illegal and void. The COA, like all other government agencies, must respect the presumption of
legality and constitutionality to which statutes and administrative regulations are entitled 26 until such statute or
regulation is repealed or amended, or until set aside in an appropriate case by a competent court (and ultimately
this Court).
Finally, we turn to petitioner's claim for moral damages and reimbursement of legal expenses. We consider that this
claim cannot be granted as petitioner has failed to present evidence of bad faith or tortious intent warranting an
award thereof. The presumption of regularity in the performance of duty must be accorded to respondent COA; its
action should be seen as its effort to exercise (albeit erroneously, in the case at bar) its constitutional power and
duty in respect of uses of government funds and properties.
WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby GRANTED. COA Decisions Nos. 1547 and
2571, respectively dated 18 September 1990 and 16 November 1992, are hereby SET ASIDE. The instant
evaluation project being a Foreign-Assisted Project, the following PSU personnel involved in the project shall be
paid according to the Budget Estimate schedule of the MOA as aligned with NCC No. 53:
A. A. For Experts
Duration Rate/
Expert of month Total
Service (NCC
(mo.) No. 53)
1. Dr. Rufino O. Eslao Policy/Admi- 4 P2,000 P8,000 nistrative

expert*-
2. Dr. Victorino P. Espero Ecologist** 4 1,500 6,000
3. Dean Antonio Q. Repollo Silvicul- 3 1,000 3,000
turist***
4. Prof. Artemio M. Rebugio Forestry 4 1,000 4,000
Economist
5. Ms. Naomenida Olermo Soils Expert 2 1,000 2,000
6. Dr. Elvira R. Castillo Social 4 1,000 4,000
Forestry
Expert
7. Dr. Alfredo F. Aquino Management 2 1,000 2,000
Expert
8. Dr. Lydio Calonge Horticul 2 1,000 2,000
turist
9. Engr. Manolito Bernabe Agricultural 2 1,000 2,000
Engineer
10. Prof. Rolando J. Andico Systems 2 1,000 2,000
Analysts/
Programmer
11. Dr. Eusebio Miclat, Jr. Statistician 2 1,000 2,000
12. Dr. Porferio Basilio Shoreline 2 1,000 2,000
Resources
Expert
13. Dr. Elmer C. Vingua Animal 2 1,000 2,000
Science
Specialist
41,000

* Project Manager/ Project Director

** Assistant Project Director
*** Project Consultants
B. For Support Staff
Duration Rate/
Expert of month Total
Service (NCC
(mo.) No. 53)
1 Henedina M. Tantoco Research 4 700 2,800

Associate**
2 Alicia Angelo Research 4 700 2,800
3 Yolanda Z. Sotelo Documentalist 2.04 700 1,428
4 Gregoria Q. Calela Special 4 700 2,800
Disbursing
Officer
5 Nora A. Caburnay Typist 2.27 500 1,135
6 Marlene S. Bernebe Cashier 2.27 500 1,135

12,098
* Per Attachment to DBM Clarification dated 10

November 1989, Rollo, p. 59.
** Staff Member
*** Administrative Assistants.
No pronouncement as to costs.
SO ORDERED.
FIRST DIVISION
[G.R. No. 119761. August 29, 1996]
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. HON. COURT OF APPEALS, HON. COURT OF TAX
APPEALS and FORTUNE TOBACCO CORPORATION, respondents.
DECISION
VITUG, J.:
The Commissioner of Internal Revenue ("CIR") disputes the decision, dated 31 March 1995, of respondent Court of
Appeals[1] 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. 5015, entitled "Fortune Tobacco Corporation vs. Liwayway Vinzons-Chato in her
capacity as Commissioner of Internal Revenue."
The facts, by and large, are not in dispute.
Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of cigarettes.
On various dates, the Philippine Patent Office issued to the corporation separate certificates of trademark registration
over "Champion," "Hope," and "More" cigarettes. In a letter, dated 06 January 1987, of then Commissioner of Internal
Revenue Bienvenido A. Tan, Jr., to Deputy Minister Ramon Diaz of the Presidential Commission on Good Government, "the
initial position of the Commission was to classify 'Champion,' 'Hope,' and 'More' as foreign brands since they were listed in
the World Tobacco Directory as belonging to foreign companies.However, Fortune Tobacco changed the names of 'Hope' to
Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands from the foreign brand category. Proof was
also submitted to the Bureau (of Internal Revenue ['BIR']) that 'Champion' was an original Fortune Tobacco Corporation
register and therefore a local brand."[3] Ad Valorem taxes were imposed on these brands,[4] at the following rates:
"BRAND AD VALOREM TAX RATE

E.O. 22
06-23-86
07-01-86 and E.O. 273
07-25-87
01-01-88 RA 6956
06-18-90
07-05-90
Hope Luxury M. 100's

Sec. 142, (c), (2) 40% 45%
Hope Luxury M. King
Sec. 142, (c), (2) 40% 45%
More Premium M. 100's
Sec. 142, (c), (2) 40% 45%
More Premium International
Sec. 142, (c), (2) 40% 45%
Champion Int'l. M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. King
Sec. 142, (c), last par. 15% 20%
Champion Lights
Sec. 142, (c), last par. 15% 20%"[5]
A bill, which later became Republic Act ("RA") No. 7654, [6] was enacted, on 10 June 1993, by the legislature and
signed into law, 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 the National Internal Revenue Code ("NIRC") to read; as follows:
"SEC. 142. Cigars and Cigarettes. -
"x x x x x x x x x.
"(c) Cigarettes packed by machine. - There shall be levied, assessed and collected on cigarettes packed by machine a tax
at the rates prescribed below based on the constructive manufacturer's wholesale price or the actual manufacturer's
wholesale price, whichever is higher:
"(1) On locally manufactured cigarettes which are currently classified and taxed at fifty-five percent (55%) or the exportation
of which is not authorized by contract or otherwise, fifty-five (55%) provided that the minimum tax shall not be less than Five
Pesos (P5.00) per pack.
"(2). On other locally manufactured cigarettes, forty-five percent (45%) provided that the minimum tax shall not be less than
Three Pesos (P3.00) per pack.
"x x x x x x x x x.
"When the registered manufacturer's wholesale price or the actual manufacturer's wholesale price whichever is higher of
existing brands of cigarettes, including the amounts intended to cover the taxes, of cigarettes packed in twenties does not
exceed Four Pesos and eighty centavos (P4.80) per pack, the rate shall be twenty percent (20%)." [7] (Italics supplied.)
About a month after the enactment and two (2) days before the effectivity of RA 7654, Revenue Memorandum Circular
No. 37-93 ("RMC 37-93"), was issued by the BIR the full text of which expressed:
"REPUBLIKA NG PILIPINAS
KAGAWARAN NG PANANALAPI
KAWANIHAN NG RENTAS INTERNAS
July 1, 1993
REVENUE MEMORANDUM CIRCULAR NO. 37-93
SUBJECT : Reclassification of Cigarettes Subject to Excise Tax
TO : All Internal Revenue Officers and Others Concerned.

"In view of the issues raised on whether 'HOPE,' 'MORE' and 'CHAMPION' cigarettes which are locally manufactured are
appropriately considered as locally manufactured cigarettes bearing a foreign brand, this Office is compelled to review the
previous rulings on the matter.
"Section 142(c)(1) National Internal Revenue Code, as amended by R.A. No. 6956, provides:
"'On locally manufactured cigarettes bearing a foreign brand, fifty-five percent (55%) Provided, That this rate shall apply
regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local
manufacturer. Whenever it has to be determined whether or not a cigarette bears a foreign brand, the listing of brands
manufactured in foreign countries appearing in the current World Tobacco Directory shall govern."
"Under the foregoing, the test for imposition of the 55% ad valorem tax on cigarettes is that the locally manufactured
cigarettes bear a foreign brand regardless of whether or not the right to use or title to the foreign brand was sold or
transferred by its owner to the local manufacturer. The brand must be originally owned by a foreign manufacturer or
producer. If ownership of the cigarette brand is, however, not definitely determinable, 'x x x the listing of brands
manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. x x x'
"'HOPE' is listed in the World Tobacco Directory as being manufactured by (a) Japan Tobacco, Japan and (b) Fortune
Tobacco, Philippines. 'MORE' is listed in the said directory as being manufactured by: (a) Fills de Julia Reig, Andorra; (b)
Rothmans, Australia; (c) RJR-Macdonald, Canada; (d) Rettig-Strenberg, Finland; (e) Karellas, Greece; (f) R.J. Reynolds,
Malaysia; (g) Rothmans, New Zealand; (h) Fortune Tobacco, Philippines; (i) R.J. Reynolds, Puerto Rico; (j) R.J. Reynolds,
Spain; (k) Tabacalera, Spain; (l) R.J. Reynolds, Switzerland; and (m) R.J. Reynolds, USA. 'Champion' is registered in the
said directory as being manufactured by (a) Commonwealth Bangladesh; (b) Sudan, Brazil; (c) Japan Tobacco, Japan; (d)
Fortune Tobacco, Philippines; (e) Haggar, Sudan; and (f) Tabac Reunies, Switzerland.
"Since there is no showing who among the above-listed manufacturers of the cigarettes bearing the said brands are the real
owner/s thereof, then it follows that the same shall be considered foreign brand for purposes of determining the ad
valorem tax pursuant to Section 142 of the National Internal Revenue Code. As held in BIR Ruling No. 410-88, dated
August 24, 1988, 'in cases where it cannot be established or there is dearth of evidence as to whether a brand is foreign or
not, resort to the World Tobacco Directory should be made.'
"In view of the foregoing, the aforesaid brands of cigarettes, viz: 'HOPE,' 'MORE' and 'CHAMPION' being manufactured by
Fortune Tobacco Corporation are hereby considered locally manufactured cigarettes bearing a foreign brand subject to the
55% ad valorem tax on cigarettes.
"Any ruling inconsistent herewith is revoked or modified accordingly.
(SGD) LIWAYWAY VINZONS-CHATO

Commissioner"
On 02 July 1993, at about 17:50 hours, BIR Deputy Commissioner Victor A. Deoferio, Jr., sent via telefax a copy of
RMC 37-93 to Fortune Tobacco but it was addressed to no one in particular. On 15 July 1993, Fortune Tobacco received,
by ordinary mail, a certified xerox copy of RMC 37-93.
In a letter, dated 19 July 1993, addressed to the appellate division of the BIR, Fortune Tobacco, requested for a
review, reconsideration and recall of RMC 37-93. The request was denied on 29 July 1993. The following day, or on 30 July
1993, the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9,598,334.00.
On 03 August 1993, Fortune Tobacco filed a petition for review with the CTA. [8]
On 10 August 1994, the CTA upheld the position of Fortune Tobacco and adjudged:
"WHEREFORE, Revenue Memorandum Circular No. 37-93 reclassifying the brands of cigarettes, viz: `HOPE,' `MORE' and
`CHAMPION' being manufactured by Fortune Tobacco Corporation as locally manufactured cigarettes bearing a foreign
brand subject to the 55% ad valorem tax on cigarettes is found to be defective, invalid and unenforceable, such that when
R.A. No. 7654 took effect on July 3, 1993, the brands in question were not CURRENTLY CLASSIFIED AND TAXED at 55%
pursuant to Section 1142(c)(1) of the Tax Code, as amended by R.A. No. 7654 and were therefore still classified as other
locally manufactured cigarettes and taxed at 45% or 20% as the case may be.
"Accordingly, the deficiency ad valorem tax assessment issued on petitioner Fortune Tobacco Corporation in the amount of
P9,598,334.00, exclusive of surcharge and interest, is hereby canceled for lack of legal basis.
"Respondent Commissioner of Internal Revenue is hereby enjoined from collecting the deficiency tax assessment made
and issued on petitioner in relation to the implementation of RMC No. 37-93.
"SO ORDERED." [9]
In its resolution, dated 11 October 1994, the CTA dismissed for lack of merit the motion for reconsideration.
The CIR forthwith filed a petition for review with the Court of Appeals, questioning the CTA's 10th August 1994 decision
and 11th October 1994 resolution. On 31 March 1993, the appellate court's Special Thirteenth Division affirmed in all
respects the assailed decision and resolution.
In the instant petition, the Solicitor General argues: That -
"I. RMC 37-93 IS A RULING OR OPINION OF THE COMMISSIONER OF INTERNAL REVENUE INTERPRETING THE
PROVISIONS OF THE TAX CODE.
"II. BEING AN INTERPRETATIVE RULING OR OPINION, THE PUBLICATION OF RMC 37-93, FILING OF COPIES
THEREOF WITH THE UP LAW CENTER AND PRIOR HEARING ARE NOT NECESSARY TO ITS VALIDITY,
EFFECTIVITY AND ENFORCEABILITY.
"III. PRIVATE RESPONDENT IS DEEMED TO HAVE BEEN NOTIFIED OR RMC 37-93 ON JULY 2, 1993.
IV. RMC 37-93 IS NOT DISCRIMINATORY SINCE IT APPLIES TO ALL LOCALLY MANUFACTURED CIGARETTES
SIMILARLY SITUATED AS 'HOPE,' 'MORE' AND 'CHAMPION' CIGARETTES.
"V. PETITIONER WAS NOT LEGALLY PROSCRIBED FROM RECLASSIFYING HOPE, MORE AND CHAMPION
CIGARETTES BEFORE THE EFFECTIVITY OF R.A. NO. 7654.
VI. SINCE RMC 37-93 IS AN INTERPRETATIVE RULE, THE INQUIRY IS NOT INTO ITS VALIDITY, EFFECTIVITY OR
ENFORCEABILITY BUT INTO ITS CORRECTNESS OR PROPRIETY; RMC 37-93 IS CORRECT." [10]
In fine, petitioner opines that RMC 37-93 is merely an interpretative ruling of the BIR which can thus become effective
without any prior need for notice and hearing, nor publication, and that its issuance is not discriminatory since it would apply
under similar circumstances to all locally manufactured cigarettes.
The Court must sustain both the appellate court and the tax court.
Petitioner stresses on the wide and ample authority of the BIR in the issuance of rulings for the effective
implementation of the provisions of the National Internal Revenue Code. Let it be made clear that such authority of the
Commissioner is not here doubted. Like any other government agency, however, the CIR may not disregard legal
requirements or applicable principles in the exercise of its quasi-legislative powers.
Let us first distinguish between two kinds of administrative issuances - a legislative rule and an interpretative rule.
In Misamis Oriental Association of Coco Traders, Inc., vs. Department of Finance Secretary, [11] the Court expressed:
"x x x a legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by providing
the details thereof. In the same way that laws must have the benefit of public hearing, it is generally required that before a
legislative rule is adopted there must be hearing. In this connection, the Administrative Code of 1987 provides:
"Public Participation. - If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of
proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.
"(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a
newspaper of general circulation at least two (2) weeks before the first hearing thereon.
"(3) In case of opposition, the rules on contested cases shall be observed.
"In addition such rule must be published. On the other hand, interpretative rules are designed to provide guidelines to the
law which the administrative agency is in charge of enforcing." [12]
It should be understandable that when an administrative rule is merely interpretative in nature, its applicability needs
nothing further than its bare issuance for it gives no real consequence more than what the law itself has already
prescribed. When, upon the other hand, the administrative rule goes beyond merely providing for the means that can
facilitate or render least cumbersome the implementation of the law but substantially adds to or increases the burden of
those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to
be duly informed, before that new issuance is given the force and effect of law.
A reading of RMC 37-93, particularly considering the circumstances under which it has been issued, convinces us that
the circular cannot be viewed simply as a corrective measure (revoking in the process the previous holdings of past
Commissioners) or merely as construing Section 142(c)(1) of the NIRC, as amended, but has, in fact and most importantly,
been made in order to place "Hope Luxury," "Premium More" and "Champion" within the classification of locally
manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654. Specifically, the new law
would have its amendatory provisions applied to locally manufactured cigarettes whichat the time of its effectivity were not
so classified as bearing foreign brands. Prior to the issuance of the questioned circular, "Hope Luxury," "Premium More,"
and "Champion" cigarettes were in the category of locally manufactured cigarettes not bearing foreign brand subject to
45% ad valorem tax. Hence, without RMC 37-93, the enactment of RA 7654, would have had no new tax rate consequence
on private respondent's products. Evidently, in order to place "Hope Luxury," "Premium More," and "Champion" cigarettes
within the scope of the amendatory law and subject them to an increased tax rate, the now disputed RMC 37-93 had to be
issued. In so doing, the BIR not simply interpreted the law; verily, it legislated under its quasi-legislative authority. The due
observance of the requirements of notice, of hearing, and of publication should not have been then ignored.
Indeed, the BIR itself, in its RMC 10-86, has observed and provided:
"RMC NO. 10-86
Effectivity of Internal Revenue Rules and Regulations
"It has been observed that one of the problem areas bearing on compliance with Internal Revenue Tax rules and regulations
is lack or insufficiency of due notice to the tax paying public. Unless there is due notice, due compliance therewith may not
be reasonably expected. And most importantly, their strict enforcement could possibly suffer from legal infirmity in the light
of the constitutional provision on `due process of law' and the essence of the Civil Code provision concerning effectivity of
laws, whereby due notice is a basic requirement (Sec. 1, Art. IV, Constitution; Art. 2, New Civil Code).
"In order that there shall be a just enforcement of rules and regulations, in conformity with the basic element of due process,
the following procedures are hereby prescribed for the drafting, issuance and implementation of the said Revenue Tax
Issuances:
"(1). This Circular shall apply only to (a) Revenue Regulations; (b) Revenue Audit Memorandum Orders; and (c) Revenue
Memorandum Circulars and Revenue Memorandum Orders bearing on internal revenue tax rules and regulations.
"(2). Except when the law otherwise expressly provides, the aforesaid internal revenue tax issuances shall not begin to be
operative until after due notice thereof may be fairly presumed.
"Due notice of the said issuances may be fairly presumed only after the following procedures have been taken:
"xxx xxx xxx
"(5). Strict compliance with the foregoing procedures is enjoined." [13]
Nothing on record could tell us that it was either impossible or impracticable for the BIR to observe and comply with the
above requirements before giving effect to its questioned circular.
Not insignificantly, RMC 37-93 might have likewise infringed on uniformity of taxation.
Article VI, Section 28, paragraph 1, of the 1987 Constitution mandates taxation to be uniform and equitable. Uniformity
requires that all subjects or objects of taxation, similarly situated, are to be treated alike or put on equal footing both in
privileges and liabilities.[14] Thus, all taxable articles or kinds of property of the same class must be taxed at the same
rate[15] and the tax must operate with the same force and effect in every place where the subject may be found.
Apparently, RMC 37-93 would only apply to "Hope Luxury," Premium More" and "Champion" cigarettes and, unless
petitioner would be willing to concede to the submission of private respondent that the circular should, as in fact my
esteemed colleague Mr. Justice Bellosillo so expresses in his separate opinion, be considered adjudicatory in nature and
thus violative of due process following the Ang Tibay[16]doctrine, the measure suffers from lack of uniformity of taxation. In
its decision, the CTA has keenly noted that other cigarettes bearing foreign brands have not been similarly included within
the scope of the circular, such as -
"1. Locally manufactured by ALHAMBRA INDUSTRIES, INC.
(a) `PALM TREE' is listed as manufactured by office of Monopoly, Korea (Exhibit `R')
"2. Locally manufactured by LA SUERTE CIGAR and CIGARETTE COMPANY

(a) `GOLDEN KEY' is listed being manufactured by United Tobacco, Pakistan (Exhibit `S')
(b) `CANNON' is listed as being manufactured by Alpha Tobacco, Bangladesh (Exhibit `T')
"3. Locally manufactured by LA PERLA INDUSTRIES, INC.
(a) `WHITE HORSE' is listed as being manufactured by Rothman's, Malaysia (Exhibit `U')
(b) `RIGHT' is listed as being manufactured by SVENSKA, Tobaks, Sweden (Exhibit `V-1')
"4. Locally manufactured by MIGHTY CORPORATION
(a) 'WHITE HORSE' is listed as being manufactured by Rothman's, Malaysia (Exhibit 'U-1')
"5. Locally manufactured by STERLING TOBACCO CORPORATION
(a) UNION' is listed as being manufactured by Sumatra Tobacco, Indonesia and Brown and Williamson, USA (Exhibit 'U-3')
(b) WINNER' is listed as being manufactured by Alpha Tobacco, Bangladesh; Nanyang, Hongkong; Joo Lan, Malaysia;
Pakistan Tobacco Co., Pakistan; Premier Tobacco, Pakistan and Haggar, Sudan (Exhibit 'U-4')." [17]
The court quoted at length from the transcript of the hearing conducted on 10 August 1993 by the Committee on Ways and
Means of the House of Representatives; viz:
"THE CHAIRMAN. So you have specific information on Fortune Tobacco alone. You don't have specific information on other
tobacco manufacturers.Now, there are other brands which are similarly situated. They are locally manufactured bearing
foreign brands. And may I enumerate to you all these brands, which are also listed in the World Tobacco Directory x x
x. Why were these brands not reclassified at 55 if your want to give a level playing field to foreign manufacturers?
"MS. CHATO. Mr. Chairman, in fact, we have already prepared a Revenue Memorandum Circular that was supposed to
come after RMC No. 37-93 which have really named specifically the list of locally manufactured cigarettes bearing a foreign
brand for excise tax purposes and includes all these brands that you mentioned at 55 percent except that at that time, when
we had to come up with this, we were forced to study the brands of Hope, More and Champion because we were given
documents that would indicate the that these brands were actually being claimed or patented in other countries because we
went by Revenue Memorandum Circular 1488 and we wanted to give some rationality to how it came about but we couldn't
find the rationale there. And we really found based on our own interpretation that the only test that is given by that existing
law would be registration in the World Tobacco Directory. So we came out with this proposed revenue memorandum
circular which we forwarded to the Secretary of Finance except that at that point in time, we went by the Republic Act 7654
in Section 1 which amended Section 142, C-1, it said, that on locally manufactured cigarettes which are currently classified
and taxed at 55 percent. So we were saying that when this law took effect in July 3 and if we are going to come up with this
revenue circular thereafter, then I think our action would really be subject to question but we feel that . . . Memorandum
Circular Number 37-93 would really cover even similarly situated brands. And in fact, it was really because of the study, the
short time that we were given to study the matter that we could not include all the rest of the other brands that would have
been really classified as foreign brand if we went by the law itself. I am sure that by the reading of the law, you would
without that ruling by Commissioner Tan they would really have been included in the definition or in the classification of
foregoing brands.These brands that you referred to or just read to us and in fact just for your information, we really came out
with a proposed revenue memorandum circular for those brands. (Italics supplied)
"Exhibit 'FF-2-C', pp. V-5 TO V-6, VI-1 to VI-3).
"x x x x x x x x x.
"MS. CHATO. x x x But I do agree with you now that it cannot and in fact that is why I felt that we . . . I wanted to come up
with a more extensive coverage and precisely why I asked that revenue memorandum circular that would cover all those
similarly situated would be prepared but because of the lack of time and I came out with a study of RA 7654, it would not
have been possible to really come up with the reclassification or the proper classification of all brands that are listed there. x
x x' (italics supplied) (Exhibit 'FF-2d', page IX-1)
"x x x x x x x x x.
"HON. DIAZ. But did you not consider that there are similarly situated?
"MS. CHATO. That is precisely why, Sir, after we have come up with this Revenue Memorandum Circular No. 37-93, the
other brands came about the would have also clarified RMC 37-93 by I was saying really because of the fact that I was just
recently appointed and the lack of time, the period that was allotted to us to come up with the right actions on the matter, we
were really caught by the July 3 deadline. But in fact, We have already prepared a revenue memorandum circular clarifying
with the other . . . does not yet, would have been a list of locally manufactured cigarettes bearing a foreign brand for excise
tax purposes which would include all the other brands that were mentioned by the Honorable Chairman. (Italics supplied)
(Exhibit 'FF-2-d,' par. IX-4)."18
All taken, the Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and effective
administrative issuance.
WHEREFORE, the decision of the Court of Appeals, sustaining that of the Court of Tax Appeals, is AFFIRMED. No
costs.
SO ORDERED.
EN BANC
[G.R. No. 129958. November 25, 1999]
MIGUEL MELENDRES, JR., petitioner, vs. THE COMMISSION ON ELECTIONS and RUPERTO P.
CONCEPCION,respondents.
DECISION
YNARES-SANTIAGO, J.:
Challenged in this petition for certiorari is the Resolution[1] of the respondent Commission on Elections (COMELEC)
dated July 17, 1997, in SPR No. 16-97 entitled Ruperto P. Concepcion, Petitioner v. Hon. Maria Cristina Cornejo, Presiding
Judge, Branch 66, MTC, Pasig City and Miguel Melendres, Jr., Respondents the dispositive portion of which reads:
WHEREFORE, the questioned Orders of public respondent are hereby set aside for being NULL and VOID. The public
respondent is hereby ordered to cease and desist from further acting on Election Case No. 083-97 entitled Miguel
Melendres, Jr. v. Ruperto Concepcion.
SO ORDERED.
Petitioner alleges that the COMELEC gravely abused its discretion in issuing and promulgating ex parte the assailed
resolution without complying with the provisions of Sections 5 and 6 of Rule 28, Section 1 of Rule 10, Sections 1 to 6 of
Rule 14, Sections 1 to 4 of Rule 17 and Section 9 of Rule 18, all of the COMELEC Rules of Procedure.
The factual antecedents of the controversy which are matters of record have been summed thus by the COMELEC:
Petitioner (herein private respondent Ruperto P. Concepcion) and private respondent (herein petitioner Miguel Melendres,
Jr.) were candidates for the position of Barangay Chairman of Barangay Caniogan, Pasig City, in the May 12, 1997
barangay elections. After the counting of the votes, petitioner (Concepcion) was proclaimed as the duly elected Barangay
Chairman. On May 21, 1997, private respondent (Melendres) filed an election protest against petitioner (Concepcion) with
the Metropolitan Trial Court of Pasig City, contesting therein the results of the election in all forty-seven (47) precincts of
said barangay. The case was assigned to Branch 68.
On June 4, 1997, after the preliminary hearing of the election case, it was shown that no filing or docket fee was paid by the
protestant therein, which payment is required in the COMELEC Rules of Procedure, Rule 37, Sec. 6. Petitioner Concepcion
moved to dismiss the case on the ground of failure to comply with this requirement. In the contested Order, public
respondent denied the motion to dismiss on the ground that the requirement of payment of filing or docket fee is merely an
administrative procedural matter and [is] not jurisdictional. Petitioner presented an oral motion for reconsideration of the
Order, which oral motion was promptly denied by public respondent. Consequently, the contested ballots were scheduled
for review.
On June 16, 1997, Concepcion filed this instant case for Certiorari and Prohibition, with a prayer for a Temporary
Restraining order and/or Preliminary Injunction. On June 25, 1997, he filed an Urgent Motion for Immediate Issuance of a
Temporary Restraining Order to temporarily restrained (sic) public respondent from commencing with the revision [of the
ballots], pending the hearing of the petition, in order to maintain the status quo and in order that the issues raised and the
prayer stated in the petition may not become moot and academic; xxx The move was prompted by the Order issued by the
public respondent on June 6, 1997, which deferred the revision of ballots to give way to the petition for certiorari brought to
this Commission, as it involves a question of the courts jurisdiction. The order also stated that, as agreed upon by both
parties, if no injunction is issued by the end of June, 1997, the revision of ballots would proceed.
On July 1, 1997, public respondent issued another Order scheduling the revision of ballots on July 9, considering that no
injunctive writ was issued by the Commission. Consequently, on July 7, 1997, the latter filed a Second Urgent Motion for
Immediate Issuance of a Temporary Restraining Order with this Commission.
On the same day, respondent Melendres filed with the Commission a Manifestation wherein he claimed that the contested
issue of non-payment of filing fee was now moot and academic as the same had been paid on June 6, 1997, ten days
before this petition was filed.
On the basis of the foregoing factual recital, respondent COMELEC rendered the challenged Order nullifying the orders
of the public respondent in SPR No. 16-97.
Asserting that the COMELEC acted with grave abuse of discretion amounting to lack or excess of jurisdiction,
petitioner contends that public respondent erred
14.1 in disregarding and violating its own rules, specifically Section 5, Rule 28 of the COMELEC RULES OF PROCEDURE,
in not issuing and serving an order requiring the Respondents to answer the petition filed before it;
14.2 in disregarding and violating its own rules, specifically Section 1, Rule 10 of the COMELEC RULES OF PROCEDURE,
in not issuing and serving the Summons and COPY OF THE PETITION to the Respondents, both private and public, in SPR
16-97;
14.3 in disregarding and violating its own rules, specifically the provisions of Sections 2 to 6, Rule 14 of the COMELEC
RULES OF PROCEDURE requiring the issuance, service and proof of service of summons to the respondents in SPR 16-
97;
14.4 In disregarding and violating its own rules, specifically Section 6, Rule 28 and Sections 1 to 4, Rule 17, when it did not
set or conduct any hearing in SPR 16-97;
14.5 in disregarding and violating its own rules when it promulgated the questioned Resolution despite the clear provision of
Section 6, Rule 28, that it shall render judgment only AFTER SUCH HEARING;
14.6 in disregarding and violating its own rules, specifically Section 9 (a), Rule 18 of the COMELEC RULES OF
PROCEDURE, when it issued the questioned Resolution even though SPR 16-97 is not yet DEEMED SUBMITTED FOR
DECISION;
14.7 in resolving the Petition (SPR 16-97) without a hearing, when Respondent Concepcion himself requests for a decision
on his petition AFTER HEARING;
14.8 in acting on the Petition for Certiorari raised by Respondent Concepcion even though it involves the denial of his
Motion to Dismiss by the lower Court, a PROHIBITED PLEADING under Section 1, Rule 13 of the COMELEC RULES OF
PROCEDURE;
14.9 in ruling on the issue of non-payment of filing fee, when said issue was never raised as a Special or Affirmative
Defense in the Answer of Respondent Concepcion;
14.10 in circumventing its own rules when it allowed the issue of non-payment of filing fee to be discussed even if the same
was not raised in the Answer, but only in a Motion to Dismiss, a prohibited pleading under the RULES;
14.11 in applying the case of Gatchalian v. Court of Appeals[2] even if the Gatchalian case involves the NON-PAYMENT of
filing fee, whereas SPR 16-97 involves the WILLFUL REFUSAL of the Clerk of Court to accept the payment of filing fee;
14.12 in applying the Gatchalian case notwithstanding FULL PAYMENT made by the Petitioner following a lawful order of
the Court;
14.13 in ignoring the real issue in SPR 16-97, which is the right and the authority of the lower court to order the Clerk of
Court to accept the payment of the filing fee in protest cases;
14.14 in overturning the doctrine consistently laid down by the Supreme Court in a long line of decisions that election cases
must be construed liberally to the end that the will of the people in the choice of public officials may not be defeated by mere
technical objections; and
14.15 in not applying the decision of the Supreme Court in the case of Rodillas v. Commission on Elections[3] consistent
with the provisions of Section 18 of Rule 42 of the COMELEC RULES OF PROCEDURES.
The Court issued a Resolution dated September 14, 1999 which, among others, gave due course to the petition and
required the parties to submit their respective memoranda within thirty (30) days from notice. However, in view of petitioners
Urgent Motion for Early Resolution[4] and private respondents Comment[5] thereon, echoing petitioners desire that the
petition be immediately resolved in order that the issues raised may be finally put to rest, the Court deemed it to the best
interest of justice to dispense with the filing of the said memoranda and to forthwith decide the questions raised on the basis
of the parties pleadings.
The issues raised here boils down to whether or not: 1.] the payment of the filing fee in an election protest is a
jurisdictional requirement and non-compliance can be a valid basis for the dismissal of the protest; 2.] subsequent full
payment of the filing fee after the lapse of the reglementary period will cure the jurisdictional defect; and, 3.] public
respondent observed due process prior to the promulgation of the questioned resolution in SPR No. 16-97.
With regard to the first issue, it appears from the record that private respondent was proclaimed as the duly
elected Punong Barangay of BarangayCaniogan, Pasig City on May 12, 1997.[6] On May 21, 1997, petitioner filed an
election protest challenging the results of the barangay elections with the Metropolitan Trial Court of Pasig City where the
same was docketed as Election Protest Case No. 083-97 and raffled to Branch 68 of said court.
On June 4, 1997, after the preliminary hearing of the case, it was shown that no filing or docket fee was paid by
petitioner/protestant,[7] prompting private respondent/protestee to move for the dismissal of the election protest on the
ground of lack of jurisdiction for failure to comply with the jurisdictional requirement of payment of filing fee as required
under Section 6, Rule 37 of the COMELEC Rules of Procedure which provides that
SEC. 6. Filing fee. No protest shall be given due course without the payment of a filing fee of One Hundred Pesos (P100.00)
and the legal research fee as required by law. (Emphasis supplied).
On June 5, 1997, the Presiding Judge of the Metropolitan Trial Court of Pasig City, Branch 68, issued an Order which
reads:
Upon verification with the Clerk of Court, Metropolitan Trial Court of Pasig City, it was found out that indeed, no filing fee
was paid for this petition, as none was collected by the Clerk of Court from all those who filed election protests.
Be that as it may, the question raised in this case is whether or not compliance with Sec. 6, Rule 37 of the COMELEC Rules
of Procedure is jurisdictional.
In ordinary civil actions to which the Revised Rules of Court and other related doctrines apply, the court acquires jurisdiction
over the case only upon payment of the filing fee. It should be noted, however, that the instant case is not an ordinary action
but an election case. By express provision of Rule 143, the Revised Rules of Court shall not apply to election cases except
by analogy or in a suppletory character whenever practicable and convenient.Suffice it to say that the suppletory character
is applied only when a law or Rule in question is silent on the matter in contention. The COMELEC Rule in question is,
however, explicit. Under the circumstances, the Revised Rules of Court and its related doctrines do not apply to this case.
As afore-cited, the COMELEC Rule in question (Sec. 6, Rule 37) is explicit. The Rule does not speak of conferment of
jurisdiction upon the Court or the acquisition by the Court of jurisdiction upon payment of the filing fee. Nothing extant in the
COMELEC Rules either expressly or by implication requires the payment of the filing fee for purposes of conferment upon
or acquisition by the Court of jurisdiction over the case. The Rule speaks only of giving due course to the protest upon the
payment of the filing fee. Undeniably therefore, the payment of the filing fee is an administrative procedural matter,
proceeding as it does from an administrative body.
Due course has been given to this protest when it was accepted for filing by the Clerk of Court without payment of the filing
fee. There was an honest error of omission on the part of the Clerk of Court as evidenced by the fact that all the other
election protests were accepted for filing by the Clerk of Court without the payment of filing fee. This petition was no
exception. There simply was an administrative procedural lapse but which does not detract from the fact that the Court has
jurisdiction over this case as conferred upon it by substantive law, the Omnibus Election Code.
The Court had acquired jurisdiction over the case. The jurisdiction of the Court over a contest attaches when motion
containing the proper jurisdictional averments is filed within the time prescribed by law; the jurisdiction of the Court cannot
thereafter be determined by law; what the law itself may do or may not do (Lucero vs. De Guzman, 46 Phil. 852). The
payment of the filing fee is not one of the jurisdictional facts required to be alleged in the petition.At any rate, the sufficiency
of the allegations in the petition is not essential for the acquisition of jurisdiction (which had already been acquired by the
filing of the petition, as afore-cited), but only to continue in its exercise, once it has been acquired (Santiago vs. Ignacio, 52
Phil. 376).
It is axiomatic that an election contest, involving as it does not only the adjudication and settlement of private interests of the
rival candidates but also the paramount need of dispelling once and for all the uncertainty that beclouds the real choice of
the electorate with respect to who shall discharge the prerogative of the officers within their girt, is a proceeding imbued with
public interest which raises it onto a plane over and above ordinary civil actions.For this reason, broad perspective[s] of
public policy impose upon the Courts the imperative duty to ascertain by all means within their command who is the real
candidate elected in an expeditious manner as possible, without being fettered in technicalities and procedural barriers to
the end that the will of the people may not be frustrated (Sibulo vda. de Mesa, et al. vs. Hon. Eulogio Mencias, et al. Oct. 29,
1966, citing Ibasco vs. Ilao, et al., Dec. 20, 1960.)
On the basis of all the foregoing considerations, it is resolved that the payment of the filing of fee for purposes of an election
protest and counter-protest is not jurisdictional and, hence, non-compliance therewith at the outset will not operate to
deprive the Court of jurisdiction conferred upon it by law and acquired pursuant to the Rules. Accordingly, the Motion to
Dismiss the instant petition is hereby denied.
The herein protestant is hereby directed to pay the filing fee of P100.00 with respect to his protest, and the protestee is
directed to pay the filing fee with respect to his counter-protest.[8]
Aggrieved, private respondent filed on June 16, 1997 a petition for certiorari and prohibition with respondent
Commission on Elections (COMELEC), docketed as SPR No. 16-97 entitled Ruperto P. Concepcion, Petitioner v. Hon.
Maria Cristina Cornejo and Miguel Melendres, Jr.,Respondents.
The COMELEC overruled the assailed Order of the Metropolitan Trial Court reasoning as follows:
Petitioner contends that public respondent committed grave abuse of discretion amounting to lack of jurisdiction in not
dismissing the election protest for failing to comply with the required payment of filing and legal research fees as prescribed
in the COMELEC Rules of Procedure, such requirement being jurisdictional, as opposed to the contention of public
respondent. The COMELEC Rules of Procedure, Rule 37, Sec. 6, states:
Sec. 6. Filing fee. No protest shall be given due course without the payment of a filing fee of One Hundred Pesos (P100.00)
and the legal research fee as required by law. (Emphasis supplied).
There is no denying private respondents failure to comply with this requirement, given the certification of the Clerk of Court
of Branch 68. Melendres failure to pay said fee at the time the election protest was filed is also clear from the questioned
Order and in the July 7, 1997 Manifestation of Concepcion filed with this Commission. Hence, the contested Orders must be
reversed.
In Gatchalian v. Court of Appeals,[9] the Supreme Court has stated clearly that [i]t is the payment of the filing fee that vests
jurisdiction of the court over the election protest xxx. In the case of Pahilan v. Tabalba,[10] the Court recognized a distinction
between the partial payment of filing fees and the complete absence of such payment. If there is complete absence of
payment, the case is not given due course. The court entertained the case because there was, at least incomplete payment
of the filing fees. The Court compared this to the case of Malimit v. Degamo[11] wherein there was no payment of the fees at
all. The Supreme Court stated therein that [b]efore the payment of the docket fees, the case is not deemed duly registered
and docketed.[12]
The ruling in Sun Insurance Office Ltd. v. Asuncion[13] is a prelude to the Pahilan ruling. There was likewise an incomplete
payment of the said fees inSun Insurance, and the
subsequent payment of the correct [amount was allowed] provided it is within the reglementary period or before prescription
has set in xxx [and that] there was no intent on the part of the petitioners therein to defraud the government xxx[14]
The requirement of payment of filing fees is not, therefore, a mere procedural matter but is, rather, jurisdictional. The
Metropolitan Trial Court of Pasig City, Branch 68 could not be said to have acquired jurisdiction despite the complete failure
of the private respondent to pay the said fees.
Private respondent claims that the payment of the filing fee ten (10) days before this petition was filed, rendered the same
moot and academic. This is untenable. The Rules of Procedure of the Commission, in Sec. 6 of Rule 37 requires the
payment of the filing fee of one hundred pesos for the proper court to acquire jurisdiction. However, this has to be read in
conjunction with Sec. 4 of the same rule:
Sec. 4. Period within which to file petition. The petition shall be filed within ten (10) days after the proclamation.
Given the cited rulings of the Supreme Court above, especially those in the Malimit and Gatchalian cases, such late
payment does not vest any jurisdiction upon the Metropolitan Trial Court of Pasig City, Branch 68, said payment having
been made beyond the period prescribed.
It needs be stressed that the power of administrative agencies to promulgate rules in the implementation of a statute is
necessarily limited to what is provided for in the legislative enactment. [15] However, [A] long line of cases establish the basic
rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under the special technical knowledge and training of such
agencies.[16] More explicitly
Generally, the interpretation of an administrative government agency, which is tasked to implement a statute, is accorded
great respect and ordinarily controls the construction of the courts. [17] The reason behind this rule was explained in Nestle
Philippines, Inc. vs. Court of Appeals,[18] in this wise:
The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society
and the establishment of diverse administrative agencies for addressing and satisfying those needs; it also relates to the
accumulation of experience and growth of specialized capabilities by the administrative agency charged with implementing
a particular statute. In Asturias Sugar Central, Inc. v. Commissioner of Customs[19] the Court stressed that executive officials
are presumed to have familiarized themselves with all the considerations pertinent to the meaning and purpose of the law,
and to have formed an independent, conscientious and competent expert opinion thereon. The courts give much weight to
the government agency or officials charged with the implementation of the law, their competence, expertness, experience
and informed judgment, and the fact that they frequently are drafters of the law they interpret.
As a general rule, contemporaneous construction is resorted to for certainty and predictability in the laws,[20] especially
those involving specific terms having technical meanings.
However, courts will not hesitate to set aside such executive interpretation when it is clearly erroneous, or when there is no
ambiguity in the rule,[21] or when the language or words used are clear and plain or readily understandable to any ordinary
reader.[22]
Stated differently, when an administrative agency renders an opinion or issues a statement of policy, it merely
interprets a pre-existing law and the administrative interpretation is at best advisory for it is the courts that finally determine
what the law means.[23] Thus an action by an administrative agency may be set aside by the judicial department if there is
an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of
the law.[24]
However, there is no cogent reason to depart from the general rule because the findings of the COMELEC conforms to
rather than conflicts with the governing statute and controlling case law on the matter.
It will be observed that the order of the Metropolitan Trial Court was challenged on certiorari before respondent
COMELEC because private respondents motion to dismiss was denied on the basis of the trial courts observation that the
non-payment of filing fees is not jurisdictional but is merely an administrative matter which did not affect its jurisdiction.
This ruling of the trial court directly contravenes this Courts explicit pronouncement in Gatchalian v. Court of
Appeals[25] declaring in no uncertain terms that
It is the payment of the filing fee that vests jurisdiction of the court over the election protest, not the payment of the
docket fees for the claim of damages and attorneys fees. For failure to pay the filing fee prescribed under Section 9, Rule 35
of the COMELEC Rules of Procedure, [n]o protest xxx shall be given due course without the payment of a filing fee in the
amount of Three Hundred Pesos (P300.00) for each interest. (Emphasis and italics supplied.)
Apropos the second issue, the subsequent payment of the filing fee on June 6, 1997 will not extricate petitioner from
his predicament considering that before the payment of the filing fee, a case is not deemed duly registered and
docketed.[26] In other words, the date of the payment of the filing fee is deemed the actual date of the filing of the election
protest and, viewed vis--vis Section 3, Rule 35 of the COMELEC Rules of Procedure which provides that
SEC. 3. Period to file petition. The petition shall be filed within ten (10) days following the date of proclamation of the results
of the election.
the subsequent payment of the filing fee on June 6, 1997 did not cure the jurisdictional defect because the said date which
is deemed the actual date of filing the election protest is twenty-five (25) days after the proclamation of the results of the
election on May 12, 1997 and, needless to state, way beyond the ten-day reglementary period to file the same. In this
regard, it bears stressing that
The rule prescribing the ten-day period is mandatory and jurisdictional and the filing of an election protest beyond the
period deprives the court of jurisdiction over the protest.[27] Violation of this rule should not be taken lightly nor should it be
brushed aside as a mere procedural lapse that can be overlooked. The rule is not a mere technicality but an essential
requirement, the non-compliance of which would oust the court of jurisdiction over the case.
In Lim vs.COMELEC,[28] citing Kho vs. COMELEC,[29] this court reiterated the long standing rule that a counterprotest must
be filed within the period provided by law, otherwise, the court acquires no jurisdiction to entertain it. [30]
Relatedly, if the docket fees are not fully paid on time, even if the election protest is timely filed, the court is
deprived of jurisdiction over the case.[31](Emphasis and italics supplied).
Neither can petitioner seek refuge behind his argument that the motion to dismiss filed by private respondent is a
prohibited pleading under Section 1, Rule 13 of the COMELEC Rules of Procedure because the said provision refers to
proceedings filed before the COMELEC. The applicable provisions on the matter are found in Part VI of the Rules of
Procedure titled PROVISIONS GOVERNING ELECTION CONTESTS BEFORE TRIAL COURT and as this Court pointedly
stated in Aruelo v. Court of Appeals:[32]
It must be noted that nowhere in Part VI of the COMELEC Rules of Procedure is it provided that motions to dismiss and bill
of particulars are not allowed in election protests or quo warranto cases pending before regular courts.
Constitutionally speaking, the COMELEC cannot adopt a rule prohibiting the filing of certain pleadings in the regular
courts. The power to promulgate rules concerning pleadings, practice and procedure in all courts is vested on the Supreme
Court.[33] (Emphasis and italics supplied)
The grounds relied upon to support his position in the third issue is, likewise, no refuge for petitioner who insists that
public respondent denied him his right to due process by violating its own rules. More specifically, petitioner contends that
the COMELEC did not comply with the requirements regarding the issuance and service of summons and conducting
hearings for the purpose of receiving evidence under Rule 14 of the COMELEC Rules.Petitioners arguments along this line
fails to persuade. It must be borne in mind that the assailed order of the Metropolitan Trial Court was elevated to the
COMELEC by way of certiorari. Section 1, Rule 14 does not require the issuance and service of summons in cases
involving appeals from the decisions of the courts in election protests, special actions, special cases, special reliefs and
special proceedings, viz:
SEC. 1. Clerk to issue summons. Unless otherwise provided herein, the Clerk of Court concerned shall issue the
corresponding summons to the protestee or repondent within three (3) days following the filing of a protest or petition in
ordinary actions except appeals from decisions of courts in election protest cases, in special actions, special cases, special
reliefs and in special proceedings.
In relation to the foregoing, Section 4, Rule 28 of the COMELEC Rules provides that:
SEC. 4. Duty of Clerk of Court of the Commission. Upon the filing of the petition, the Clerk of Court shall calendar the case
for an en banc ex parte hearing of the Commission to determine if it is sufficient in form and substance. (Emphasis and
italics supplied).
It can be clearly gleaned from these complementing provisions of Section 4, Rule 28 that the petitioner has no right to
require the COMELEC to first hear and receive evidence before deciding the merits of the petition for certiorari.
At any rate, petitioner can hardly feign denial of due process given the prevailing facts of this case. It appears from the
record that on June 16, 1997, before filing with the COMELEC the petition for certiorari challenging the validity of the
Metropolitan Trial Courts order, petitioner was furnished a copy of the said petition by registered mail. In fact, no less than
petitioner himself expressly admits in the petition[34] that he received a copy of the petition for certiorari and prohibition on
June 19, 1997 or three (3) days after the filing thereof with respondent COMELEC. It must be remembered that a formal
notice would have been an idle ceremony where an adverse party, as in this case, had actual knowledge of the
proceedings.[35]
What, however, spells finis to any further pretensions of petitioner that he was neither afforded an opportunity to be
heard nor was jurisdiction acquired over his person is his filing on June 23, 1997 of an exhaustive Comment [36] to the
petition. Petitioner, in filing the said pleading, submitted himself to the jurisdiction of respondent COMELEC because as has
been consistently held in a litany of cases, jurisdiction over a party is acquired either by coercive process, generally by
service of summons, or by voluntary appearance.[37] In other words, the filing of the Comment as well as a Manifestation
subsequently filed on July 7, 1997[38] cured the lack of summons considering that [V]oluntary appearance is equivalent to
service of summons, in fact it even cures the defect of summons.[39]
Finally, with regard to the requisite of hearing, suffice it to state that
A formal trial-type hearing is not at all times and in all instances essential to due process. It is enough that the parties are
given a fair and reasonable opportunity to explain their respective sides of the controversy and to present evidence on
which a fair decision can be based xxx.
xxx xxx xxx
Commenting on the same topic, we said earlier in Zaldivar vs. Sandiganbayan[40]
Due process as a constitutional precept does not, always and in all situations, require a trial-type proceedings. The essence
of due process is to be found in the reasonable opportunity to be heard and to submit any evidence one may have in
support of ones defense. To be heard does not only mean verbal arguments in court. One may also be heard through
pleadings where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of
due process.[41]
All told, the issue of jurisdiction was rendered moot by petitioners active participation in the proceedings below[42] and
such active participation of the petitioner against whom the action was brought is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court
or bodys jurisdiction.[43]
WHEREFORE, in view of all the foregoing, the petition is DISMISSED for lack of merit.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-19337 September 30, 1969
ASTURIAS SUGAR CENTRAL, INC., petitioner,

vs.
COMMISSIONER OF CUSTOMS and COURT OF TAX APPEALS, respondents.
Laurea, Laurea and Associates for petitioner.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Esmeraldo Umali and Solicitor Sumilang V.
Bernardo for respondents.
CASTRO, J.:
This is a petition for review of the decision of the Court of Tax Appeals of November 20, 1961, which denied recovery of the
sum of P28,629.42, paid by the petitioner, under protest, in the concept of customs duties and special import tax, as well as
the petitioner's alternative remedy to recover the said amount minus one per cent thereof by way of a drawback under sec.
106 (b) of the Tariff and Customs Code.
The petitioner Asturias Sugar Central, Inc. is engaged in the production and milling of centrifugal sugar for exert, the sugar
so produced being placed in containers known as jute bags. In 1957 it made two importations of jute bags. The first
shipment consisting of 44,800 jute bags and declared under entry 48 on January 8, 1967, entered free of customs duties
and special import tax upon the petitioner's filing of Re-exportation and Special Import Tax Bond no. 1 in the amounts of
P25,088 and P2,464.50, conditioned upon the exportation of the jute bags within one year from the date of importation. The
second shipment consisting of 75,200 jute bags and declared under entry 243 on February 8, 1957, likewise entered free of
customs duties and special import tax upon the petitioner's filing of Re-exportation and Special Import Tax Bond no. 6 in the
amounts of P42,112 and P7,984.44, with the same conditions as stated in bond no. 1.
Of the 44,800 jute bags declared under entry 48, only 8,647 were exported within one year from the date of importation as
containers of centrifugal sugar. Of the 75,200 jute bags declared under entry 243, only 25,000 were exported within the said
period of one year. In other words, of the total number of imported jute bags only 33,647 bags were exported within one
year after their importation. The remaining 86,353 bags were exported after the expiration of the one-year period but within
three years from their importation.
On February 6, 1958 the petitioner, thru its agent Theo. H. Davies & Co., Far East, Ltd., requested the Commissioner of
Customs for a week's extension of Re-exportation and Special Import Tax Bond no. 6 which was to expire the following day,
giving the following as the reasons for its failure to export the remaining jute bags within the period of one year: (a) typhoons
and severe floods; (b) picketing of the Central railroad line from November 6 to December 21, 1957 by certain union
elements in the employ of the Philippine Railway Company, which hampered normal operations; and (c) delay in the arrival
of the vessel aboard which the petitioner was to ship its sugar which was then ready for loading. This request was denied by
the Commissioner per his letter of April 15, 1958.
Due to the petitioner's failure to show proof of the exportation of the balance of 86,353 jute bags within one year from their
importation, the Collector of Customs of Iloilo, on March 17, 1958, required it to pay the amount of P28,629.42 representing
the customs duties and special import tax due thereon, which amount the petitioner paid under protest.
In its letter of April 10, 1958, supplemented by its letter of May 12, 1958, the petitioner demanded the refund of the amount
it had paid, on the ground that its request for extension of the period of one year was filed on time, and that its failure to
export the jute bags within the required one-year period was due to delay in the arrival of the vessel on which they were to
be loaded and to the picketing of the Central railroad line. Alternatively, the petitioner asked for refund of the same amount
in the form of a drawback under section 106(b) in relation to section 105(x) of the Tariff and Customs Code.
After hearing, the Collector of Customs of Iloilo rendered judgment on January 21, 1960 denying the claim for refund. From
his action, appeal was taken to the Commissioner of Customs who upheld the decision of the Collector. Upon a petition for
review the Court of Tax Appeals affirmed the decision of the Commissioner of Customs.
The petitioner imputes three errors to the Court of Tax Appeals, namely:
1. In not declaring that force majeure and/or fortuitous event is a sufficient justification for the failure of the petitioner
to export the jute bags in question within the time required by the bonds.
2. In not declaring that it is within the power of the Collector of Customs and/or the Commissioner of Customs to
extend the period of one (1) year within which the jute bags should be exported.
3. In not declaring that the petitioner is entitled to a refund by way of a drawback under the provisions of section
106, par. (b), of the Tariff and Customs Code.
1. The basic issue tendered for resolution is whether the Commissioner of Customs is vested, under the Philippine Tariff Act
of 1909, the then applicable law, with discretion to extend the period of one year provided for in section 23 of the Act.
Section 23 reads:
SEC. 23. That containers, such as casks, large metal, glass, or other receptacles which are, in the opinion of the
collector of customs, of such a character as to be readily identifiable may be delivered to the importer thereof upon
identification and the giving of a bond with sureties satisfactory to the collector of customs in an amount equal to
double the estimated duties thereon, conditioned for the exportation thereof or payment of the corresponding duties
thereon within one year from the date of importation, under such rules and regulations as the Insular Collector of
Customs shall provide.1
To implement the said section 23, Customs Administrative Order 389 dated December 6, 1940 was promulgated, paragraph
XXVIII of which provides that "bonds for the re-exportation of cylinders and other containers are good for 12 months without
extension," and paragraph XXXI, that "bonds for customs brokers, commercial samples, repairs and those filed to guarantee
the re-exportation of cylinders and other containers are not extendible."
And insofar as jute bags as containers are concerned, Customs Administrative Order 66 dated August 25, 1948 was issued,
prescribing rules and regulations governing the importation, exportation and identification thereof under section 23 of the
Philippine Tariff Act of 1909. Said administrative order provides:
That importation of jute bags intended for use as containers of Philippine products for exportation to foreign
countries shall be declared in a regular import entry supported by a surety bond in an amount equal to double the
estimated duties, conditioned for the exportation or payment of the corresponding duties thereon within one year
from the date of importation.
It will be noted that section 23 of the Philippine Tariff Act of 1909 and the superseding sec. 105(x) of the Tariff and Customs
Code, while fixing at one year the period within which the containers therein mentioned must be exported, are silent as to
whether the said period may be extended. It was surely by reason of this silence that the Bureau of Customs issued
Administrative Orders 389 and 66, already adverted to, to eliminate confusion and provide a guide as to how it shall apply
the law, 2 and, more specifically, to make officially known its policy to consider the one-year period mentioned in the law as
non-extendible.
Considering that the statutory provisions in question have not been the subject of previous judicial interpretation, then the
application of the doctrine of "judicial respect for administrative construction," 3 would, initially, be in order.
Only where the court of last resort has not previously interpreted the statute is the rule applicable that courts will give
consideration to construction by administrative or executive departments of the state.41awphl.nt
The formal or informal interpretation or practical construction of an ambiguous or uncertain statute or law by the
executive department or other agency charged with its administration or enforcement is entitled to consideration
and the highest respect from the courts, and must be accorded appropriate weight in determining the meaning of
the law, especially when the construction or interpretation is long continued and uniform or is contemporaneous
with the first workings of the statute, or when the enactment of the statute was suggested by such agency.5
The administrative orders in question appear to be in consonance with the intention of the legislature to limit the period
within which to export imported containers to one year, without extension, from the date of importation. Otherwise, in
enacting the Tariff and Customs Code to supersede the Philippine Tariff Act of 1909, Congress would have amended
section 23 of the latter law so as to overrule the long-standing view of the Commissioner of Customs that the one-year
period therein mentioned is not extendible.
Implied legislative approval by failure to change a long-standing administrative construction is not essential to
judicial respect for the construction but is an element which greatly increases the weight given such construction.6
The correctness of the interpretation given a statute by the agency charged with administering its provision is
indicated where it appears that Congress, with full knowledge of the agency's interpretation, has made significant
additions to the statute without amending it to depart from the agency's view. 7
Considering that the Bureau of Customs is the office charged with implementing and enforcing the provisions of our Tariff
and Customs Code, the construction placed by it thereon should be given controlling weight.1awphl.nt
In applying the doctrine or principle of respect for administrative or practical construction, the courts often refer to several
factors which may be regarded as bases of the principle, as factors leading the courts to give the principle controlling weight
in particular instances, or as independent rules in themselves. These factors are the respect due the governmental agencies
charged with administration, their competence, expertness, experience, and informed judgment and the fact that they
frequently are the drafters of the law they interpret; that the agency is the one on which the legislature must rely to advise it
as to the practical working out of the statute, and practical application of the statute presents the agency with unique
opportunity and experiences for discovering deficiencies, inaccuracies, or improvements in the statute; ... 8
If it is further considered that exemptions from taxation are not favored, 9 and that tax statutes are to be construed
in strictissimi juris against the taxpayer and liberally in favor of the taxing authority, 10 then we are hard put to sustain the
petitioner's stand that it was entitled to an extension of time within which to export the jute bags and, consequently, to a
refund of the amount it had paid as customs duties.
In the light of the foregoing, it is our considered view that the one-year period prescribed in section 23 of the Philippine Tariff
Act of 1909 is non-extendible and compliance therewith is mandatory.
The petitioner's argument that force majeure and/or fortuitous events prevented it from exporting the jute bags within the
one-year period cannot be accorded credit, for several reasons. In the first place, in its decision of November 20, 1961, the
Court of Tax Appeals made absolutely no mention of or reference to this argument of the petitioner, which can only be
interpreted to mean that the court did not believe that the "typhoons, floods and picketing" adverted to by the petitioner in its
brief were of such magnitude or nature as to effectively prevent the exportation of the jute bags within the required one-year
period. In point of fact nowhere in the record does the petitioner convincingly show that the so-called fortuitous events or
force majeure referred to by it precluded the timely exportation of the jute bags. In the second place, assuming, arguendo,
that the one-year period is extendible, the jute bags were not actually exported within the one-week extension the petitioner
sought. The record shows that although of the remaining 86,353 jute bags 21,944 were exported within the period of one
week after the request for extension was filed, the rest of the bags, amounting to a total of 64,409, were actually exported
only during the period from February 16 to May 24, 1958, long after the expiration of the one-week extension sought by the
petitioner. Finally, it is clear from the record that the typhoons and floods which, according to the petitioner, helped render
impossible the fulfillment of its obligation to export within the one-year period, assuming that they may be placed in the
category of fortuitous events or force majeure, all occurred prior to the execution of the bonds in question, or prior to the
commencement of the one-year period within which the petitioner was in law required to export the jute bags.
2. The next argument of the petitioner is that granting that Customs Administrative Order 389 is valid and binding, yet "jute
bags" cannot be included in the phrase "cylinders and other containers" mentioned therein. It will be noted, however, that
the Philippine Tariff Act of 1909 and the Tariff and Customs Code, which Administrative Order 389 seeks to implement,
speak of "containers" in general. The enumeration following the word "containers" in the said statutes serves merely to give
examples of containers and not to specify the particular kinds thereof. Thus, sec. 23 of the Philippine Tariff Act states,
"containers such as casks large metals, glass or other receptacles," and sec. 105 (x) of the Tariff and Customs Code
mentions "large containers," giving as examples "demijohn cylinders, drums, casks and other similar receptacles of metal,
glass or other materials." (emphasis supplied) There is, therefore, no reason to suppose that the customs authorities had
intended, in Customs Administrative Order 389 to circumscribe the scope of the word "container," any more than the
statures sought to be implemented actually intended to do.
3. Finally, the petitioner claims entitlement to a drawback of the duties it had paid, by virtue of section 106 (b) of the Tariff
and Customs Code, 11 which reads:
SEC. 106. Drawbacks: ...
b. On Articles Made from Imported Materials or Similar Domestic Materials and Wastes Thereof. Upon the
exportation of articles manufactured or produced in the Philippines, including the packing, covering, putting up,
marking or labeling thereof, either in whole or in part of imported materials, or from similar domestic materials of
equal quantity and productive manufacturing quality and value, such question to be determined by the Collector of
Customs, there shall be allowed a drawback equal in amount to the duties paid on the imported materials so used,
or where similar domestic materials are used, to the duties paid on the equivalent imported similar materials, less
one per cent thereof: Provided, That the exportation shall be made within three years after the importation of the
foreign material used or constituting the basis for drawback ... .
The petitioner argues that not having availed itself of the full exemption granted by sec. 105(x) of the Tariff and Customs
Code due to its failure to export the jute bags within one year, it is nevertheless, by authority of the above-quoted provision,
entitled to a 99% drawback of the duties it had paid, averring further that sec. 106(b) does not presuppose immediate
payment of duties and taxes at the time of importation.
The contention is palpably devoid of merit.
The provisions invoked by the petitioner (to sustain his claim for refund) offer two options to an importer. The first, under
sec. 105 (x), gives him the privilege of importing, free from import duties, the containers mentioned therein as long as he
exports them within one year from the date of acceptance of the import entry, which period as shown above, is not
extendible. The second, presented by sec. 106 (b), contemplates a case where import duties are first paid, subject to refund
to the extent of 99% of the amount paid, provided the articles mentioned therein are exported within three years from
importation.
It would seem then that the Government would forego collecting duties on the articles mentioned in section 105(x) of Tariff
and Customs Code as long as it is assured, by the filing of a bond, that the same shall be exported within the relatively short
period of one year from the date of acceptance of the import entry. Where an importer cannot provide such assurance, then
the Government, under sec. 106(b) of said Code, would require payment of the corresponding duties first. The basic
purpose of the two provisions is the same, which is, to enable a local manufacturer to compete in foreign markets, by
relieving him of the disadvantages resulting from having to pay duties on imported merchandise, thereby building up export
trade and encouraging manufacture in the country.12 But there is a difference, and it is this: under section 105(x) full
exemption is granted to an importer who justifies the grant of exemption by exporting within one-year. The petitioner, having
opted to take advantage of the provisions of section 105(x), may not, after having failed to comply with the conditions
imposed thereby, avoid the consequences of such failure by being allowed a drawback under section 106(b) of the same
Act without having complied with the conditions of the latter section.
For it is not to be supposed that the legislature had intended to defeat compliance with the terms of section 105(x) thru a
refuge under the provisions of section 106(b). A construction should be avoided which affords an opportunity to defeat
compliance with the terms of a statute. 13 Rather courts should proceed on the theory that parts of a statute may be
harmonized and reconciled with each other.
A construction of a statute which creates an inconsistency should be avoided when a reasonable interpretation can be
adopted which will not do violence to the plain words of the act and will carry out the intention of Congress.
In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective
law, and the legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a
general principle, embodied in the maxim, "ut res magis valeat quam pereat," that the courts should, if reasonably
possible to do so without violence to the spirit and language of an act, so interpret the statute to give it efficient
operation and effect as a whole. An interpretation should, if possible, be avoided under which a statute or provision
being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained
away, or rendered insignificant, meaningless, inoperative, or nugatory. 14
ACCORDINGLY, the judgment of the Court of Tax Appeals of November 20, 1961 is affirmed, at petitioner's cost.
THIRD DIVISION
[G.R. No. 131787. May 19, 1999]
CHINA BANKING CORPORATION AND CBC PROPERTIES AND COMPUTER CENTER, INC., petitioners, vs. THE
MEMBERS OF THE BOARD OF TRUSTEES, HOME DEVELOPMENT MUTUAL FUND (HDMF); HDMF
PRESIDENT; AND THE HOME MUTUAL DEVELOPMENT FUND, respondents.
DECISION
GONZAGA-REYES, J.:
This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure on pure questions of law from the
Order of the Regional Trial Court of Makati, Branch 59 dated October 10, 1997 and from the Order of the same court dated
December 19, 1997 denying petitioners motion for reconsideration.
Briefly, petitioners China Banking Corporation (CBC) and CBC Properties and Computer Center Inc. (CBC-PCCI) are
both employers who were granted by the Home Development Mutual Fund (HDMF) certificates of waiver dated July 7, 1995
and January 19, 1996 (covering respectively the periods of July 1, 1995 to June 30, 1996 for CBC and January 1 to
December 31, 1995 for CBC-PCCI) for the identical reason of Superior Retirement Plan pursuant to Section 19 of P. D.
1752 otherwise known as the Home Development Mutual Fund Law of 1980 whereunder employers who have their own
existing provident and/or employees-housing plans may register for annual certification for waiver or suspension from
coverage or participation in the Home Development Mutual Fund created under said law.
It appears that in June 1994, Republic Act No. 7742, amending P. D. 1752 was approved. [1] On September 1, 1995,
respondent HDMF Board issued an Amendment to the Rules and Regulations Implementing R.A. 7742 (The Amendment)
and pursuant to said Amendment, the said Board issued on October 23, 1995 HDMF Circular No. 124-B or the Revised
Guidelines and Procedure for filing Application for Waiver or Suspension of Fund Coverage under P.D. 1752 (Guidelines).
Under the Amendment and the Guidelines, a company must have a provident/retirement and housing plan superior to that
provided under the Pag-IBIG Fund to be entitled to exemption/waiver from fund coverage.
CBC and CBC-PCCI applied for renewal of waiver of coverage from the fund for the year 1996, but the applications
were disapproved for the identical reason that:
Our evaluation of your companys application indicates that your retirement plan is not superior to Pag-IBIG Fund. Further,
the amended Implementing Rules and & Regulations of R. A. 7742 provides that to qualify for waiver, a company must have
retirement/provident and housing plans which are both superior to Pag-IBIG Funds.
Petitioners thus filed a petition for certiorari and prohibition before the Regional Trial Court of Makati seeking to annul
and declare void the Amendment and the Guidelines for having been issued in excess of jurisdiction and with grave abuse
of discretion amounting to lack of jurisdiction alleging that in requiring the employer to have both a retirement/provident plan
and an employee housing plan in order to be entitled to a certificate of waiver or suspension of coverage from the HDMF,
the HDMF Board exceeded its rule-making power.
Respondent Board filed a Motion to Dismiss and the court a quo, in its first challenged order dated October 10, 1997
granted the same. The Court dismissed the petition for certiorari on the grounds (1) that the denial or grant of an application
for waiver/coverage is within the power and authority of the HDMF Board, and the said Board did not exceed its jurisdiction
or act with grave abuse of discretion in denying the applications; and (2) the petitioners have lost their right to appeal by
failure to appeal within the periods provided in the Rules for appealing from the order of denial to the HDMF Board of
Trustees, and thereafter, to the Court of Appeals. The Court stated that certiorari will not lie as a substitute for a lost remedy
of appeal.
Motion for reconsideration of the above-Order having been denied in the Order of December 19, 1997, this petition for
review was filed under Rule 45 alleging that:
1. The court a quo erred in the appreciation of the issue, as it mistakenly noted that petitioner is contesting the authority of
respondent to issue rules pursuant to its rule-making power;
2. The court a quo erred in observing that the matter being assailed by the petitioners were the denial of their application for
waiver (Annexes H and I), and therefore, appeal is the proper remedy.
Essentially, petitioners contend that it does not question the power of respondent HDMF, as an administrative agency,
to issue rules and regulations to implement P.D. 1752 and Section 5 of R.A. 7742; however, the subject Amendment and
Guidelines issued by it should be set aside and declared null and void for being irrevocably inconsistent with the enabling
law, P.D. 1752, as amended by R.A. 7742, which merely requires as a pre-condition for exemption for coverage, the
existence of either a superior provident (retirement) plan or a superior housing plan, and not the concurrence of both plans.
Petitioners claim that certiorari is the proper remedy as what are being questioned are not the orders denying
petitioners application for renewal of waiver for coverage which were admittedly issued in the exercise of a quasi-judicial
function, but rather the validity of the subject Amendment and Guidelines, which are a patent nullity; hence the doctrine of
exhaustion of administrative remedies does not apply.
In their comment, respondents contend that there is no question of law involved. The interpretation of the phrase
and/or is not purely a legal question and it is susceptible of administrative determination. In denying petitioners application
for waiver of coverage under Republic Act No. 7742 the respondent Board was exercising its quasi-judicial function and its
findings are generally accorded not only respect but even finality. Moreover, the Amendment and the Guidelines are
consistent with the enabling law, which is a piece of social legislation intended to provide both a savings generation and a
house building program.
We find merit in the petition.
The core issue posed in the court below and in this Court is whether the respondents acted in excess of jurisdiction or
with grave abuse of discretion amounting to lack of jurisdiction in issuing the Amendment to the Rules and Regulations
Implementing R.A. 7742 and HDMF Circular No. 124-B on the Revised Guidelines and Procedure for Filing Application for
Waiver or Suspension of Fund Coverage under P.D. 1752, as amended by R.A. 7742, insofar as said Amendment and
Guidelines impose as a requirement for exemption from coverage or participation in the Home Development Mutual Fund
the existence of both a superior housing plan and a provident plan.
The procedural issue raised in the petition as to the propriety of certiorari in lieu of appeal has not been traversed by
the respondents. Suffice it to note that the petitioners sought to annul or declare null and void the questioned
Amendment and Guidelines and not merely the denial by the respondent Board of petitioners application for waiver or
exemption from coverage of the fund. As noted by the court a quo, the petition below squarely raised in issue the validity of
the Amendment to the Rules and Regulations and of HDMF Circular No. 124-B insofar as these require the existence of
both provident/retirement and housing plans for the grant of waiver/suspension by the Board and prayed that the same be
declared void for want of jurisdiction.
We hold that it was an error for the court a quo to rule that the petitioners should have exhausted its remedy of
appeal from the orders denying their application for waiver/suspension to the Board of Trustees and thereafter to the Court
of Appeals pursuant to the Rules. Certiorari is an appropriate remedy to question the validity of the challenged issuances of
the HDMF which are alleged to have been issued with grave abuse of discretion amounting to lack of jurisdiction. [2]
Moreover, among the accepted exceptions to the rule on exhaustion of administrative remedies are: (1) where the
question in dispute is purely a legal one; and (2) where the controverted act is patently illegal or was performed without
jurisdiction or in excess of jurisdiction.[3] Moreover, while certiorari as a remedy may not be used as a substitute for an
appeal, especially for a lost appeal, this rule should not be strictly enforced if the petition is genuinely meritorious.[4] It has
been said that where the rigid application of the rules would frustrate substantial justice, or bar the vindication of a legitimate
grievance, the courts are justified in exempting a particular case from the operation of the rules.[5]
We vote to give the petition due course. The assailed Amendment to the Rules and Regulations and the Revised
Guidelines suffer from a legal infirmity and should be set aside.
The law pertinent to the Home Development Mutual Fund, otherwise known as the Pag-IBIG Fund, should be revisited.
The Human Development Mutual Funds were created by Presidential Decree No. 1530, promulgated on June 11,
1978. The said funds, one for government employees and another for private employees, were to be established and
maintained from contributions by the employees and counterpart contributions by their employers. P.D. No. 1752, enacted
on December 13, 1980, amended P. D. 1530 to make the Home Development Mutual Fund a body corporate and to make
its coverage mandatory upon all employers covered by the Social Security System and the Government Service Insurance
System. Section 19 of P.D. No. 1752 provides for waiver or suspension from coverage or participation in the fund, thus:
Section 19. Existing Provident/Housing Plans. - An employer and/or employee-group who, at the time this Decree becomes
effective have their ownprovident and/or employee-housing plans, may register with the Fund, for any of the following
purposes:
(a) For annual certification of waiver or suspension from coverage or participation in the Fund, which shall be granted on the
basis of verification that the waiver or suspension does not contravene any effective collective bargaining agreement and
that the features of the plan or plans are superior to the Fund or continue to be so; or
(b) For integration with the Fund, either fully or partially.
The establishment of a separate provident and/or housing plan after the effectivity of this Decree shall not be a ground for
waiver of coverage in the Fund; nor shall such coverage bar any employer and/or employee-group from establishing
separate provident and/or housing plans. (underscoring ours)
On June 17, 1994, Republic Act No. 7742, amending certain sections of P.D. 1752 was approved. Section 5 of the said
statute provides that within sixty (60) days from the approval of the Act, the Board of Trustees of the Home Development
Mutual Fund shall promulgate the rules and regulations necessary for the effective implementation of (this) Act.
Pursuant to the above authority the Home Development Mutual Fund Board of Trustees promulgated The
Implementing Rules and Regulations of Republic Act 7742 amending Presidential Decree No. 1752, Executive Order Nos.
35 and 90, which was published on August 1, 1994. Rule VII thereof reads:
RULE VII
WAIVER OR SUSPENSION
SECTION 1. Waiver or Suspension-Existing Provident or Retirement Plan.
An employer and/or employee group who has an existing provident or retirement plan as of the effectivity of Republic Act
No. 7742, qualified under Republic Act No. 4917 and actuarially determined to be sound and reasonable by an independent
actuary duly accredited by the Insurance Commission,may apply with the Fund for waiver or suspension of coverage. Such
waiver or suspension may be granted by the President of the Fund on the basis of verification that the waiver or suspension
does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or
plans are superior to the Fund and continue to be so. The certificate of waiver or suspension of coverage issued herein shall
only be for a period of one (1) year but the same may be renewed for another year upon the filing of a proper application
within a period of sixty (60) days prior to the expiration of the existing waiver or suspension.
SECTION 2. Waiver or Suspension-Existing Housing Plan.
An employer and/or employee group who has an existing housing plan as of the effectivity of Republic Act No. 7742 may
apply with the fund for waiveror suspension of coverage. Such waiver or suspension of coverage may be granted by the
President of the Fund on the basis of verification that the waiver or suspension of coverage does not contravene any
effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund
and continue to be so. The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1)
year but the same may be renewed for another year upon the filing of a proper application within a period of sixty (60) days
prior to the expiration of the existing waiver or suspension.
Subsequently, the HDMF Board adopted in its Special Board Meeting held on September 1, 1995, Amendments to the
Rules and Regulations Implementing Republic Act 7742. As amended, Rule VII on Waiver or Suspension now reads:
RULE VII
WAIVER OF SUSPENSION
SECTION 1. Waiver or Suspension Because of Existing Provident/Retirement and Housing Plan.
Any employer with a plan providing both for a provident/retirement and housing benefits for all his employees and existing
as of December 14, 1980, the effectivity date of Presidential Decree No. 1752, may apply with the Fund for waiver or
suspension of coverage . The provident/retirement aspect of the plan must be qualified under R.A. 4917 and
actuarially determined to be sound and reasonable by an independent, actuary duly accredited by the Insurance
Commission. The provident/retirement and housing benefits as provided for under the plan must be superior to the
provident/retirement and housing benefits offered by the Fund.
Such waiver or suspension may be granted by the Fund on the basis of actual verification that the waiver or suspension
does not contravene any collective bargaining agreement, any other existing agreement or clearly spelled out management
policy and that the features of the plan or plans are superior to the Fund and continue to be so.
Provided further that the application must be endorsed by the labor union representing a majority of the employees or in the
absence thereof by at least a majority vote of all the employees in the said establishment in a meeting specifically called for
the purpose. Provided, furthermore that such a meeting be held or be conducted under the supervision of an authorized
representative from the Fund.
The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1) year effective upon
issuance thereof. No certificate of waiver issued by the President of the Fund shall have retroactive effect. Application for
renewal must be filled within-sixty (60) days prior to the expiration of the existing waiver or suspension and such application
for renewal shall only be granted based on the same conditions and requirements under which the original application was
approved. Pending the approval of the application for waiver or suspension of coverage or the application for renewal, the
employer and his covered employees shall continue to be mandatorily covered by the Fund as provided for under R.A.
7742. (underscoring ours)
On October 23, 1995, HDMF Circular No. 124-B entitled Revised Guidelines and Procedure for Filing Applications for
Waiver or Suspension ofFund Coverage under P.D. No. 1752, as amended by Republic Act No. 7742, was promulgated.
The Circular pertinently provides:
I. GROUNDS FOR WAIVER OR SUSPENSION OF FUND COVERAGE
A. SUPERIOR PROVIDENT/RETIREMENT PLAN AND HOUSING PLAN
ANY EMPLOYER WHO HAS A PROVIDENT, RETIREMENT, GRATUITY OR PENSION PLAN AND A HOUSING PLAN,
EXISTING AS OF DECEMBER 14, 1980, THE EFFECTIVITY OF P.D. NO. 1752, may file an application for waiver or
suspension from Fund coverage, provided, that - -
1. The retirement/provident plan is qualified as such under Republic Act No. 4917 (An Act Providing That
Retirement Benefits of Employees of Private Firms Shall Not Be Subject to Attachment, Levy, or Execution or
Any Tax Whatsoever), as certified by the Bureau of Internal Revenue;
2. The retirement/provident plan is actuarially determined to be financially sound and reasonable by an
independent actuary duly accredited by the Insurance Commission;
3. The retirement/provident plan is superior to the retirement /provident benefits offered by the Fund in terms of:
- vesting features
-full and immediate crediting of employers contribution to the employees account, the TAV of which the employee
carries with him in the event he transfers to another employer; or he becomes self-employed or unemployed;
-employers contribution (* For provident plans)
-must be equal to or higher than two percent (2%) of employees monthly compensation, defined in the HDMF
Implementing Rules and Regulations as the employees basic monthly salary plus Cost of Living Allowance;
-retirement age and years of service required to avail of plan benefits
-85 or lower
-10 years of service or less
-amount of benefits extended to EEs (* For retirement plans)
-at least fifty (50%) of monthly compensation, as defined in the HDMF IRR, for every year of service.
4. The housing plan must be superior to the PAG-IBIG Housing Loan Program in terms of:
-residency requirement as employee of the company or member of the plan to avail of housing loan under the plan
-six (6) months or less;
-interest rates
-equal to or lower than the prescribed rates under the PAG-IBIG Expanded Housing Loan Program
(EHLP);
- repayment period
-25 years or more;
-loanable amount
-equal to or greater than the maximum loan amount under the PAG-IBIG Expanded Housing Loan
Program; and
-percentage of covered EEs benefitted by the Housing Plan
-EEs who have availed of the Housing Plan benefits as of date of waiver application must be no less than
five (5%) of the total.
5. The application for waiver or suspension, based on actual verification of the Fund, does not contravene any
effective collective bargaining or any other agreement existing between the employer and his employees.
6. The application must be endorsed by the labor union representing a majority of the employees, or, in the
absence thereof, at least a majority vote of all company employees in a meeting specifically called for the
purpose and conducted under the supervision of an authorized representative of the Fund.
As above stated, when petitioners CBC and CBC-PCCI applied for the renewal of waiver of Fund coverage for the year
1996, the applications were disapproved on identical grounds namely, that the retirement plan is not superior to Pag-IBIG
Fund and that the amended Implementing Rules and Regulations of R.A. 7742 provides that to qualify for waiver, a
company must have retirement/provident and housing plan which are both superior to Pag-IBIG Funds.
Petitioner contends that respondent, in the exercise of its rule making power has overstepped the bounds and
exceeded its limit,. The law provides as a condition for exemption from coverage, the existence of either a
superior provident (retirement) plan, and/or a superior housing plan, and not the existence of both plans.
On the other hand, respondents claim that the use of the words and/or in Section 19 of P.D. No. 1752, which words are
diametrically opposed in meaning, can only be used interchangeably and not together, and the option of making it either
both or any one belongs to the Board of Trustees of HDMF, which has the power and authority to issue rules and
regulations for the effective implementation of the Pag-IBIG Fund Law, and the guidelines for the grant of waiver or
suspension of coverage.
There is no question that the HDMF Board has rule-making powers. Section 5 of R.A. No. 7742 states that the said
Board shall promulgate the rules and regulations necessary for the effective implementation of said Act. Its rule- making
power is also provided in Section 13 of P.D. No. 1752 which states insofar as pertinent that the Board is authorized to make
and change needful rules and regulations to provide for, among others,
a. the effective administration, custody, development, utilization and disposition of the Fund or parts thereof including
payment of amounts credited to members or to their beneficiaries or estates;
b. Extension of Fund coverage to other working groups and waiver or suspension of coverage or its enforcement for
reasons therein stated.
xxx xxx xxx
i. Other matters that, by express or implied provisions of this Act, shall require implementation by appropriate policies, rules
and regulations.
The controversy lies in the legal signification of the words and/or.

In the instant case, the legal meaning of the words and/or should be taken in its ordinary signification, i.e., either and
or; e.g. butter and/or eggs meansbutter and eggs or butter or eggs. [6]
The term and/or means that effect shall be given to both the conjunctive and and the disjunctive or; or that one word or the
other may be taken accordingly as one or the other will best effectuate the purpose intended by the legislature as gathered
from the whole statute. The term is used to avoid a construction which by the use of the disjunctive or alone will exclude the
combination of several of the alternatives or by the use of the conjunctive and will exclude the efficacy of any one of the
alternatives standing alone.[7]
It is accordingly ordinarily held that the intention of the legislature in using the term and/or is that the word and and the
word or are to be used interchangeably.[8]
It is seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752, intended that an
employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from
coverage. If the law had intended that the employee should have both a superior provident plan and a housing plan in order
to qualify for exemption, it would have used the words and instead of and/or. Notably, paragraph (a) of Section 19 requires
for annual certification of waiver or suspension, that the features of the plan or plans are superior to the fund or continue to
be so. The law obviously contemplates that the existence of either plan is considered as sufficient basis for the grant of an
exemption; needless to state, the concurrence of both plans is more than sufficient. To require the existence of both plans
would radically impose a more stringent condition for waiver which was not clearly envisioned by the basic law. By removing
the disjunctive word or in the implementing rules the respondent Board has exceeded its authority.
It is well settled that the rules and regulations which are the product of a deligated power to create new or additional
legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to
the Administrative agency.[9] Department zeal may not be permitted to outrun the authority conferred by statute. [10] As aptly
observed in People vs. Maceren[11]:
Administrative regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations,
of course, the law itself cannot be extended. U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act
of Congress (Santos vs. Estenzo, 109 Phil. 419 422; Teoxon vs. Members of the Board of Administrators, L-25619, June
30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs.
Casteel, L-21906, August 29, 1969 SCRA 350).
The rule making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it
has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace
matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs.
Board of Tax Appeals, 93 Phil. 376, 382, citing 12 C. J. 845-46. As to invalid regulations, see Collector of Internal Revenue
vs. Villaflor, 69 Phil. 319; Wise & Co. vs. Meer, 78 Phil. 655, 676; Del Mar vs. Phil. Veterans Administration, L-27299, June
27, 1973, 51 SCRA 340, 349).
While it may be conceded that the requirement of the concurrence of both plans to qualify for exemption would
strengthen the Home Development Mutual Fund and make it more effective both as a savings generation and a house
building program, the basic law should prevail as the embodiment of the legislative purpose, and the rules and regulations
issued to implement said law cannot go beyond its terms and provisions.
We accordingly find merit in petitioners contention that Section 1, Rule VII of the Rules and Regulations Implementing
R.A. 7742, and HDMF Circular No. 124-B and the Revised Guidelines and Procedure for Filing Application for Waiver or
Suspension of Fund Coverage under P.D. 1752, asamended by R.A. 7742, should be declared invalid insofar as they
require that an employer must have both a superior retirement/provident plan and a superior employee housing plan in
order to be entitled to a certificate of waiver and suspension of coverage from the HDMF.
WHEREFORE, the petition is given due course and the assailed Orders of the court a quo dated October 10, 1997 and
December 19, 1997 are hereby set aside. Section 1 of Rule VII of the Amendments to the Rules and Regulations
Implementing R.A. 7742, and HDMF Circular No. 124-B prescribing the Revised Guidelines and Procedure for Filing
Applications for Waiver or Suspension of Fund Coverage under P.D. 1752, as amended by R.A. No. 7742, insofar as they
require that an employer should have both a provident/retirement plan superior to the retirement/provident benefits offered
by the Fund and a housing plan superior to the Pag-IBIG housing loan program in order to qualify for waiver or suspension
of fund coverage, are hereby declared null and void.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-32166 October 18, 1977
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO REYES, BENJAMIN
REYES, NAZARIO AQUINO and CARLO DEL ROSARIO, accused-appellees.
Office of the Solicitor General for appellant.
Rustics F. de los Reyes, Jr. for appellees.
AQUINO, J.:t.hqw
This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water fisheries, promulgated by
the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the
law creating the Fisheries Commission.
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del Rosario were
charged by a Constabulary investigator in the municipal court of Sta. Cruz, Laguna with having violated Fisheries
Administrative Order No. 84-1.
It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted to electro fishing in the waters
of Barrio San Pablo Norte, Sta. Cruz by "using their own motor banca, equipped with motor; with a generator colored green
with attached dynamo colored gray or somewhat white; and electrocuting device locally known as sensored with a
somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to
the dynamo direct and with the use of these devices or equipments catches fish thru electric current, which destroy any
aquatic animals within its cuffed reach, to the detriment and prejudice of the populace" (Criminal Case No. 5429).
Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed. The Court of First
Instance of Laguna affirmed the order of dismissal (Civil Case No. SC-36). The case is now before this Court on appeal by
the prosecution under Republic Act No. 5440.
The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous
substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy
conducted or transmitted by substances. The lower court further held that, since the law does not clearly prohibit electro
fishing, the executive and judicial departments cannot consider it unlawful.
As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or
poisonous substance" in fishing.
Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not
more than five hundred pesos nor more than five thousand, and by imprisonment for not less than six months nor more than
five years.
It is noteworthy that the Fisheries Law does not expressly punish .electro fishing." Notwithstanding the silence of the law,
the Secretary of Agriculture and Natural Resources, upon the recommendation of the Commissioner of Fisheries,
promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters. The
order is quoted below: +.wph!1
SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS +.wph!1
OF THE PHILIPPINES.
Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the following rules and regulations
regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance
of all concerned.+.wph!1
SECTION 1. Definition. Words and terms used in this Order 11 construed as follows:
(a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago,
as defined in the t between the United States and Spain, dated respectively the tenth of December,
eighteen hundred ninety eight and the seventh of November, nineteen hundred. For the purpose of this
order, rivers, lakes and other bodies of fresh waters are included.
(b) Electro Fishing. Electro fishing is the catching of fish with the use of electric current. The equipment
used are of many electrical devices which may be battery or generator-operated and from and available
source of electric current.
(c) 'Persons' includes firm, corporation, association, agent or employee.
(d) 'Fish' includes other aquatic products.
SEC. 2. Prohibition. It shall be unlawful for any person to engage in electro fishing or to catch fish by
the use of electric current in any portion of the Philippine waters except for research, educational and
scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural
Resources which shall be carried at all times.
SEC. 3. Penalty. Any violation of the provisions of this Administrative Order shall subject the offender
to a fine of not exceeding five hundred pesos (P500.00) or imprisonment of not extending six (6) months or
both at the discretion of the Court.
SEC. 4. Repealing Provisions. All administrative orders or parts thereof inconsistent with the
provisions of this Administrative Order are hereby revoked.
SEC. 5. Effectivity. This Administrative Order shall take effect six (60) days after its publication in the
Office Gazette.
On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of the Fisheries
Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of Administrative Order No. 84, by
restricting the ban against electro fishing to fresh water fisheries (63 O.G. 9963).
Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the amendatory order to read
as follows: "in fresh water fisheries in the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other
bodies of fresh water."
The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is punishable under section 83
of the Fisheries Law (not under section 76 thereof), which provides that any other violation of that law "or of any rules and
regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200), or in t
for not more than six months, or both, in the discretion of the court."
That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84 imposes a fm of not exceeding P500
on a person engaged in electro fishing, which amount the 83. It seems that the Department of Fisheries prescribed their
own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified
to the at penalty imposed in section 83.
Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime of electro fishing would be
within the exclusive original jurisdiction of the inferior court (Sec. 44 [f], Judiciary Law; People vs. Ragasi, L-28663,
September 22,
We have discussed this pre point, not raised in the briefs, because it is obvious that the crime of electro fishing which is
punishable with a sum up to P500, falls within the concurrent original jurisdiction of the inferior courts and the Court of First
instance (People vs. Nazareno, L-40037, April 30, 1976, 70 SCRA 531 and the cases cited therein).
And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial capital, the order of d rendered
by that municipal court was directly appealable to the Court, not to the Court of First Instance of Laguna (Sec. 45 and last
par. of section 87 of the Judiciary Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA 596).
It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. Its order affirming the
municipal court's order of dismissal is void for lack of motion. This appeal shall be treated as a direct appeal from the
municipal court to this Court. (See People vs. Del Rosario, 97 Phil. 67).
In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not issued under section 11 of the
Fisheries Law which, as indicated above, punishes fishing by means of an obnoxious or poisonous substance. This
contention is not well-taken because, as already stated, the Penal provision of Administrative Order No. 84 implies that
electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11.
The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-
making power of the Department Secretary under section 4 of the Fisheries Law; (2) the function of the Commissioner of
Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the
rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of
fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the declared national policy to encourage, Promote and conserve our
fishing resources (Sec. 1, Republic Act No. 3512), and (4) section 83 of the Fisheries Law which provides that "any other
violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of
not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court."
As already pointed out above, the prosecution's reference to section 83 is out of place because the penalty for electro
fishing under Administrative order No. 84 is not the same as the penalty fixed in section 83.
We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded
their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted under
the Fisheries Commission, Republic Act No. 3512.
The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that
law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. In
other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied
in the old Fisheries Law.
That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2) unlawful fishing in deepsea
fisheries; (3) unlawful taking of marine molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report the
kind and quantity of fish caught, and (6) other violations.
Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in punishing electro fishing, does
not contemplate that such an offense fails within the category of "other violations" because, as already shown, the penalty
for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances,
fixed in section 76, and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of
the Fisheries Law.
The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It
can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. (People vs.
Exconde 101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11 32).
Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban against electro fishing was
confined to fresh water fisheries. The amendment created the impression that electro fishing is not condemnable per se. It
could be tolerated in marine waters. That circumstances strengthens the view that the old law does not eschew all forms of
electro fishing.
However, at present, there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be
penalized merely by executive revolution because Presidential Decree No. 704, which is a revision and consolidation of all
laws and decrees affecting fishing and fisheries and which was promulgated on May 16, 1975 (71 O.G. 4269), expressly
punishes electro fishing in fresh water and salt water areas.
That decree provides: +.wph!1
SEC. 33. Illegal fishing, dealing in illegally caught fish or fishery/aquatic products. It shall he unlawful
for any person to catch, take or gather or cause to be caught, taken or gathered fish or fishery/aquatic
products in Philippine waters with the use of explosives, obnoxious or poisonous substance, or by the use
of electricity as defined in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: ...
The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586, Presidential Decrees Nos. 43, 534
and 553, and all , Acts, Executive Orders, rules and regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704).
The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or
silence on that point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to
penalize electro fishing.
Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries Administrative Order No. 84 and which
is not provided for the old Fisheries Law, is now found in section 3(d) of the decree. Note further that the decree penalty
electro fishing by "imprisonment from two (2) to four (4) years", a punishment which is more severe than the penalty of a
time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries
Administrative Order No. 84.
An examination of the rule-making power of executive officials and administrative agencies and, in particular, of the
Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the
view that he ex his authority in penalizing electro fishing by means of an administrative order.
Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable, if not
impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the
law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should
conform to the standards that the law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Mu;oz, L-
24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706, 712).
The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U.S. vs. Tupasi
Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506; Interprovincial Autobus Co., Inc. vs. Coll. of Internal
Revenue, 98 Phil. 290, 295-6).
The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is
an exception to the nondeleption of legislative, powers. Administrative regulations or "subordinate legislation calculated to
promote the public interest are necessary because of "the growing complexity of modem life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the law" Calalang vs. Williams, 70 Phil.
726; People vs. Rosenthal and Osme;a, 68 Phil. 328).
Administrative regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations,
of course, the law itself cannot be extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act
of Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L-25619, June 30,
1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel,
L-21906, August 29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his
been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters
not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of
Tax A 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 Phil. 319,
Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans Administrative, L-27299, June 27, 1973, 51 SCRA
340, 349).
There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Section 4 of the
Fisheries law provides that the Secretary "shall from time to time issue instructions, orders, and regulations consistent" with
that law, "as may be and proper to carry into effect the provisions thereof." That power is now vested in the Secretary of
Natural Resources by on 7 of the Revised Fisheries law, Presidential December No. 704.
Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the
Secretary of Agriculture and Natural Resources, forms instructions, rules and regulations consistent with the purpose" of
that enactment "and for the development of fisheries."
Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate,
whenever he may see fit do so, all rules, regulates, orders, memorandums, and other instructions,not contrary to law, to
regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of
his Department, and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of
said Department; but none of said rules or orders shall prescribe penalties for the violation thereof, except as expressly
authorized by law."
Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. Secretary
of culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA
316). As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that he should not
transcend the bound demarcated by the statute for the exercise of that power; otherwise, he would be improperly exercising
legislative power in his own right and not as a surrogate of the lawmaking body.
Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders and regulations shall be
valid only when they are not contrary to the laws or the Constitution."
As noted by Justice Fernando, "except for constitutional officials who can trace their competence to act to the fundamental
law itself, a public office must be in the statute relied upon a grant of power before he can exercise it." "department zeal may
not be permitted to outrun the authority conferred by statute." (Radio Communications of the Philippines, Inc. vs. Santiago,
L-29236, August 21, 1974, 58 SCRA 493, 496-8).
"Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative
agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided
in the law. This is so because statutes are usually couched in general terms, after expressing the policy, purposes,
objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the law are
oftentimes left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and
regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law."
The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative
agency. (Davis, Administrative Law, p. 194, 197, cited in Victories Milling Co., Inc. vs. Social Security Commission, 114 Phil.
555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms and provisions of the basic law (People vs. Lim, 108 Phil.
1091).
This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the attention of technical men in the
executive departments, who draft rules and regulations, to the importance and necessity of closely following the legal
provisions which they intend to implement so as to avoid any possible misunderstanding or confusion.
The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and
based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in
accordance with the provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, 124).
In other words, a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided
in the authorizing statute and by virtue of the latter (People vs. Exconde 101 Phil. 1125, 1132).
It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in
the legislature, and it may not be delegated to any other body or agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs.
Montgomery, 73 F. Supp. 527).
In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law, under which
the regulation was issued, because the law itself does not expressly punish electro fishing.
The instant case is similar to People vs. Santos, 63 Phil. 300. The Santos case involves section 28 of Fish and Game
Administrative Order No. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned
section 4 of the Fisheries Law.
Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative
order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by
naval and military reservations authorities of the United States only upon receiving written permission therefor, which
permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. A
violation of the proviso may be proceeded against under section 45 of the Federal Penal Code.
Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two
fishing boats to fish, loiter and anchor without permission from the Secretary within three kilometers from the shoreline of
Corrigidor Island.
This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of
the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United
States, without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military
and naval authorities concerned.
As the said law does not penalize the act mentioned in section 28 of the administrative order, the promulgation of that
provision by the Secretary "is equivalent to legislating on the matter, a power which has not been and cannot be delegated
to him, it being expressly reserved" to the lawmaking body. "Such an act constitutes not only an excess of the regulatory
power conferred upon the Secretary but also an exercise of a legislative power which he does not have, and therefore" the
said provision "is null and void and without effect". Hence, the charge against Santos was dismiss.
A penal statute is strictly construed. While an administrative agency has the right to make ranks and regulations to carry into
effect a law already enacted, that power should not be confused with the power to enact a criminal statute. An
administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred
upon it. (Glustrom vs. State, 206 Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130).
Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry
out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or
which conflict with the authority granting statute, do not represent a valid precise of the rule-making power but constitute an
attempt by an administrative body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51).
In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the
scope of the authority conferred upon the administrative body, and the order will be scrutinized with special care. (State vs.
Miles supra).
The Miles case involved a statute which authorized the State Game Commission "to adopt, promulgate, amend and/or
repeal, and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game.
Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer, pay or receive any reward,
prize or compensation for the hunting, pursuing, taking, killing or displaying of any game animal, game bird or game fish or
any part thereof."
Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to the person displaying the
largest deer in his store during the open for hunting such game animals. For that act, he was charged with a violation of the
rule Promulgated by the State Game Commission.
It was held that there was no statute penalizing the display of game. What the statute penalized was the taking of game. If
the lawmaking body desired to prohibit the display of game, it could have readily said so. It was not lawful for the
administrative board to extend or modify the statute. Hence, the indictment against Miles was quashed. The Miles case is
similar to this case.
WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate jurisdiction and the order of
dismissal rendered by the municipal court of Sta. Cruz, Laguna in Criminal Case No. 5429 is affirmed. Costs de oficio.
SO ORDERED.
EN BANC
[G.R. No. 116422. November 4, 1996]
AVELINA B. CONTE and LETICIA BOISER-PALMA, petitioners, vs. COMMISSION ON AUDIT (COA), respondent.
DECISION
PANGANIBAN, J.:
Are the benefits provided for under Social Security System Resolution No. 56 to be considered simply as financial
assistance for retiring employees, or does such scheme constitute a supplementary retirement plan proscribed by Republic
Act No. 4968?
The foregoing question is addressed by this Court in resolving the instant petition for certiorari which seeks to reverse
and set aside Decision No. 94-126[1]dated March 15, 1994 of respondent Commission on Audit, which denied petitioners
request for reconsideration of its adverse ruling disapproving claims for financial assistance under SSS Resolution No. 56.
The Facts
Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social Security System (SSS)
who retired from government service on May 9, 1990 and September 13, 1992, respectively. They availed of compulsory
retirement benefits under Republic Act No. 660.[2]
In addition to retirement benefits provided under R.A. 660, petitioners also claimed SSS financial assistance benefits
granted under SSS Resolution No. 56, series of 1971.
A brief historical backgrounder is in order. SSS Resolution No. 56,[3] approved on January 21, 1971, provides financial
incentive and inducement to SSS employees qualified to retire to avail of retirement benefits under RA 660 as amended,
rather than the retirement benefits under RA 1616 as amended, by giving them financial assistance equivalent in amount to
the difference between what a retiree would have received under RA 1616, less what he was entitled to under RA 660. The
said SSS Resolution No. 56 states:
RESOLUTION NO. 56
WHEREAS, the retirement benefits of SSS employees are provided for under Republic Acts 660 and 1616 as amended;
WHEREAS, SSS employees who are qualified for compulsory retirement at age 65 or for optional retirement at a lower age
are entitled to either the life annuity under R.A. 660, as amended, or the gratuity under R.A. 1616, as amended;
WHEREAS, a retirement benefit to be effective must be a periodic income as close as possible to the monthly income that
would have been due to the retiree during the remaining years of his life were he still employed;
WHEREAS, the life annuity under R.A. 660, as amended, being closer to the monthly income that was lost on account of old
age than the gratuity under R.A. 1616, as amended, would best serve the interest of the retiree;
WHEREAS, it is the policy of the Social Security Commission to promote and to protect the interest of all SSS employees,
with a view to providing for their well-being during both their working and retirement years;
WHEREAS, the availment of life annuities built up by premiums paid on behalf of SSS employees during their working years
would mean more savings to the SSS;
WHEREAS, it is a duty of the Social Security Commission to effect savings in every possible way for economical and
efficient operations;
WHEREAS, it is the right of every SSS employee to choose freely and voluntarily the benefit he is entitled to solely for his
own benefit and for the benefit of his family;
NOW, THEREFORE, BE IT RESOLVED, That all the SSS employees who are simultaneously qualified for compulsory
retirement at age 65 or for optional retirement at a lower age be encouraged to avail for themselves the life annuity under
R.A. 660, as amended;
RESOLVED, FURTHER, That SSS employees who availed themselves of the said life annuity, in appreciation and
recognition of their long and faithful service, be granted financial assistance equivalent to the gratuity plus return of
contributions under R.A. 1616, as amended, less the five year guaranteed annuity under R.A. 660, as amended;
RESOLVED, FINALLY, That the Administrator be authorized to act on all applications for retirement submitted by SSS
employees and subject to availability of funds, pay the corresponding benefits in addition to the money value of all
accumulated leaves. (underscoring supplied)
Long after the promulgation of SSS Resolution No. 56, respondent Commission on Audit (COA) issued a ruling,
captioned as 3rd Indorsement dated July 10, 1989,[4] disallowing in audit all such claims for financial assistance under SSS
Resolution No. 56, for the reason that: --
x x x the scheme of financial assistance authorized by the SSS is similar to those separate retirement plan or
incentive/separation pay plans adopted by other government corporate agencies which results in the increase of benefits
beyond what is allowed under existing retirement laws. In this regard, attention x x x is invited to the view expressed by the
Secretary of Budget and Management dated February 17, 1988 to the COA General Counsel against the proliferation of
retirement plans which, in COA Decision No. 591 dated August 31, 1988, was concurred in by this Commission. x x x.
Accordingly, all such claims for financial assistance under SSS Resolution No. 56 dated January 21, 1971 should be
disallowed in audit. (underscoring supplied)
Despite the aforequoted ruling of respondent COA, then SSS Administrator Jose L. Cuisia, Jr. nevertheless wrote [5] on
February 12, 1990 then Executive Secretary Catalino Macaraig, Jr., seeking presidential authority for SSS to continue
implementing its Resolution No. 56 dated January 21, 1971 granting financial assistance to its qualified retiring employees.
However, in a letter-reply dated May 28, 1990,[6] then Executive Secretary Macaraig advised Administrator Cuisia that
the Office of the President is not inclined to favorably act on the herein request, let alone overrule the disallowance by COA
of such claims, because, aside from the fact that decisions, order or actions of the COA in the exercise of its audit functions
are appealable to the Supreme Court[7]pursuant to Sec. 50 of PD 1445, the benefits under said Res. 56, though referred to
as financial assistance, constituted additional retirement benefits, and the scheme partook of the nature of a supplementary
pension/retirement plan proscribed by law.
The law referred to above is RA 4968 (The Teves Retirement Law), which took effect June 17, 1967 and amended CA
186 (otherwise known as the Government Service Insurance Act, or the GSIS Charter), making Sec. 28 (b) of the latter act
read as follows:
(b) Hereafter, no insurance or retirement plan for officers or employees shall be created by employer. All supplementary
retirement or pension plans heretofore in force in any government office, agency or instrumentality or corporation owned or
controlled by the government, are hereby declared inoperative or abolished; Provided, That the rights of those who are
already eligible to retire thereunder shall not be affected. (underscoring supplied)
On January 12, 1993, herein petitioners filed with respondent COA their letter-appeal/protest[8] seeking reconsideration
of COAs ruling of July 10, 1989 disallowing claims for financial assistance under Res. 56.
On November 15, 1993, petitioner Conte sought payment from SSS of the benefits under Res. 56. On December 9,
1993, SSS Administrator Renato C. Valencia denied[9] the request in consonance with the previous disallowance by
respondent COA, but assured petitioner that should the COA change its position, the SSS will resume the grant of benefits
under said Res. 56.
On March 15, 1994, respondent COA rendered its COA Decision No. 94-126 denying petitioners request for
reconsideration.
Thus this petition for certiorari under Rule 65 of the Rules of Court.
The Issues
The issues[10] submitted by petitioners may be simplified and re-stated thus: Did public respondent abuse its discretion
when it disallowed in audit petitioners claims for benefits under SSS Res. 56?
Petitioners argue that the financial assistance under Res. 56 is not a retirement plan prohibited by RA 4968, and that
Res. 56 provides benefits different from and aside from what a retiring SSS employee would be entitled to under RA
660. Petitioners contend that it is a social amelioration and economic upliftment measure undertaken not only for the benefit
of the SSS but more so for the welfare of its qualified retiring employees. As such, it should be interpreted in a manner that
would give the x x x most advantage to the recipient -- the retiring employees whose dedicated, loyal, lengthy and faithful
service to the agency of government is recognized and amply rewarded -- the rationale for the financial assistance plan.
Petitioners reiterate the argument in their letter dated January 12, 1993 to COA that:
Motivation can be in the form of financial assistance, during their stay in the service or upon retirement, as in the SSS
Financial Assistance Plan. This is so, because Government has to have some attractive remuneration programs to
encourage well-qualified personnel to pursue a career in the government service, rather than in the private sector or in
foreign countries ...
A more developmental view of the financial institutions grant of certain forms of financial assistance to its personnel, we
believe, would enable government administrators to see these financial forms of remuneration as contributory to the national
developmental efforts for effective and efficient administration of the personnel programs in different institutions. [11]
The Courts Ruling
Petitioners contentions are not supported by law. We hold that Res. 56 constitutes a supplementary retirement plan.
A cursory examination of the preambular clauses and provisions of Res. 56 provides a number of clear indications that
its financial assistance plan constitutes a supplemental retirement/pension benefits plan. In particular, the fifth preambular
clause which provides that it is the policy of the Social Security Commission to promote and to protect the interest of all SSS
employees, with a view to providing for their well-being during both their working and retirement years, and the wording of
the resolution itself which states Resolved, further, that SSS employees who availed themselves of the said life annuity
(under RA 660), in appreciation and recognition of their long and faithful service, be granted financial assistance x x x can
only be interpreted to mean that the benefit being granted is none other than a kind of amelioration to enable the retiring
employee to enjoy (or survive) his retirement years and a reward for his loyalty and service. Moreover, it is plain to see that
the grant of said financial assistance is inextricably linked with and inseparable from the application for and approval of
retirement benefits under RA 660, i.e., that availment of said financial assistance under Res. 56 may not be done
independently of but only in conjunction with the availment of retirement benefits under RA 660, and that the former is in
augmentation or supplementation of the latter benefits.
Likewise, then SSS Administrator Cuisias historical overview of the origins and purpose of Res. 56 is very instructive
and sheds much light on the controversy:[12]
Resolution No. 56, x x x, applies where a retiring SSS employee is qualified to claim under either RA 660 (pension benefit,
that is, 5 year lump sum pension and after 5 years, life time pension), or RA 1616 (gratuity benefit plus return of
contribution), at his option. The benefits under RA 660 are entirely payable by GSIS while those under RA 1616 are entirely
shouldered by SSS except the return of contribution by GSIS.
Resolution No. 56 came about upon observation that qualified SSS employees have invariably opted to retire under RA
1616 instead of RA 660 because the total benefit under the former is much greater than the 5-year lump sum under the
latter. As a consequence, the SSS usually ended up virtually paying the entire retirement benefit, instead of GSIS which is
the main insurance carrier for government employees. Hence, the situation has become so expensive for SSS that a study
of the problem became inevitable.
As a result of the study and upon the recommendation of its Actuary, the SSS Management recommended to the Social
Security Commission that retiring employees who are qualified to claim under either RA 660 or 1616 should be encouraged
to avail for themselves the life annuity under RA 660, as amended, with the SSS providing a financial assistance equivalent
to the difference between the benefit under RA 1616 (gratuity plus return of contribution) and the 5-year lump sum pension
under RA 660.
The Social Security Commission, as the policy-making body of the SSS approved the recommendation in line with its
mandate to insure the efficient,honest and economical administration of the provisions and purposes of this Act. (Section 3
(c) of the Social Security Law).
Necessarily, the situation was reversed with qualified SSS employees opting to retire under RA No. 660 or RA 1146 instead
of RA 1616, resulting in substantial savings for the SSS despite its having to pay financial assistance.
Until Resolution No. 56 was questioned by COA. (underscoring part of original text; italics ours)
Although such financial assistance package may have been instituted for noble, altruistic purposes as well as from self-
interest and a desire to cut costs on the part of the SSS, nevertheless, it is beyond any dispute that such package
effectively constitutes a supplementary retirement plan. The fact that it was designed to equalize the benefits receivable
from RA 1616 with those payable under RA 660 and make the latter program more attractive, merely confirms the foregoing
finding.
That the Res. 56 package is labelled financial assistance does not change its essential nature. Retirement benefits are,
after all, a form of reward for an employees loyalty and service to the employer, and are intended to help the employee
enjoy the remaining years of his life, lessening the burden of worrying about his financial support or upkeep. [13] On the other
hand, a pension partakes of the nature of retained wages of the retiree for a dual purpose: to entice competent people to
enter the government service, and to permit them to retire from the service with relative security, not only for those who
have retained their vigor, but more so for those who have been incapacitated by illness or accident.[14]
Is SSS Resolution No. 56 then within the ambit of and thus proscribed by Sec. 28 (b) of CA 186 as amended by RA
4968?
We answer in the affirmative. Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any
insurance or retirement plan -- other than the GSIS -- for government officers and employees, in order to prevent the undue
and inequitous proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law and is
therefore invalid, void and of no effect. To ignore this and rule otherwise would be tantamount to permitting every other
government office or agency to put up its own supplementary retirement benefit plan under the guise of such financial
assistance.
We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it must have had, not
only in reducing costs and expenses on the part of the SSS in connection with the pay-out of retirement benefits and
gratuities, but also in improving the quality of life for scores of retirees. But it is simply beyond dispute that the SSS had no
authority to maintain and implement such retirement plan, particularly in the face of the statutory prohibition. The SSS
cannot, in the guise of rule-making, legislate or amend laws or worse, render them nugatory.
It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail.[15] A rule or
regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation
to be valid.[16] The rule-making power of a public administrative body is a delegated legislative power, which it may not use
either to abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope
intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by
such a body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations
which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which
created it, or which are in derogation of, or defeat, the purpose of a statute.[17] Though well-settled is the rule that retirement
laws are liberally interpreted in favor of the retiree,[18] nevertheless, there is really nothing to interpret in either RA 4968 or
Res. 56, and correspondingly, the absence of any doubt as to the ultra-vires nature and illegality of the disputed resolution
constrains us to rule against petitioners.
As a necessary consequence of the invalidity of Res. 56, we can hardly impute abuse of discretion of any sort to
respondent Commission for denying petitioners request for reconsideration of the 3rd Indorsement of July 10, 1989. On the
contrary, we hold that public respondent in its assailed Decision acted with circumspection in denying petitioners claim. It
reasoned thus:
After a careful evaluation of the facts herein obtaining, this Commission finds the instant request to be devoid of merit. It
bears stress that the financial assistance contemplated under SSS Resolution No. 56 is granted to SSS employees who opt
to retire under R.A. No. 660. In fact, by the aggrieved parties own admission (page 2 of the request for reconsideration
dated January 12, 1993), it is a financial assistance granted by the SSS management to its employees, in addition to the
retirement benefits under Republic Act No. 660. (underscoring supplied for emphasis) There is therefore no question, that
the said financial assistance partakes of the nature of a retirement benefit that has the effect of modifying existing retirement
laws particularly R.A. No. 660.
Petitioners also asseverate that the scheme of financial assistance under Res. 56 may be likened to the monetary
benefits of government officials and employees who are paid, over and above their salaries and allowances as provided by
statute, an additionalhonorarium in varying amounts. We find this comparison baseless and misplaced. As clarified by the
Solicitor General:[19]
Petitioners comparison of SSS Resolution No. 56 with the honoraria given to government officials and employees of the
National Prosecution Service of the Department of Justice, Office of the Government Corporate Counsel and even in the
Office of the Solicitor General is devoid of any basis. The monetary benefits or honoraria given to these officials or
employees are categorized as travelling and/or representation expenses which are incurred by them in the course of
handling cases, attending court/administrative hearings, or performing other field work. These monetary benefits are given
upon rendition of service while the financial benefits under SSS Resolution No. 56 are given upon retirement from service.
In a last-ditch attempt to convince this Court that their position is tenable, petitioners invoke equity. They believe that
they are deserving of justice and equity in their quest for financial assistance under SSS Resolution No. 56, not so much
because the SSS is one of the very few stable agencies of government where no doubt this recognition and reputation is
earned x x x but more so due to the miserable scale of compensation granted to employees in various agencies to include
those obtaining in the SSS.[20]
We must admit we sympathize with petitioners in their financial predicament as a result of their misplaced decision to
avail of retirement benefits under RA 660, with the false expectation that financial assistance under the disputed Res. 56 will
also materialize. Nevertheless, this Court has always held that equity, which has been aptly described as justice outside
legality, is applied only in the absence of, and never against, statutory law or judicial rules of procedure. [21] In this case,
equity cannot be applied to give validity and effect to Res. 56, which directly contravenes the clear mandate of the
provisions of RA 4968.
Likewise, we cannot but be aware that the clear imbalance between the benefits available under RA 660 and those
under RA 1616 has created an unfair situation for it has shifted the burden of paying such benefits from the GSIS (the main
insurance carrier of government employees) to the SSS. Without the corrective effects of Res. 56, all retiring SSS
employees without exception will be impelled to avail of benefits under RA 1616. The cumulative effect of such availments
on the financial standing and stability of the SSS is better left to actuarians. But the solution or remedy for such situation can
be provided only by Congress. Judicial hands cannot, on the pretext of showing concern for the welfare of government
employees, bestow equity contrary to the clear provisions of law.
Nevertheless, insofar as herein petitioners are concerned, this Court cannot just sit back and watch as these two
erstwhile government employees, who after spending the best parts of their lives in public service have retired hoping to
enjoy their remaining years, face a financially dismal if not distressed future, deprived of what should have been due them
by way of additional retirement benefits, on account of a bureaucratic boo-boo improvidently hatched by their higher-ups. It
is clear to our mind that petitioners applied for benefits under RA 660 only because of the incentives offered by Res. 56, and
that absent such incentives, they would have without fail availed of RA 1616 instead.We likewise have no doubt that
petitioners are simply innocent bystanders in this whole bureaucratic rule-making/financial scheme-making drama, and that
therefore, to the extent possible, petitioners ought not be penalized or made to suffer as a result of the subsequently
determined invalidity of Res. 56, the promulgation and implementation of which they had nothing to do with.
And here is where equity may properly be invoked: since SSS employees who are qualified for compulsory retirement
at age 65 or for optional retirement at a lower age are entitled to either the life annuity under R.A. 660, as amended, or the
gratuity under R.A. 1616, as amended,[22] it appears that petitioners, being qualified to avail of benefits under RA 660, may
also readily qualify under RA 1616. It would therefore not be misplaced to enjoin the SSS to render all possible assistance
to petitioners for the prompt processing and approval of their applications under RA 1616, and in the meantime, unless
barred by existing regulations, to advance to petitioners the difference between the amounts due under RA 1616, and the
amounts they already obtained, if any, under RA 660.
WHEREFORE, the petition is hereby DISMISSED for lack of merit, there having been no grave abuse of discretion on
the part of respondent Commission. The assailed Decision of public respondent is AFFIRMED, and SSS Resolution No. 56
is hereby declaredILLEGAL, VOID AND OF NO EFFECT. The SSS is hereby urged to assist petitioners and facilitate their
applications under RA 1616, and to advance to them, unless barred by existing regulations, the corresponding amounts
representing the difference between the two benefits programs. No costs.
SO ORDERED.
THIRD DIVISION
[G.R. No. 109193. February 1, 2000]
REPUBLIC OF THE PHILIPINES, petitioner, vs. THE COURT OF APPEALS and PRECISION PRINTING
INC. respondents.
DECISION
PURISIMA, J.:
At bar is a Petition for Review under Rule 45 seeking to set aside the decision of the Court of Appeals [1] affirming the Order
of dismissal by the Trial Court[2] of Quezon City in the case, entitled "Republic of the Philippines vs. Precision Printing,
Inc.", on the ground of extinguishment of tax liability as Precision Printing, Inc., had availed of tax amnesty under Executive
Order Nos. 54 and 64.
On June 10, 1985, the Bureau of Internal Revenue (BIR) issued an assessment notice and letter against Precision Printing,
Inc., demanding payment of the sum of P248,406.11. Despite repeated demands, however, the latter failed to pay within the
period prescribed by law. Consequently, the said tax assessment became final and demandable.
On October 31, 1986, it turned out that Printing Precision, Inc. filed a Tax Amnesty Return together with the Statements of
Net Worth as of December 31, 1985 and December 31, 1980 and other supporting documents under File No. 00696 and its
Amended Tax Return filed on December 21, 1986.[3]
The said amnesty return was fired pursuant to Executive Order No. 41, as amended by Executive Order Nos. 54 and 64
respectively, dated August 26, 1986, November 4, 1986, and November 17, 1986.
On June 9, 1990, BIR brought before Branch CV of the Regional Trial Court of Quezon City, a Complaint against Precision
Printing, Inc. for the collection of the amount of P248,406.11 as deficiency income tax for 1981 inclusive of interest.
The defendant, Precision Printing, Inc., put up the affirmative defense that it is not liable for such tax deficiencies because it
availed of tax amnesty under Executive Order No. 41, as amended by Executive Order Nos. 54 and 64.
On June 27, 1991, after a preliminary hearing on the aforestated affirmative defense, Presiding Judge Tomas V. Tadeo of
Branch 105 of Regional Trial Court of Quezon City, issued an Order of dismissal, ratiocinating thus:
"WHEREFORE, premises considered, the Court finds defendant's affirmative defense of availment of tax
amnesty to be well-taken and hereby dismisses this case. No costs.
SO ORDERED."
The aforesaid Order was seasonably appealed to the Court of Appeals but to no avail. On February 23, 1993, the Court of
Appeals promulgated its Decision affirming the appealed Order of Dismissal.
Dissatisfied therewith, the Republic of the Philippines has come to this Court via the present Petition for Review under Rule
45 of the Revised Rules of Court; posing for resolution the sole issue:
"WHETHER OR NOT THE RESPONDENT COURT ERRED IN AFFIRMING THE TRIAL COURT'S
FINDING THAT PRIVATE RESPONDENT'S TAX LIABILITY WAS EXTINGUISHED WHEN IT AVAILED
OF TAX AMNESTY UNDER EXECUTIVE ORDER NO. 41."
Petitioner anchors its submission on the fact that the respondent corporation was already assessed of its tax deficiency prior
to the promulgation of Revenue Memorandum 4-87 which implemented E.O. 41. The tax assessment letter was received by
respondent corporation on June 10, 1985 while the said Revenue Memorandum 4-87 explicitly refers only to assessments
made after August 21, 1986.
The issue raised by petitioner is not a novel one. It was settled in the case of Commissioner of Internal Revenue vs.
Court of Appeals, 240 SCRA 368, wherein the issues raised for resolution were similar to the theories and issues here.
Executive Order No. 41 (E.O. 41) declaring a tax amnesty on unpaid income taxes was promulgated on August 22, 1986. It
was later amended to include estate and donor's taxes and taxes on business, for the taxable years 1981-1985. Thereafter,
Revenue Memorandum 4-87 (R.O. 4-87) issued to implement the law.
However, R.O. 4-87 as the following provisions:
"TO: ALL INTERNAL REVENUE OFFICERS AND OTHER CONCERNED:
1.02. To give effect and substance to the immunity provisions of the Tax Amnesty under Executive Order
No. 41, as expanded by Executive Order No. 64, the following instructions are hereby issued:
xxx xxx xxx
1.02. A certification by the Tax Amnesty Implementation officer of the fact of availment of the said tax
amnesty shall be a sufficient basis for:
xxx xxx xxx
1.02.3. In appropriate cases, the cancellation/withdrawal of assessment notice and letters of demand,
issued after August 21, 1986 for the collection of income, business, estate or donor's taxes during the
taxable years."[4]
It is therefore decisively clear that R.O. 4-87 reckoned the applicability of the tax amnesty from August 22, 1986 - the date
when E.O. 41 took effect. However, Executive Order No. 41 contained no limitation whatsoever delimiting its applicability to
assessments made prior to its effectivity. Rather, the said E.O. 41 merely provided for a general statement covering all tax
liabilities incurred from 1981-1985.
Thus, as to whether assessments made prior to August 21, 1986 are still covered by Executive Order No. 41 the Court had
this to say:
"If, as the Commissioner argues, Executive Order No. 41 had not been intended to include 1981-1985 tax
liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so
provided in its exclusionary clauses. It did not. The conclusion is unavoidable, and it is that the executive
order has been designed to be in the nature of a general grant of tax amnesty subject only to cases
specifically excepted by it."[5]
The above ruling is in consonance with the tenet in administrative law that administrative issuances seeking to carry into
effect an act of Congress must be in harmony with the provisions of the law, it cannot modify nor supplant the same. [6]
WHEREFORE, the decision of the court of Appeals dated February 23, 1993 in CA-G.R. CV No. 34003 is hereby
AFFIRMED without any pronouncement as to costs.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-50908 January 31, 1984
MARY CONCEPCION BAUTISTA and ENRIQUE D. BAUTISTA, petitioners,

vs.
ALFREDO L. JUINIO, ROMEO F. EDU and FIDEL V. RAMOS, respondents.
Mary Concepcion Bautista for and in his own behalf.
The Solicitor General for respondents.
FERNANDO, C.J.:
The validity of an energy conservation measure, Letter of Instruction No. 869, issued on May 31, 1979 the response to
the protracted oil crisis that dates back to 1974 is put in issue in this prohibition proceeding filed by petitioners, spouses
Mary Concepcion Bautista and Enrique D. Bautista, for being allegedly violative of the due process and equal protection
guarantees 1 of the Constitution. The use of private motor vehicles with H and EH plates on week-ends and holidays was
banned from "[12:00] a.m. Saturday morning to 5:00 a.m. Monday morning, or 1:00 a.m. of the holiday to 5:00 a.m. of the
day after the holiday." 2 Motor vehicles of the following classifications are exempted: (a) S (Service); (b) T (Truck); (e) DPL
(Diplomatic); (d) CC (Consular Corps); (e) TC (Tourist Cars). 3 Pursuant thereto, respondent Alfredo L. Juinio, then Minister
of Public Works, Transportation and Communications and respondent Romeo P. Edu, then Commissioner of Land
Transportation Commission issued on June 11, 1979, Memorandum Circular No. 39, which imposed "the penalties of fine,
confiscation of vehicle and cancellation of registration on owners of the above-specified vehicles" found violating such Letter
of Instruction.4 It was then alleged by petitioners that "while the purpose for the issuance of the LOI 869 is laudable, to wit,
energy conservation, the provision banning the use of H and EH [vehicles] is unfair, discriminatory, [amounting to an]
arbitrary classification" and thus in contravention of the equal protection clause. 5 Moreover, for them, such Letter of
Instruction is a denial of due process, more specifically, "of their right to use and enjoy their private property and of their
freedom to travel and hold family gatherings, reunions and outings on week-ends and holidays," inviting attention to the fact
that others not included in the ban enjoying "unrestricted freedom." 6 It would follow, so they contend that Memorandum
Circular No. 39 imposing penalties of fine, confiscation of the vehicle and cancellation of license is likewise unconstitutional,
for being violative of the doctrine of "undue delegation of legislative power." 7 It is to be noted that such Memorandum
Circular does not impose the penalty of confiscation but merely that of impounding, fine, and for the third offense that of
cancellation of certificate of registration and for the rest of the year or for ninety days whichever is longer.
This Court gave due course to the petition requiring respondent to answer. There was admission of the facts as
substantially alleged except, as previously noted, that the ban starts at 12:00 a.m. rather than 1:00 a.m. of a Saturday or of
a holiday and as to the mention of a Willy's Kaiser jeep being registered in the name of a certain Teresita Urbina, about
which respondents had no knowledge. There was a denial of the allegations that the classification of vehicles into heavy H
and extra heavy (EH) on the other hand and light and bantam on the other hand was violative of equal protection and the
regulation as to the use of the former cars on the dates specified a transgression of due process. The answer likewise
denied that there was an undue delegation of legislative power, reference being made to the Land Transportation and
Traffic Code. 8 There was also a procedural objection raised, namely, that what is sought amounts at most to an advisory
opinion rather than an ajudication of a case or controversy.
Petitioners filed a motion to be allowed to reply to the answer. It was granted. The reply, considering its exhaustive
character serving as its memorandum, stressed anew what it emphasized as the arbitrary, unreasonable, and oppressive
aspects of the challenged Letter of Instruction and Memorandum Circular No. 39. It disputed what it characterized as an
"erroneous and arbitrary presumption that heavy car owners unnecessarily use and therefore waste gasoline whenever they
drive their cars on week-ends and holidays;" 9 it stigmatized the ban as defeating its "avowed purpose in the case of the
affluent who own not only heavy limousines but also many small cars [as] they may be compelled to use at least two small
cars;" 10 referred to the high cost of taxis or other public transports for those "not able to afford expensive small cars
[possibly] only one heavy and possible old model;" 11 cited the case of "many eight cylinder vehicles which because of their
weight have been registered as light but in fact consume more or as much gasoline as the banned vehicles." 12 Their
conclusion is that "the ban imposed, in result and effect is class legislation." 13
The parties were required to submit memoranda. Respondents did so but not petitioners. They relied on their reply to the
answer as noted, a rather comprehensive pleading. For reasons to be set forth, this Court holds that the petition cannot
prosper.
1. First as to the procedural objection. In the memorandum for respondents, one of the issues raised was whether "the
power of judicial review may be invoked considering the inadequacy of the record and the highly abstract and academic
questions raised by the petitioners." 14 It is inaccurate to say that the record is inadequate. It does not admit of doubt that
the ban applies to petitioners who are "the registered owners of an eight cylinder 1969 Buick, and the vendees of a six
cylinder Willy's kaiser jeep, which are both classified as heavy or H." 15 To that extent, therefore, the enforcement of the
assailed Letter of Instruction will amount to a deprivation of what otherwise would be a valid exercise of a property right.
Thus they fall squarely within "the unchallenged rule" as to who may raise a constitutional question, namely, to quote the
language of Justice Laurel in the leading case of People v. Vera, 16 "that the person who impugns the validity of a statute
must have a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result
of its enforcement. 17 Moreover, that rule has been considerably relaxed. 18 The question then is neither abstract nor
academic as contended by respondents.
2. There is, however, this formidable obstacle that confronts petitioners. What they seek is for this Court to hold that a Letter
of Instruction, a regulatory measure precisely enacted to cope with the serious and grave problem of energy conservation, is
void on its face. Such a task is rendered unusually difficult by what has been referred to by Justice Laurel in the leading
case of Angara v. Electoral Commission 19 as the "presumption of constitutionality" and by the same jurist in the case
of People v. Vera 20 in slightly different words "a presumption that such an act falls within constitutional limitations." There is
need then for a factual foundation of invalidity. In the language of Ermita-Malate Hotel & Motel Operations Association, Inc.
v. City Mayor or Manila: "It admits of no doubt therefore that there being a presumption of validity, the necessity for
evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face, which is not the case here. The
principle has been nowhere better expressed than in the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,
where the American Supreme Court through Justice Brandeis tersely and succinctly summed up the matter thus: 'The
statute here questioned deals with a subject clearly within the scope of the police power. We are asked to declare it void on
the ground that the specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due process
of law. As underlying questions of fact may condition the constitutionality of legislation of this character, the presumption of
constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute.' " 21
3. It is true, of course, that there may be instances where a police power measure may, because of its arbitrary, oppressive
or unjust character, be held offensive to the due process clause and, therefore, may, when challenged in an appropriate
legal proceeding, be declared void on its face. This is not one of them. A recital of the whereas clauses of the Letter of
Instruction makes it clear. Thus: "[Whereas], developments in the international petroleum supply situation continue to follow
a trend of limited production and spiralling prices thereby precluding the possibility of immediate relief in supplies within the
foreseeable future; [Whereas], the uncertainty of fuel supply availability underscores a compelling need for the adoption of
positive measures designed to insure the viability of the country's economy and sustain its developmental growth;
[Whereas], to cushion the effect of increasing oil prices and avoid fuel supply disruptions, it is imperative to adopt a program
directed towards the judicious use of our energy resources complemented with intensified conservation efforts and efficient
utilization thereof; * * *." 22That is undeniable is that the action taken is an appropriate response to a problem that presses
urgently for solution. It may not be the only alternative, but its reasonableness is immediately apparent. Thus, to repeat,
substantive due process, which is the epitome of reasonableness and fair play, is not ignored, much less infringed.
4. In the interplay between such a fundamental right and police power, especially so where the assailed governmental
action deals with the use of one's property, the latter is accorded much leeway. That is settled law. What is more, it is good
law. Due process, therefore, cannot be validly invoked. As stressed in the cited Ermita-Malate Hotel decision: "To hold
otherwise would be to unduly restrict and narrow the scope of police power which has been properly characterized as the
most essential, insistent and the least limitable of powers, extending as it does 'to all the great public needs.' It would be, to
paraphrase another leading decision, to destroy the very purpose of the state if it could be deprived or allowed itself to be
deprived of its competence to promote public health, public morals, public safety and the general welfare. Negatively put,
police power is 'that inherent and plenary power in the State which enables it to prohibit all that is hurtful to the comfort,
safety, and welfare of society.' " 23
5. The due process question having been disposed of, there is still the objection based on the equal protection clause to be
considered. A governmental act may not be offensive to the due process clause, but may run counter to such a guarantee.
Such is the case when there is no rational basis for the classification followed. That is the point raised by petitioners. For
them, there is no rational justification for the ban being imposed on vehicles classified as heavy (H) and extra-heavy (EH),
for precisely those owned by them fall within such category. Tested by the applicable standard that must be satisfied to
avoid the charge of a denial of equal protection, the objection of petitioners is shown to be lacking in merit. Such a
classification on its face cannot be characterized as an affront to reason. A legal norm according to J.M. Tuason & Co., Inc.
vs. Land Tenure Administration, 24 "whether embodied in a rule, principle, or standard, constitutes a defense against
anarchy at one extreme and tyranny at the other. Thereby, people living together in a community with its myriad and
complex problems can minimize the friction and reduce the conflicts, to assure, at the very least, a peaceful ordering of
existence. The Ideal situation is for the law's benefits to be available to all, that none be placed outside the sphere of its
coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial
uniformity, which is of the very essence of the Idea of law. The actual, given things as they are and likely to continue to be,
cannot approximate the Ideal. Nor is the law susceptible to the reproach that it does not take into account the realties of the
situation. * * * To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into
the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection
clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common
weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason. It suffices
then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be
treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed.
Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to
every person under circumstances, which if not Identical are analogous. If law be looked upon in terms of burden or
charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group
equally binding on the rest." 25
6. Nor does it militate against the validity of the Letter of Instruction just because the ban imposed does not go as far as it
could have and therefore could be less efficacious in character. That was the solution which for the President expressing a
power validly lodged in him, recommended itself. There was a situation that called for a corrective measure. He decided that
what was issued by him would do just that or, at the very least, help in easing the situation. That it did not cover other
matters which could very well have been regulated does not call for a declaration of nullity. The President, to
paraphrase Lutz v. Araneta, 26 "is not required by the Constitution to adhere to the policy of all or none." 27 It is quite obvious
then that no equal protection question arises.
7. It may not be amiss to refer to a 1981 American Supreme Court decision, Minnesota v. Clover Leaf Creamery
Company. 28 Respondent along with several other business corporations adversely affected involved in the manufacture
and utilization of plastic milk containers filed suit in a Minnesota district court seeking to enjoin enforcement of a Minnesota
statute banning the retail sale of milk in plastic nonreturnable, nonrefillable containers, but permitting such sale in other
nonreturnable, nonrefillable containers, such as paperboard, milk cartons. After conducting extensive evidentiary hearings,
the Minnesota court enjoined enforcement of the statute, finding that it violated among others the equal protection clause of
the Fourteenth Amendment to the Federal Constitution. The Minnesota Supreme Court affirmed. On certiorari, the United
States Supreme Court reversed, with only Justice Stevens dissenting. The opinion by Justice Brennan noted that
"proponents of the legislation argued that it would promote resource conservation, ease solid waste disposal problems, and
conserve energy." 29 That sufficed for the Court to conclude "that the ban on plastic nonreturnable milk containers bears a
rational relation to the State's objectives, and must be sustained under the Equal Protection Clause." 30 It does show that
notwithstanding the "new equal protection approach" with its emphasis on "suspect classification" and "fundamental rights
and interests standard," a concept so ably expounded by professor Gunther, the "rational relation test" 31 still retains its
validity. Not that there could be any objection to the classification here followed as being in any way susceptible to such a
pejorative expression as "suspect" or that the assailed Letter of Instruction does not qualify under "the fundamental rights
and interests" standard
8. There was set forth in the petition what were referred to as "other reasonable measures which the authorities concerned
with energy conservation can take immediately, which are in fact acceptable and obviously called for and should have been
done long ago, to wit: 1. require and establish taxi stands equipped with efficient telephone and communication systems; 2.
strict implementation and observance of cargo truck hours on main arteries; 3. strict observance of traffic rules; 4. effective
solution of traffic problems and decongestion of traffic through rerouting and quick repair of roads and efficient operation of
double decker buses; 5. rationing of gasoline to avoid panic buying and give the private car owner the option and
responsibility of deciding on the use of his allocation; 6. allow neon and electrically devised advertising signs only from five
o'clock p.m. to nine o'clock p.m. 7. prohibit immediately the importation of heavy and luxury cars and seriously re-examine
the car manufacturing program." 32 Admittedly, such measures are conducive to energy conservation. The question before
us however is limited to whether or not Letter of Instruction 869 as implemented by Memorandum Circular No. 39 is violative
of certain constitutional rights. It goes no further than that. The determination of the mode and manner through which the
objective of minimizing the consumption of oil products may be attained is left to the discretion of the political
branches. 33 Absent therefore the alleged infringement of constitutional rights, more precisely the due process and equal
protection guarantees, this Court cannot adjudge Letter of Instruction No. 869 as tainted by unconstitutionality.
9. It was likewise contended that Memorandum Circular No. 39, issued by the then respondent Minister of Public Works,
Transportation and Communications, and then respondent Land Transportation Commissioner, imposing the penalties "of
fine, confiscation of vehicle and cancellation of license is likewise unconstitutional," petitioners invoking the principle of non-
delegation of legislative power. 34 To that extent that a Letter of Instruction may be viewed as an exercise of the decree-
making power of the President, then such an argument is futile. If, however, viewed as a compliance with the duty to take
care that the laws be faithfully executed, as a consequence of which subordinate executive officials may in turn issue
implementing rules and regulations, then the objection would properly be considered as an ultra vires allegation. There is
this relevant excerpt from Teoxon v. Member of the Board of Administrators: 35 "1. The recognition of the power of
administrative officials to promulgate rules in the implementation of the statute, necessarily limited to what is provided for in
the legislative enactment, may be found in the early case of United States v. Barriasdecided in 1908. Then came, in a 1914
decision, United States v. Tupasi Molina, a delineation of the scope of such competence. Thus: 'Of course the regulations
adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the
sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself can not be extended.
So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid.' In 1936,
in People v. Santos, this Court expressed its disapproval of an administrative order that would amount to an excess of the
regulatory power vested in an administrative official. We reaffirmed such a doctrine in a 1951 decision, where we again
made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, 'the
mandate of the Act must prevail and must be followed.' Justice Barrera, speaking for the Court in Victorias Milling Company,
Inc. v. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus: 'A rule is binding on
tile courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory granted by the
legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom * * *. On the other
hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law
means.' It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides,
to take care that the laws be faithfully executed. No lesser administrative executive office or agency then can, contrary to
the express language of the Constitution, assert for itself a more extensive prerogative." 36 It was alleged in the Answer of
Solicitor General Estelito P. Mendoza that Letter of Instruction 869 and Memorandum Circular No. 39 were adopted
pursuant to the Land Transportation and Traffic Code. 37 It contains a specific provision as to penalties. 38 Thus: "For
violation of any provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore specifically punished, a
fine of not less than ten nor more than fifty pesos shall be imposed." 39 Memorandum Circular No. 39 cannot be held to
be ultra vires as long as the fine imposed is not less than ten nor more than fifty pesos. As to suspension of
registration, 40 the Code, insofar as applicable, provides: "Whenever it shall appear from the records of the Commission that
during any twelve-month period more than three warnings for violations of this Act have been given to the owner of a motor
vehicle, or that the said owner has been convicted by a competent court more than once for violation of such laws, the
Commissioner may, in his discretion, suspend the certificate of registration for a period not exceeding ninety days and,
thereupon, shall require the immediate surrender of the number plates * * *." 41 It follows that while the imposition of a fine or
the suspension of registration under the conditions therein set forth is valid under the Land Transportation and Traffic Code,
the impounding of a vehicle finds no statutory justification. To apply that portion of Memorandum Circular No. 39 would
be ultra vires. It must likewise be made clear that a penalty even if warranted can only be imposed in accordance with the
procedure required by law. 42
WHEREFORE, the petition is dismissed.

SUPREME COURT
Manila
EN BANC
G.R. No. 91023 July 13, 1990
METROPOLITAN TRAFFIC COMMAND WEST TRAFFIC DISTRICT, petitioner,

vs.
HON. ARSENIO M. GONONG, in his capacity as Presiding Judge of the Regional Trial Court, Branch 8 at Manila,
and DANTE S. DAVID, respondents.
Dante S. David for and in his own behalf as private respondent.
CRUZ, J.:
We deal here with a practice known to many motorists in Metro Manila: the removal of the license plates of illegally parked
vehicles. This was challenged by the private respondent in the regional trial court of Manila, which held the practice
unlawful. The petitioner is now before us, urging reversal of the decision for grave abuse of discretion.
The original complaint was filed with the said court on August 10, 1989, by Dante S. David, a lawyer, who claimed that the
rear license plate, of his car was removed by the Metropolitan Traffic Command while the vehicle was parked on Escolta.
He questioned the petitioner's act on the ground not only that the car was not illegally parked but, more importantly, that
there was no ordinance or law authorizing such removal. He asked that the practice be permanently enjoined and that in the
meantime a temporary restraining order or a writ of preliminary injunction be issued.
Judge Arsenio M. Gonong issued a temporary restraining order on August 14, 1989, and hearings on the writ of preliminary
injunction were held on August 18, 23, and 25, 1989. The writ was granted on this last date. The parties also agreed to
submit the case for resolution on the sole issue of whether there was a law or ordinance authorizing the removal of the
license plates of illegally parked vehicles. The parties then submitted simultaneous memoranda in support of their
respective positions, following which the respondent judge rendered the assailed decision.
In ruling for the complainant, Judge Gonong held that LOI 43, which the defendant had invoked, did not empower it "to
detach, remove and confiscate vehicle plates of motor vehicles illegally parked and unattended as in the case at bar. It
merely authorizes the removal of said vehicles when they are obstacles to free passage or continued flow of traffic on
streets and highways." At any rate, he said, the LOI had been repealed by PD 1605. Moreover, the defendant had not been
able to point to any MMC rule or regulation or to any city ordinance to justify the questioned act. On the allegation that the
practice was "the root cause of graft and corruption or at the very least the equivalent of street racket among defendant's
deployed agents," His Honor made the following pointed observations:
At this juncture, it may not be amiss to say, that if the arbitrary and capricious detachment and confiscation
of vehicles plates illegally parked and unattended as in the act complained of in the instant case, the image
of the man clothed in a traffic or police uniform will be greatly impaired if not cursed with disrespect on the
part of those who have suffered at his hands. Worse, he will cease (if he had not already ceased) to be the
law-abiding, courageous and valiant protector of a citizen of the Republic that he is meant to be, and
instead his real oppressor and enemy, thereby fortifying the contemporaneous public perception that he is
a dyed-in-the-wool extortionist if not an unmitigated chiseler. 1
It bears noting that this petition should have been filed first with the Court of Appeals, which has concurrent jurisdiction with
this Court on decisions of the regional trial courts involving questions of law. However, in view of the importance of the issue
raised, we have decided to take cognizance thereof under Rule 65 of the Rules of Court so we can address and resolve the
question directly.
Upon the filing of this petition, we issued a temporary restraining order dated February 6, 1990, to prevent enforcement of
the said decision until further orders from this Court. Thereafter, we required a comment from the private respondent, to
which the petitioner filed a reply as also directed.
The petitioner reiterates and reinforces its argument in the court below and insists that LOI 43 remains in force despite the
issuance of PD 1605. It contends that there is no inconsistency between the two measures because the former deals with
illegally parked vehicles anywhere in the Philippines whereas the latter deals with the regulation of the flow of traffic in the
Metro Manila area only. The two measures may be enforced together because implied repeals are not favored and,
furthermore, to look at them another way, LOI 43 is the special law dealing only with illegal parking while PD 1605 is the
general law dealing with all other kinds of traffic violations. The special law must of course prevail over the general law. The
petitioner also deplores the above-quoted remarks of the trial judge, pointing out that the parties had agreed to limit the
issue to whether there was a statutory basis for the act complained of. And even assuming that abuses have been
committed in the enforcement of LOI 43, the remedy is not to disregard it or consider it revoked but to prosecute the guilty
parties.
In his comment, the private respondent argues that LOI 43 has been repealed by PD 1605, which specifies all the sanctions
available against the various traffic violations, including illegal parking. He stresses that removal and confiscation of the
license plates of illegally parked vehicles is not one of them, the penalties being limited in the decree to imposition of fine
and suspension or revocation of driver's licenses or certificates of public convenience, etc. Expressio unius est exclusio
alterius. He agrees that the special law prevails over the general law but maintains it is PD 1605 that is the special law
because it is applicable only on Metro Manila and LOI 43 that is the general law because it was intended to operate
throughout the country. As for his allegation that the challenged practice is a source of graft, he maintains that it was not
improper to discuss it in his memorandum because it was pertinent to the central issue under consideration. Finally, he
claims that removal and confiscation of the license plate without notice and hearing violates due process because such
license plate is a form of property protected by the Bill of Rights against unlawful deprivation.
In its reply, the petitioner faults the private respondent for belatedly raising the constitutionality of LOI 43, suggesting faintly
that this should not be permitted. In any case, it maintains, the license plate is not property in the constitutional sense, being
merely the identification of the vehicle, and its "temporary confiscation" does not deprive the owner of the use of the vehicle
itself. Hence, there is no unlawful taking under the due process clause. The petitioner also takes issue with the contention
that it is PD 1605 that should be considered the special law because of its limited territorial application. Repeal of LOI 43 on
that ground would run counter to the legislative intention as it is in fact in Metro Manila that the problem of illegal parking is
most acute.
LOI 43, entitled Measures to Effect a Continuing Flow of Transportation on Streets and Highways, was issued on November
28, 1972, with the following pertinent provisions:
Motor vehicles that stall on the streets and highways, streets and sidewalks, shall immediately be removed
by their owners/users; otherwise said vehicles shall be dealt with and disposed in the manner stated
hereunder;
1. For the first offense the stalled or illegally parked vehicle shall be removed, towed and impounded at the
expense of the owner, user or claimant;
2. For the second and subsequent offenses, the registry plates of the vehicles shall be confiscated and the
owner's certificate of registration cancelled. (Emphasis supplied).
PD 1605 (Granting the Metropolitan Manila Commission Central Powers Related to Traffic Management, Providing
Penalties, and for Other Purposes) was issued, also by President Marcos, on November 21, 1978, and pertinently provides:
Section 1. The Metropolitan Manila Commission shall have the power to impose fines and otherwise
discipline drivers and operators of motor vehicles for violations of traffic laws, ordinances, rules and
regulations in Metropolitan Manila in such amounts and under such penalties as are herein prescribed. For
his purpose, the powers of the Land Transportation Commission and the Board of Transportation under
existing laws over such violations and punishment thereof are hereby transferred to the Metropolitan Manila
Commission. When the proper penalty to be imposed is suspension or revocation of driver's license or
certificate of public convenience, the Metropolitan Manila Commission or its representatives shall suspend
or revoke such license or certificate. The suspended or revoked driver's license or the report of suspension
or revocation of the certificate of public convenience shall be sent to the Land Transportation Commission
or the Board of Transportation, as the case may be, for their records update.
xxx xxx xxx
Section 3. Violations of traffic laws, ordinances, rules and regulations, committed within a twelve-month
period, reckoned from the date of birth of the licensee, shall subject the violator to graduated fines as
follows: P10.00 for the first offense, P20.00 for the second offense, P50.00 for the third offense, a one-year
suspension of driver's license for the fourth offense, and a revocation of the driver' license for the fifth
offense: Provided, That the Metropolitan Manila Commission may impose higher penalties as it may deem
proper for violations of its ordinances prohibiting or regulating the use of certain public roads, streets or
thoroughfares in Metropolitan Manila.
xxx xxx xxx
Section 5. In case of traffic violations, the driver's license shall not be confiscated but the erring driver shall
be immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall
state the violation committed, the amount of fine imposed for the violation and an advice that he can make
payment to the city or municipal treasurer where the violation was committed or to the Philippine National
Bank or Philippine Veterans Bank or their branches within seven days from the date of issuance of the
citation ticket.
If the offender fails to pay the fine imposed within the period herein prescribed, the Metropolitan Manila
Commission or the law enforcement agency concerned shall endorse the case to the proper fiscal for
appropriate proceedings preparatory to the filing of the case with the competent traffic court, city or
municipal court.
If at the time a driver renews his driver's license and records show that he has an unpaid fine, his driver's
license shall not be renewed until he has paid the fine and corresponding surcharges.
xxx xxx xxx
Section 8. Insofar as the Metropolitan Manila area is concerned, all laws, decrees, orders, ordinances, rules
and regulations, or parts thereof inconsistent herewith are hereby repealed or modified accordingly.
(Emphasis supplied).
A careful reading of the above decree will show that removal and confiscation of the license plate of any illegally parked
vehicle is not among the specified penalties. Moreover, although the Metropolitan Manila Commission is authorized by the
decree to "otherwise discipline" and "impose higher penalties" on traffic violators, whatever sanctions it may impose must be
"in such amounts and under such penalties as are herein prescribed." The petitioner has not pointed to any such additional
sanctions, relying instead on its argument that the applicable authority for the questioned act is LOI 43.
The petitioner stresses that under the decree, "the powers of the Land Transportation Commission and the Board of
Transportation over such violations and punishment thereof are (hereby) transferred to the Metropolitan Manila
Commission," and one of such laws is LOI 43. The penalties prescribed by the LOI are therefore deemed incorporated in
PD 1605 as additional to the other penalties therein specified.
It would appear that what the LOI punishes is not a traffic violation but a traffic obstruction, which is an altogether different
offense. A violation imports an intentional breach or disregard of a rule, as where a driver leaves his vehicle in a no-parking
area against a known and usually visible prohibition. Contrary to the common impression, LOI 43 does not punish illegal
parking per se but parking of stalled vehicles, i.e., those that involuntarily stop on the road due to some unexpected trouble
such as engine defect, lack of gasoline, punctured tires, or other similar cause. The vehicle is deemed illegally parked
because it obstructs the flow of traffic, but only because it has stalled. The obstruction is not deliberate. In fact, even the
petitioner recognizes that "there is a world of difference between a stalled vehicle and an illegally parked and unattended
one" and suggests a different treatment for either. "The first means one which stopped unnecessarily or broke down while
the second means one which stopped to accomplish something, including temporary rest. 2
LOI 43 deals with motor vehicles "that stall on the streets and highways' and not those that are intentionally parked in a
public place in violation of a traffic law or regulation. The purpose of the LOI evidently is to discipline the motorist into
keeping his vehicle in good condition before going out into the streets so as not to cause inconvenience to the public when
the car breaks down and blocks other vehicles. That is why, for the first offense, the stalled vehicle is immediately towed at
the owner's expense to clear the street of the traffic obstruction. Where it appears that the owner has not learned from his
first experience because the vehicle has stalled again, presumably due to his failure to repair it, the penalty shall be
confiscation of the license plate and cancellation of the certificate of registration petition.
It is worth noting that it is not the driver's license that is confiscated and canceled when the vehicle stalls on a public street.
The LOI goes against the vehicle itself. The object of the measure is to ensure that only motor vehicles in good condition
may use the public streets, and this is effected by confiscating the license plates and canceling the certificates of
registration of those vehicles that are not roadworthy.
In the case of the private respondent, it is not alleged or shown that his vehicle stalled on a public thoroughfare and
obstructed the flow of traffic. The charge against him is that he purposely parked his vehicle in a no parking area (although
this is disputed by him).itc-asl The act, if true, is a traffic violation that may not be punished under LOI 43. The applicable
law is PD 1605, which does not include removal and confiscation of the license plate of the vehicle among the imposable
penalties.
Indeed, even if LOI 43 were applicable, the penalty of confiscation would still not be justified as it has not been alleged,
much less shown, that the illegal parking was a second or subsequent offense. That circumstance must be established at a
trial before a court of justice where the vehicle owner shall have a right to be heard in his defense. The second or
subsequent offense cannot be simply pronounced by the traffic authorities without hearing and without proof. Confiscation of
the registry plate without a judicial finding that the offense charge is a second or subsequent one would, unless the owner
concedes this point, be invalid.
While it is true that the license plate is strictly speaking not a property right, it does not follow that it may be removed or
confiscated without lawful cause. Due process is a guaranty against all forms of official arbitrariness. Under the principle
that ours is a government of laws and not of men, every official must act by and within the authority of a valid law and
cannot justify the lack of it on the pretext alone of good intentions. It is recalled that more than seventy years ago, the mayor
of Manila deported one hundred seventy prostitutes to Davao for the protection of the morals and health of the city. This
Court acknowledged his praiseworthy purpose but just the same annulled his unauthorized act, holding that no one could
take the law into his own hands. 3 We can rule no less in the case before us.
We find that there is no inconsistency between LOI 43 and PD 1605, whichever is considered the special law either
because of its subject or its territorial application. The former deals with motor vehicles that have stalled on a public road
while the latter deals with motor vehicles that have been deliberately parked in a no-parking area; and while both cover
illegal parking of motor vehicles, the offense is accidental under the first measure and intentional under the second. This
explains why the sanctions are different. The purpose of the LOI is to discourage the use of the public streets by motor
vehicles that are likely to break down while that of the decree is to penalize the driver for his defiance of the traffic laws.
As it has not been shown that the private respondent's motor vehicle had stalled because of an engine defect or some other
accidental cause and, no less importantly, that it had stalled on the road for a second or subsequent time, confiscation of
the license plate cannot be justified under LOI 43. And neither can that sanction be sustained under PD 1605, which clearly
provides that "in case of traffic violations, (even) the driver's license shall not be confiscated," let alone the license plate of
the motor vehicle. If at all, the private respondent may be held liable for illegal parking only and subjected to any of the
specific penalties mentioned in Section 3 of the decree.
We recognize the problem of the traffic policeman who comes upon an illegally parked and unattended vehicle and is
unable to serve a citation on the offending driver who is nowhere in sight. But that problem is not addressed to the courts; it
is for the legislative and administrative authorities to solve. What is clear to the Court is that the difficulty cannot be avoided
by the removal of the license plate of the offending vehicle because the petitioner has not shown that this penalty is
authorized by a valid law or ordinance.
The petitioner complains that the respondent judge did not confine himself to the issue agreed upon by the parties and
made gratuitous accusations that were not only irrelevant but virtually condemned the whole traffic force as corrupt.
Assuming that this issue was indeed not properly raised at the trial, the Court is nevertheless not inhibited from considering
it in this proceeding, on the basis of its own impressions on the matter.
This Court is not isolated from the mainstream of society and secluded in a world of its own, unconcerned with the daily
lives of the rest of the nation. On the contrary, the members of this Court mix with the people and know their problems and
complaints. And among these are the alleged abuses of the police in connection with the issue now before us.
It is claimed that the removal of the license plates of illegally parked motor vehicles in Metro Manila has become a veritable
gold mine for some police officers. To be sure, we do not have hard, provable facts at hand but only vague and
unsubstantiated rumors that could be no more than malicious and invented charges. Nevertheless, these accusations have
become too prevalent and apparently too persuasive that they cannot be simply swept under the rug.
The widespread report is that civilian "agents," mostly street urchins under the control and direction of certain policemen,
remove these license plates from illegally parked vehicles and later discreetly suggest to the owners that these may be
retrieved for an unofficial fee. This ranges from P50.00 to P200.00, depending on the type of vehicle. If the owner agrees,
payment is usually made and the license plate returned at a private rendezvous. No official receipt is issued. Everything is
done quietly. The owners, it is said, prefer this kind of fast settlement to the inconvenience of an official proceeding that may
entail not only the payment of a higher fine but also other administrative impositions, like attendance at a traffic seminar.
The Court is not saying that these reports are true nor is it stigmatizing the entire police force on the basis of these
unsubstantiated charges. But it does believe and stress that the proper authorities should take official notice of these reports
instead of blandly dismissing them as mere canards that do not deserve their attention and concern. An inquiry is in our
view indicated. The old adage that where there's smoke there's fire is not necessarily true and can hardly be the rationale of
a judicial conclusion; but the Court feels just the same that serious steps should be taken, especially because of the
persistence of these charges, to determine the source of the smoke.
We realize the seriousness of our traffic problems, particularly in Metro Manila, and commend the earnest efforts of the
police to effect a smoother flow of vehicles in the public thoroughfares for the comfort and convenience of the people. But
we must add, as a reminder that must be made, that such efforts must be authorized by a valid law, which must clearly
define the offenses proscribed and as clearly specify the penalties prescribed.
WHEREFORE, the petition is DISMISSED. The Court holds that LOI 43 is valid but may be applied only against motor
vehicles that have stalled in the public streets due to some involuntary cause and not those that have been intentionally
parked in violation of the traffic laws. The challenged decision of the trial court is AFFIRMED in so far as it enjoins
confiscation of the private respondent's license plate for alleged deliberate illegal parking, which is subject to a different
penalty. The temporary restraining order dated February 6, 1990, is LIFTED.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. 101279 August 6, 1992
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,

vs.
HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as
Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,respondents.
De Guzman, Meneses & Associates for petitioner.
GRIO-AQUINO, J.:
This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters
(PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the
Administrator of the Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLE
Department Order No. 16, Series of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily
suspending the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and vesting in the
DOLE, through the facilities of the POEA, the task of processing and deploying such workers.
PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by
the POEA, to engaged in the business of obtaining overseas employment for Filipino landbased workers, including domestic
helpers.
On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong
Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the
recruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE
itself, through the POEA took over the business of deploying such Hong Kong-bound workers.
In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers
going to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily
suspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine Overseas
Employment Administration shall take over the processing and deployment of household workers bound for
Hong Kong, subject to guidelines to be issued for said purpose.
In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regional
offices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective
domestic helpers to Hong Kong on a regional basis.
For compliance. (Emphasis ours; p. 30, Rollo.)
Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991,
providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the
accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers.
Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to
Hong Kong.
Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary
government processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the
temporary suspension of recruitment by private employment agencies for said skill and host market, the
following guidelines and mechanisms shall govern the implementation of said policy.
I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU)
An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA
shall take charge of the various operations involved in the Hong Kong-DH industry segment:
The HWPU shall have the following functions in coordination with appropriate units and other entities
concerned:
1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies
2. Manpower Pooling
3. Worker Training and Briefing
4. Processing and Deployment
5. Welfare Programs
II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies
or Principals
Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with
the HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong.
xxx xxx xxx
X. Interim Arrangement
All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July
1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed
with the HWPU.
Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a list of
their accepted applicants in their pool within the last week of July. The last day of acceptance shall be July
31 which shall then be the basis of HWPU in accepting contracts for processing. After the exhaustion of
their respective pools the only source of applicants will be the POEA manpower pool.
For strict compliance of all concerned. (pp. 31-35, Rollo.)
On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of
employment contracts of domestic workers for Hong Kong.
TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong
Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and
deployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which have
been attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the
POEA Employment Contracts Processing Branch up to 15 August 1991 only.
Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit
under the new scheme which requires prior accreditation which the POEA.
Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache,
Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who
failed to have themselves accredited in Hong Kong may proceed to the POEA-OWWA Household Workers
Placement Unit in Manila for accreditation before their recruitment and processing of DHs shall be allowed.
Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off
period shall submit this list of workers upon accreditation. Only those DHs in said list will be allowed
processing outside of the HWPU manpower pool.
For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.)
On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA
circulars and to prohibit their implementation for the following reasons:
1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority
in issuing said circulars;
2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair
and oppressive; and
3. that the requirements of publication and filing with the Office of the National Administrative Register were
not complied with.
There is no merit in the first and second grounds of the petition.
Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement
activities.
Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulatethe
recruitment and placement activities of all agencies within the coverage of this title [Regulation of
Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions of this title. (Emphasis ours.)
On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on
May 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and
the overseas employment functions of the Bureau of Employment Services, is broad and far-ranging for:
1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the
power and duty:
"2. To establish and maintain a registration and/or licensing system to regulate private
sector participation in the recruitment and placement of workers, locally and overseas, . . ."
(Art. 15, Labor Code, Emphasis supplied). (p. 13, Rollo.)
2. It assumed from the defunct Overseas Employment Development Board the power and duty:
3. To recruit and place workers for overseas employment of Filipino contract workers on a
government to government arrangement and in such other sectors as policy may dictate . .
. (Art. 17, Labor Code.) (p. 13, Rollo.)
3. From the National Seamen Board, the POEA took over:
2. To regulate and supervise the activities of agents or representatives of shipping

companies in the hiring of seamen for overseas employment; and secure the best possible
terms of employment for contract seamen workers and secure compliance therewith. (Art.
20, Labor Code.)
The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and
oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177
SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities.
"Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and
dispatch than can be expected from the legislature or the courts of justice" (Ibid.).
It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances
discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred"
upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of
the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to
confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote,
preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons"
(Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).
The Solicitor General, in his Comment, aptly observed:
. . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope or area
of petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers
for Hong Kong till after the establishment of the "mechanisms" that will enhance the protection of Filipino
domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino
domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either for
Hongkong and other countries and all other classes of Filipino workers for other countries.
Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against
excessive collections of placement and documentation fees, travel fees and other charges committed by
private employment agencies recruiting and deploying domestic helpers to Hongkong. [They are
reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment
and deployment business, as it is conducted today, is affected with public interest.
xxx xxx xxx
The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is
merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the
tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by
private employment agencies are hereby "temporarily suspendedeffective July 1, 1991."
The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to
Hongkong only.
xxx xxx xxx
. . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong
resulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulous
practice of private employment agencies victimizing applicants for employment as domestic helpers for
Hongkong and not the whole recruitment business in the Philippines. (pp. 62-65,Rollo.)
The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of
Government.
Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing in the Office of the
National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and
4, Chapter 2, Book VII of the Administrative Code of 1987 which provide:
Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the
Official Gazatte, unless it is otherwise provided. . . . (Civil Code.)
Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with
the administration and enforcement of this Code or any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules and regulations shall become effective fifteen (15)
days after announcement of their adoption in newspapers of general circulation. (Emphasis supplied, Labor
Code, as amended.)
Sec. 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3)
certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are
not filed within three (3) months shall not thereafter be the basis of any sanction against any party or
persons. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.)
Sec. 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent with
this Book, each rule shall become effective fifteen (15) days from the date of filing as above
provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to
public health, safety and welfare, the existence of which must be expressed in a statement accompanying
the rule. The agency shall take appropriate measures to make emergency rules known to persons who may
be affected by them. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987).
Once, more we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that:
. . . Administrative rules and regulations must also be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation. (p. 447.)
Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be published. Neither is publication required of the so-
called letters of instructions issued by administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties. (p. 448.)
We agree that publication must be in full or it is no publication at all since its purpose is to inform the public
of the content of the laws. (p. 448.)
For lack of proper publication, the administrative circulars in question may not be enforced and implemented.
WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991,
and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED
pending compliance with the statutory requirements of publication and filing under the aforementioned laws of the land.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 108358 January 20, 1995
COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
THE HON. COURT OF APPEALS, R.O.H. AUTO PRODUCTS PHILIPPINES, INC. and THE HON. COURT OF TAX
APPEALS, respondents.
VITUG, J.:
On 22 August 1986, during the period when the President of the Republic still wielded legislative powers, Executive Order
No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later amended to include estate and
donor's taxes and taxes on business, for the taxable years 1981 to 1985.
Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and November
1986, its Tax Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 34-F-00146-64-B,
respectively, and paid the corresponding amnesty taxes due.
Prior to this availment, petitioner Commissioner of Internal Revenue, in a communication received by private respondent on
13 August 1986, assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981
and 30 September 1982 in an aggregate amount of P1,410,157.71. The taxpayer wrote back to state that since it had been
able to avail itself of the tax amnesty, the deficiency tax notice should forthwith be cancelled and withdrawn. The request
was denied by the Commissioner, in his letter of 22 November 1988, on the ground that Revenue Memorandum Order No.
4-87, dated 09 February 1987, implementing Executive Order No. 41, had construed the amnesty coverage to include only
assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986
and not to assessments theretofore made. The invoked provisions of the memorandum order read:
TO: All Internal Revenue Officers and Others Concerned:
1.0. To give effect and substance to the immunity provisions of the tax amnesty under Executive Order No.
41, as expanded by Executive Order No. 64, the following instructions are hereby issued:
xxx xxx xxx
1.02. A certification by the Tax Amnesty Implementation Officer of the fact of availment of the said tax
amnesty shall be a sufficient basis for:
xxx xxx xxx
1.02.3. In appropriate cases, the cancellation/withdrawal of assessment notices and letters of demand
issued after August 21, 1986 for the collection of income, business, estate or donor's taxes due during the
same taxable years. 1 (Emphasis supplied)
Private respondent appealed the Commissioner's denial to the Court of Tax Appeals. Ruling for the taxpayer, the tax court
said:
Respondent (herein petitioner Commissioner) failed to present any case or law which proves that an
assessment can withstand or negate the force and effects of a tax amnesty. This burden of proof on the
petitioner (herein respondent taxpayer) was created by the clear and express terms of the executive order's
intention qualified availers of the amnesty may pay an amnesty tax in lieu of said unpaid taxes which are
forgiven (Section 2, Section 5, Executive Order No. 41, as amended). More specifically, the plain provisions
in the statute granting tax amnesty for unpaid taxes for the period January 1, 1981 to December 31, 1985
shifted the burden of proof on respondent to show how the issuance of an assessment before the date of
the promulgation of the executive order could have a reasonable relation with the objective periods of the
amnesty, so as to make petitioner still answerable for a tax liability which, through the statute, should have
been erased with the proper availment of the amnesty.
Additionally, the exceptions enumerated in Section 4 of Executive Order No. 41, as amended, do not
indicate any reference to an assessment or pending investigation aside from one arising from information
furnished by an informer. . . . Thus, we deem that the rule in Revenue Memorandum Order No. 4-87
promulgating that only assessments issued after August 21, 1986 shall be abated by the amnesty is
beyond the contemplation of Executive Order No. 41, as amended. 2
On appeal by the Commissioner to the Court of Appeals, the decision of the tax court was affirmed. The appellate court
further observed:
In the instant case, examining carefully the words used in Executive Order No. 41, as amended, we find
nothing which justifies petitioner Commissioner's ground for denying respondent taxpayer's claim to the
benefits of the amnesty law. Section 4 of the subject law enumerates, in no uncertain terms, taxpayers who
may not avail of the amnesty granted,. . . .
Admittedly, respondent taxpayer does not fall under any of the . . . exceptions. The added exception urged
by petitioner Commissioner based on Revenue Memorandum Order No. 4-87, further restricting the scope
of the amnesty clearly amounts to an act of administrative legislation quite contrary to the mandate of the
law which the regulation ought to implement.
xxx xxx xxx
Lastly, by its very nature, a tax amnesty, being a general pardon or intentional overlooking by the State of
its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law,
partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise
would be due it, and in this sense, prejudicial thereto, particularly to give tax evaders, who wish to relent
and are willing to reform a chance to do so and thereby become a part of the new society with a clean
slate. (Republic vs. Intermediate Appellate Court. 196 SCRA 335, 340 [1991] citing Commissioner of
Internal Revenue vs. Botelho Shipping Corp., 20 SCRA 487) To follow [the restrictive application of
Revenue Memorandum Order No. 4-87 pressed by petitioner Commissioner would be to work against
the raison d'etre of E.O. 41, as amended, i.e., to raise government revenues by encouraging taxpayers to
declare their untaxed income and pay the tax due thereon. (E.O. 41, first paragraph)] 3
In this petition for review, the Commissioner raises these related issues:
1. WHETHER OR NOT REVENUE MEMORANDUM ORDER NO. 4-87, PROMULGATED TO IMPLEMENT E.O.
NO. 41, IS VALID;
2. WHETHER OR NOT SAID DEFICIENCY ASSESSMENTS IN QUESTION WERE EXTINGUISHED BY REASON

OR PRIVATE RESPONDENT'S AVAILMENT OF EXECUTIVE ORDER NO. 41 AS AMENDED BY EXECUTIVE
ORDER NO. 64;
3. WHETHER OR NOT PRIVATE RESPONDENT HAS OVERCOME THE PRESUMPTION OF VALIDITY OF

ASSESSMENTS. 4
The authority of the Minister of Finance (now the Secretary of Finance), in conjunction with the Commissioner of Internal
Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be
controverted. Neither can it be disputed that such rules and regulations, as well as administrative opinions and rulings,
ordinarily should deserve weight and respect by the courts. Much more fundamental than either of the above, however, is
that all such issuances must not override, but must remain consistent and in harmony with, the law they seek to apply and
implement. Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law.
The real and only issue is whether or not the position taken by the Commissioner coincides with the meaning and intent of
executive Order No. 41.
We agree with both the court of Appeals and court of Tax Appeals that Executive Order No. 41 is quite explicit and requires
hardly anything beyond a simple application of its provisions. It reads:
Sec. 1. Scope of Amnesty. A one-time tax amnesty covering unpaid income taxes for the years 1981 to
1985 is hereby declared.
Sec. 2. Conditions of the Amnesty. A taxpayer who wishes to avail himself of the tax amnesty shall, on
or before October 31, 1986;
a) file a sworn statement declaring his net worth as of December 31, 1985;
b) file a certified true copy of his statement declaring his net worth as of December 31,
1980 on record with the Bureau of Internal Revenue, or if no such record exists, file a
statement of said net worth therewith, subject to verification by the Bureau of Internal
Revenue;
c) file a return and pay a tax equivalent to ten per cent (10%) of the increase in net worth
from December 31, 1980 to December 31, 1985: Provided, That in no case shall the tax be
less than P5,000.00 for individuals and P10,000.00 for judicial persons.
Sec. 3. Computation of Net Worth. In computing the net worths referred to in Section 2 hereof, the
following rules shall govern:
a) Non-cash assets shall be valued at acquisition cost.
b) Foreign currencies shall be valued at the rates of exchange prevailing as of the date of
the net worth statement.
Sec. 4. Exceptions. The following taxpayers may not avail themselves of the amnesty herein granted:
a) Those falling under the provisions of Executive Order Nos. 1, 2 and 14;
b) Those with income tax cases already filed in Court as of the effectivity hereof;
c) Those with criminal cases involving violations of the income tax already filed in court as
of the effectivity filed in court as of the effectivity hereof;
d) Those that have withholding tax liabilities under the National Internal Revenue Code, as
amended, insofar as the said liabilities are concerned;
e) Those with tax cases pending investigation by the Bureau of Internal Revenue as of the
effectivity hereof as a result of information furnished under Section 316 of the National
Internal Revenue Code, as amended;
f) Those with pending cases involving unexplained or unlawfully acquired wealth before the
Sandiganbayan;
g) Those liable under Title Seven, Chapter Three (Frauds, Illegal Exactions and
Transactions) and Chapter Four (Malversation of Public Funds and Property) of the
Revised Penal Code, as amended.
xxx xxx xxx
Sec. 9. The Minister of finance, upon the recommendation of the Commissioner of Internal Revenue, shall
promulgate the necessary rules and regulations to implement this Executive Order.
xxx xxx xxx
Sec. 11. This Executive Order shall take effect immediately.
DONE in the City of Manila, this 22nd day of August in the year of Our Lord, nineteen hundred and eighty-
six.
The period of the amnesty was later extended to 05 December 1986 from 31 October 1986 by Executive Order No. 54,
dated 04 November 1986, and, its coverage expanded, under Executive Order No. 64, dated 17 November 1986, to include
estate and honors taxes and taxes on business.
If, as the Commissioner argues, Executive Order No. 41 had not been intended to include 1981-1985 tax liabilities already
assessed (administratively) prior to 22 August 1986, the law could have simply so provided in its exclusionary clauses. It did
not. The conclusion is unavoidable, and it is that the executive order has been designed to be in the nature of a general
grant of tax amnesty subject only to the cases specifically excepted by it.
It might not be amiss to recall that the taxable periods covered by the amnesty include the years immediately preceding the
1986 revolution during which time there had been persistent calls, all too vivid to be easily forgotten, for civil disobedience,
most particularly in the payment of taxes, to the martial law regime. It should be understandable then that those who
ultimately took over the reigns of government following the successful revolution would promptly provide for abroad, and not
a confined, tax amnesty.
Relative to the two other issued raised by the Commissioner, we need only quote from Executive Order No. 41 itself; thus:
Sec. 6. Immunities and Privileges. Upon full compliance with the conditions of the tax amnesty and the
rules and regulations issued pursuant to this Executive order, the taxpayer shall enjoy the following
immunities and privileges:
a) The taxpayer shall be relieved of any income tax liability on any untaxed income from
January 1, 1981 to December 31, 1985, including increments thereto and penalties on
account of the non-payment of the said tax. Civil, criminal or administrative liability arising
from the non-payment of the said tax, which are actionable under the National Internal
Revenue Code, as amended, are likewise deemed extinguished.
b) The taxpayer's tax amnesty declaration shall not be admissible in evidence in all
proceedings before judicial, quasi-judicial or administrative bodies, in which he is a
defendant or respondent, and the same shall not be examined, inquired or looked into by
any person, government official, bureau or office.
c) The books of account and other records of the taxpayer for the period from January 1,
1981 to December 31, 1985 shall not be examined for income tax purposes:Provided, That
the Commissioner of Internal Revenue may authorize in writing the examination of the said
books of accounts and other records to verify the validity or correctness of a claim for grant
of any tax refund, tax credit (other than refund on credit of withheld taxes on wages), tax
incentives, and/or exemptions under existing laws.
There is no pretension that the tax amnesty returns and due payments made by the taxpayer did not conform with the
conditions expressed in the amnesty order.
WHEREFORE, the decision of the court of Appeals, sustaining that of the court of Tax Appeals, is hereby AFFIRMED in
toto. No costs.
SO ORDERED.
EN BANC
[G.R. No. 100481. January 22, 1997]
PHILIPPINE INTERISLAND SHIPPING ASSOCIATION OF THE PHILIPPINES, CONFERENCE OF INTERISLAND SHIP-

OWNERS AND OPERATORS, UNITED PETROLEUM TANKER OPERATORS ASSOCIATION OF THE
PHILIPPINES, LIGHTERAGE ASSOCIATION OF THE PHILIPPINES and PILOTAGE INTEGRATED SERVICES
CORPORATION, petitioners, vs. COURT OF APPEALS, UNITED HARBOR PILOTS' ASSOCIATION OF THE
PHILIPPINES, INC. and MANILA PILOTS' ASSOCIATION, respondents.
[G.R. Nos. 103716-17. January 22, 1997]
HON. PETE NICOMEDES PRADO, in his capacity as Secretary of Transportation and Communications and the
PHILIPPINE PORTS AUTHORITY, petitioners, vs. COURT OF APPEALS, UNITED HARBOR PILOTS'
ASSOCIATION OF THE PHILIPPINES, INC., respondents.
[G.R. No. 107720. January 22, 1997]
HON. JESUS B. GARCIA, JR., in his capacity as Secretary of Transportation and Communications and Chairman of
the PHILIPPINE PORTS AUTHORITY, COMMODORE ROGELIO A. DAYAN, in his capacity as General
Manager of the Philippine Ports Authority, and SIMEON T. SILVA, JR., in his capacity as the South Harbor
Manager, Philippine Ports Authority, petitioners, vs. HON. NAPOLEON R. FLOJO, in his capacity as the
Presiding Judge of Branch 2, Regional Trial Court - Manila, UNITED HARBOR PILOTS' ASSOCIATION OF
THE PHILIPPINES and the MANILA PILOTS' ASSOCIATION, respondents.
DECISION
MENDOZA, J.:
Private respondent United Harbor Pilots' Association of the Philippines, Inc. (UHPAP) is the umbrella organization of
various groups rendering pilotage service in different ports of the Philippines. The service consists of navigating a vessel
from a specific point, usually about two (2) miles off shore, to an assigned area at the pier and vice versa. When a vessel
arrives, a harbor pilot takes over the ship from its captain to maneuver it to a berth in the port, and when it departs, the
harbor pilot also maneuvers it up to a specific point off shore. The setup is required by the fact that each port has peculiar
topography with which a harbor pilot is presumed to be more familiar than a ship captain.
The Philippine Ports Authority (PPA) is the government agency which regulates pilotage. Pursuant to Presidential
Decree No. 857, it has the power "to supervise, control, regulate . . . such services as are necessary in the ports vested in,
or belonging to the Authority"[1] and to "control, regulate and supervise pilotage and the conduct of pilots in any Port
District."[2] It also has the power "to impose, fix, prescribe, increase or decrease such rates, charges or fees. . . for the
services rendered by the Authority or by any private organization within a Port District. [3]
These cases arose out of the efforts of harbor pilots to secure enforcement of Executive Order No. 1088, which fixes
the rates of pilotage service, and the equally determined efforts of the PPA and its officials, the herein petitioners, to block
enforcement of the executive order, even as they promulgated their own orders which in the beginning fixed lower rates of
pilotage and later left the matter to self determination by parties to a pilotage contract.
I. THE FACTS
G.R. No. 103716
On February 3, 1986, shortly before the presidential elections, President Ferdinand E. Marcos, responding to the
clamor of harbor pilots for an increase in pilotage rates, issued Executive Order No. 1088, PROVIDING FOR UNIFORM
AND MODIFIED RATES FOR PILOTAGE SERVICES RENDERED TO FOREIGN AND COASTWISE VESSELS IN ALL
PRIVATE AND PUBLIC PORTS. The executive order increased substantially the rates of the existing pilotage fees
previously fixed by the PPA.
However, the PPA refused to enforce the executive order on the ground that it had been drawn hastily and without
prior consultation; that its enforcement would create disorder in the ports as the operators and owners of the maritime
vessels had expressed opposition to its implementation; and that the increase in pilotage, as mandated by it, was exorbitant
and detrimental to port operations.[4]
The UHPAP then announced its intention to implement E.O. No. 1088 effective November 16, 1986. This in turn drew
a warning from the PPA that disciplinary sanctions would be applied to those who would charge rates under E.O. No. 1088.
The PPA instead issued Memorandum Circular No. 43-86, fixing pilotage fees at rates lower than those provided in E.O. No.
1088.
Consequently, the UHPAP filed on January 7, 1987 a complaint for injunction with the Regional Trial Court of Manila,
against the then Minister of Transportation and Communications, Hernando Perez, and PPA General Manager, Primitivo S.
Solis, Jr. It sought a writ of preliminary mandatory injunction for the immediate implementation of E.O. No. 1088, as well as
a temporary restraining order to stop PPA officials from imposing disciplinary sanctions against UHPAP members charging
rates in accordance with E.O. No. 1088.
The case, docketed as Civil Case No. 87-38913, was raffled to Branch 28 of the Regional Trial Court of Manila which
issued a temporary restraining order, enjoining the PPA from threatening the UHPAP, its officers and its members with
suspension and other disciplinary action for collecting pilotage fees pursuant to E.O. No. 1088.
On March 16, 1987, the Chamber of Maritime Industries of the Philippines, William Lines, Inc., Loadstar Shipping Co.,
Inc. and Delsen Transport Lines, Inc., after obtaining leave, filed a joint answer in intervention.
On February 26, 1988, while the case was pending, the PPA issued Administrative Order No. 02-88, entitled
IMPLEMENTING GUIDELINES ON OPEN PILOTAGE SERVICE. The PPA announced in its order that it was leaving to the
contracting parties, i.e., the shipping lines and the pilots, the fixing of mutually acceptable rates for pilotage services, thus
abandoning the rates fixed by it (PPA) under Memorandum Circular No. 43-86, as well as those provided in E.O. No. 1088.
The administrative order provided:
Section 3. Terms/Conditions on Pilotage Service. The shipping line or vessel's agent/representative and the harbor pilot/firm
chosen by the former shall agree between themselves, among others, on what 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.
The PPA then moved to dismiss the case, contending that the issuance of its order had rendered the case moot and
academic and that consequently E.O. No. 1088 had ceased to be effective. The UHPAP opposed the motion. Together with
the Manila Pilots' Association (MPA), it filed on May 25, 1988 a petition for certiorari and prohibition in the RTC-Manila,
questioning the validity of A.O. No. 02-88. This petition was docketed as Civil Case No. 88-44726 (United Harbor Pilots'
Association and Manila Pilots' Association v. Hon. Rainerio Reyes, as Acting Secretary of the Department of Transportation
and Communications and Chairman of the Philippine Ports Authority (PPA) and Maximo Dumlao, Jr., as General Manager
of the Philippine Ports Authority (PPA), et al.) and raffled to Branch 2 of RTC-Manila. The factual antecedents of this case
are discussed in G.R. No. 100481 below.
Meanwhile, in Civil Case 87-38913, the court, without resolving the motion to dismiss filed by the PPA, rendered a
decision[5] holding that A.O. No. 02-88 did not render the case moot and academic and that the PPA was under obligation to
comply with E.O. No. 1088 because the order had the force of law which the PPA could not repeal.
The then Transportation Minister Hernando Perez and the PPA filed a petition for review. The petition was filed in this
Court which later referred the case to the Court of Appeals where it was docketed as CA G.R. SP. No. 18072. On the other
hand the intervenors appealed to the Court of Appeals where this case was docketed as CA G.R. No. 21590. The two cases
were then consolidated.
In a decision rendered on October 4, 1991, the Twelfth Division[6] of the Court of Appeals affirmed the decision of the
trial court, by dismissing CA G.R. No. 21590 and denying CA G.R. SP. No. 18072. Hence, this petition by the Secretary of
Transportation and Communications and the PPA. The intervenor shipping lines did not appeal.
G.R. No. 100481
Meanwhile, in a petition for certiorari filed before RTC-Manila, Branch 2 (Civil Case No. 88-44726), the UHPAP and the
MPA sought the annulment of A.O. No. 02-88, which in pertinent parts provided:
Section 1. Statement of Policy. It is hereby declared that the provision of pilotage in ports/harbors/areas defined as
compulsory in Section 8 of PPA Administrative Order No. 03-85, entitled, "Rules and Regulations Governing Pilotage
Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports" shall be open to all licensed harbor pilots/pilotage
firms/associations appointed/accredited by this authority to perform pilotage service.
Section 2. Persons Authorized to Render Pilotage. The following individuals, persons or groups shall be
appointed/accredited by this Authority to provide pilotage service:
a. Harbor Pilots of the present Pilotage Associations of the different pilotage districts in the Philippines. Their
probationary training as required under Section 31 of PPA AO No. 03-85 shall be undertaken by any member of
said Association.
b. Members/employees of any partnership/corporation or association, including Filipino shipmasters/ captains of vessel

(domestic/foreign) of Philippine Registry and individuals who meet the minimum qualifications and comply with the
requirements prescribed in Sec. 29 of PPA AO No. 03-85, aforestated, and who are appointed by said firm or
association and accredited as harbor pilots by this authority. New Harbor Pilots who wish to be
appointed/accredited by PPA under the open pilotage system either as an individual pilot or as a member of any
Harbor Pilot partnership/association shall be required to undergo a practical examination, in addition to the written
examination given by the Philippine Coast Guard, prior to their appointment/ accreditation by this Authority.
The UHPAP and MPA, as petitioners below, contended (1) that A.O. No. 02-88 was issued without the benefit of a
public hearing; (2) that E.O. No. 1088 had not been repealed by any other Executive Order or Presidential Decree and,
therefore, should be given effect; and (3) that A.O. No. 02-88 contravened P.D. No. 857.
On August 21, 1989, the Philippine Interisland Shipping Association, Conference of Interisland Shipowners and
Operators, United Petroleum Tanker Operators of the Philippines, Lighterage Association of the Philippines, and Pilotage
Integrated Services Corp., were allowed to intervene.
On September 8, 1989, a writ of preliminary injunction was issued by the court, enjoining the PPA from implementing
A.O. No. 02-88 and, on October 26, 1989, judgment was rendered in favor of the petitioners therein. The dispositive portion
of the court's decision[7] reads:
WHEREFORE, for all of the foregoing, the petition is hereby granted.
1. Respondents are hereby declared to have acted in excess of jurisdiction and with grave abuse of discretion amounting to
lack of jurisdiction in approving Resolution No. 860 and in enacting Philippine Ports Authority Administrative Order No. 02-
88, the subject of which is "Implementing Guidelines on Open Pilotage Service";
2. Philippine Ports Authority Administrative Order No. 02-88 is declared null and void;
3. The preliminary injunction issued on September 8, 1989 is made permanent; and
4. Without costs.
SO ORDERED.
Respondents and the intervenors below filed a joint petition for certiorari in the Court of Appeals (CA G.R. SP No.
19570), assailing the decision of the trial court. But their petition was dismissed for lack of jurisdiction on the ground that the
issue raised was purely legal.
The parties separately filed petitions for review before this Court. The first one, by the PPA and its officers, was
docketed as G.R. No. 100109 (Hon. Pete Nicomedes Prado, Philippine Ports Authority and Commodore Rogelio
Dayan v. United Harbor Pilots' Association of the Philippines and Manila Pilots' Association), while the second one, by the
intervenors, was docketed as G.R. No. 100481 (Philippine Interisland Shipping Association of the Philippines, Conference of
Interisland Ship Owners and Operators, United Petroleum Tanker Operators Association of the Philippines, Inc. v. The
Court of Appeals, United Harbor Pilots' Association of the Philippines and Manila Pilots' Association.)
The petition filed by the government in G.R. No. 100109 was dismissed for failure of petitioners to show that the Court
of Appeals committed a reversible error.[8] On the other hand, the petition of the intervenors in G.R. No. 100481 was given
due course.
G.R. No. 107720
Following the denial of its petition in G.R. No. 100109, the PPA issued on July 31, 1992, Administrative Order No. 05-
92, placing harbor pilots under the control of the PPA with respect to the scheduling and assignment of service of vessels.
The PPA cited as justification "pilotage delays . . . under the set-up where private respondents (UHPAP & MPA) assign the
pilots. Intentionally or otherwise, several vessels do not receive the pilotage service promptly, causing them operational
disruptions and additional expenses/costs." [9]
Private respondents UHPAP and MPA viewed the matter differently. On October 28, 1992, they asked the RTC-Manila,
Branch 2 which heard and decided Civil Case No. 88-44726 to cite PPA officials in contempt of court. On the same day, the
trial court issued an order restraining the herein petitioners from implementing Administrative Order No. 05-92. However, the
PPA proceeded to implement its order, prompting the UHPAP and MPA to move again to cite petitioners in contempt, even
as they questioned the validity of A.O. No. 05-92. Accordingly the trial court issued another order on November 4, 1992,
reiterating its previous order of October 28, 1992 to petitioners to refrain from implementing A.O. No. 05-92 pending
resolution of the petitions.
Making a special appearance, petitioners questioned the jurisdiction of the court and moved for the dismissal of the
petitions for contempt. Allegedly to prevent the disruption of pilotage services, petitioners created a special team of reserve
pilots to take over the pilotage service in the event members of UHPAP/MPA refused to render pilotage services.
For the third time respondents moved to cite petitioners in contempt of court. Again petitioners questioned the court's
jurisdiction and manifested that they were adopting their previous motion to dismiss petitions for contempt filed against
them.
On November 17, 1992, the trial court denied the petitioners' motion and set the contempt petitions for hearing on
November 19, 1992. Hence, this petition, which was docketed as G.R. No. 107720 (Hon. Jesus B. Garcia, Jr. in his capacity
as Secretary of Transportation and Communications and Chairman of the Philippine Ports Authority, Commodore Rogelio A.
Dayan, in his capacity as General Manager of the Philippine Ports Authority and Simeon T. Silva, Jr., in his capacity as the
South Harbor Manager, Philippine Ports Authority v. Hon. Napoleon Flojo, in his capacity as the Presiding Judge of Branch
2, RTC, Manila, UHPAP and MPA).
Pending resolution of this case, the Court ordered the parties to maintain the status quo as of October 31, 1992.
II. THE ISSUES AND THEIR DISPOSITION
The issues raised are:
I. WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE CHALLENGED

DECISION OF RTC-MANILA, BRANCH 41, WHICH RULED THAT:
(A) CIVIL CASE NO. 87-38913 HAS NOT BECOME MOOT AND ACADEMIC WITH THE ISSUANCE OF
ADMINISTRATIVE ORDER NO. 02-88; AND
(B) HEREIN PETITIONERS ARE BOUND TO COMPLY WITH E.O. NO. 1088;
II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN DISMISSING CA G.R.
SP. NO. 19570 FOR LACK OF JURISDICTION?
III. WHETHER OR NOT RESPONDENT JUDGE NAPOLEON FLOJO COMMITTED GRAVE ABUSE OF
DISCRETION IN ASSUMING JURISDICTION OVER THE PETITIONS FOR CONTEMPT FILED BY PRIVATE
RESPONDENTS AS A RESULT OF THE ISSUANCE OF A.O. NO. 05-92?
These issues will be discussed in seriatim.
A. Whether Executive Order No. 1088 is Valid and

Petitioners are Bound to Obey it
(G.R. Nos. 103716-17)
Executive Order No. 1088 reads:
EXECUTIVE ORDER No. 1088
PROVIDING FOR UNIFORM AND MODIFIED RATES FOR PILOTAGE SERVICES RENDERED TO FOREIGN AND
COASTWISE VESSELS IN ALL PRIVATE OR PUBLIC PHILIPPINE PORTS.
WHEREAS, the United Harbor Pilots' Association of the Philippines has clamored for the rationalization of pilotage service
charges, through the imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports,
whether public or private;
WHEREAS, the plea of the Association has been echoed by a great number of Members of Parliament and other persons
and groups;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the
Constitution and by law, do hereby direct and order:
Section 1. The following shall be the rate of pilotage fees or charges based on tonnage for services rendered to both foreign
and coastwise vessels;
For Foreign Vessels Rate in US $ or

its Peso
Equivalent
Less than 500GT $ 30.00

500GT to 2,500GT 43.33
2,500GT to 5,000GT 71.33
5,000GT to 10,000GT 133.67
10,000GT to 15,000GT 181.67
15,000GT to 20,000GT 247.00
20,000GT to 30,000GT 300.00
30,000GT to 40,000GT 416.67
40,000GT to 60,000GT 483.33
60,000GT to 80,000GT 550.00
80,000GT to 100,000GT 616.67
100,000GT to 120,000GT 666.67
120,000GT to 130,000GT 716.67
130,000GT to 140,000GT 766.67
Over 140,000 gross tonnage $0.05 or its peso equivalent every excess tonnage. Rate for docking and undocking
anchorage, conduction and shifting other related special services is equal to 100%. Pilotage services shall be compulsory in
government and private wharves or piers,
For Coastwise Vessels: Regular
100 and under 500 gross tons P 41.70

500 and under 600 gross tons 55.60
600 and under 1,000 gross tons 69.60
1,000 and under 3,000 gross tons 139.20
3,000 and under 5,000 gross tons 300.00
5,000 and over gross tons
SEC. 2. With respect to foreign vessels, payment of pilotage services shall be made in dollars or in pesos at the prevailing
exchange rate.
SEC. 3. All orders, letters of instruction, rules, regulations and other issuances inconsistent with this Executive Order are
hereby repealed or amended accordingly.
SEC. 4. This Executive Order shall take effect immediately.
Done in the City of Manila, this 3rd day of February, in the year of our Lord, nineteen hundred and eighty-six.
(Sgd.) FERDINAND E. MARCOS

President of the Philippines
By the President:
(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant
Petitioners contend that E.O. No. 1088 was merely an administrative issuance of then President Ferdinand E. Marcos
and, as such, it could be superseded by an order of the PPA. They argue that to consider E.O. No. 1088 a statute would be
to deprive the PPA of its power under its charter to fix pilotage rates.
The contention has no merit. The fixing of rates is essentially a legislative power. [10] Indeed, the great battle over the
validity of the exercise of this power by administrative agencies was fought in the 1920s on the issue of undue delegation
precisely because the power delegated was legislative. The growing complexity of modern society, the multiplication of the
subjects of governmental regulations and the increased difficulty of administering the laws made the creation of
administrative agencies and the delegation to them of legislative power necessary.[11]
There is no basis for petitioners' argument that rate fixing is merely an exercise of administrative power; that if
President Marcos had power to revise the rates previously fixed by the PPA through the issuance of E.O. No. 1088, the
PPA could in turn revise those fixed by the President, as the PPA actually did in A.O. No. 43-86, which fixed lower rates of
pilotage fees, and even entirely left the fees to 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 subordinate legislation, promulgated by it in the exercise of delegated
power. As such these could only be amended or revised by law, as the President did by E.O. No. 1088.
It is not an answer to say that E.O. No. 1088 should not be considered a statute because that would imply the
withdrawal of power from the PPA. What determines whether an act is a law or an administrative issuance is not its form but
its nature. Here, as we have already said, the power to fix the rates of charges for services, including pilotage service, has
always been regarded as legislative in character.
Nor is there any doubt of the power of the then President to fix rates. On February 3, 1986, when he issued E.O. No.
1088, President Marcos was authorized under Amendment No. 6 of the 1973 Constitution to exercise legislative power, just
as he was under the original 1973 Constitution, when he issued P.D. NO. 857 which created the PPA, endowing it with the
power to regulate pilotage service in Philippine ports. Although the power to fix rates for pilotage had been delegated to the
PPA, it became necessary to rationalize the rates of charges fixed by it through the imposition of uniform rates. That is what
the President did in promulgating E.O. No. 1088. As the President could delegate the ratemaking power to the PPA, so
could he exercise it in specific instances without thereby withdrawing the power vested by P.D. No. 857, Section 20(a) in the
PPA "to impose, fix, prescribe, increase or decrease such rates, charges or fees... for the services rendered by the Authority
or by any private organization within a Port District."
It is worthy to note that E.O. No. 1088 provides for adjusted pilotage service rates without withdrawing the power of the
PPA to impose, prescribe, increase or decrease rates, charges or fees. The reason is because E.O. NO. 1088 is not meant
simply to fix new pilotage rates. Its legislative purpose is the "rationalization of pilotage service charges, through the
imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports."
The case presented is similar to the fixing of wages under the Wage Rationalization Act (R.A. No. 6727) whereby
minimum wages are determined by Congress and provided by law, subject to revision by Wage Boards should later
conditions warrant their revision. It cannot be denied that Congress may intervene anytime despite the existence of
administrative agencies entrusted with wage-fixing powers, by virtue of the former's plenary power of legislation. When
Congress does so, the result is not the withdrawal of the powers delegated to the Wage Boards but cooperative lawmaking
in an area where initiative and expertise are required. The Court of Appeals is correct in holding that
The power of the PPA to fix pilotage rates and its authority to regulate pilotage still remain notwithstanding the fact that a
schedule for pilotage fees has already been prescribed by the questioned executive order. PPA is at liberty to fix new rates
of pilotage subject only to the limitation that such new rates should not go below the rates fixed under E.O. 1088. The
rationale behind the limitation is no different from what has been previously stated. Being a mere administrative agency,
PPA cannot validly issue orders or regulations that would have the effect of rendering nugatory the provisions of the
legislative issuance such as those of the executive order in question.(emphasis supplied)
Petitioners refused to implement E.O. No. 1088 on the ground that it was issued without notice to the PPA and that it
was nothing but a "political gimmick" resorted to by then President Marcos. This perception obviously stemmed from the fact
that E.O. No. 1088 was issued shortly before the presidential elections in 1986.
But lack of notice to the PPA is not proof that the necessary factual basis for the order was wanting. To the contrary,
the presumption is that the President had before him pertinent data on which he based the rates prescribed in his order. Nor
is the fact that the order might have been issued to curry favor with the voters a reason for the PPA to refuse to enforce the
order in question. It is not unusual for lawmakers to have in mind partisan political consideration in sponsoring legislation.
Yet that is not a ground for invalidating a statute.
Moreover, an inquiry into legislative motivation is not proper since the only relevant question is whether in issuing it the
President violated constitutional and statutory restrictions on his power. The PPA did not have any objection to the order
based on constitutional ground. In fact the nearest to a challenge on constitutional grounds was that mounted not by the
PPA but by the intervenors below which claimed that the rates fixed in E.O. NO. 1088 were exorbitant and unreasonable.
However, both the trial court and the Court of Appeals overruled the objections and the intervenors apparently accepted the
ruling because they did not appeal further to this Court.
There is, therefore, no legal basis for PPA's intransigence, after failing to get the new administration of President
Aquino to revoke the order by issuing it own order in the form of A.O. NO. 02-88. It is noteworthy that if President Marcos
had legislative power under Amendment No. 6 of the 1973 Constitution [12] so did President Aquino under the Provisional
(Freedom) Constitution[13] who could, had she thought E.O. No. 1088 to be a mere "political gimmick," have just as easily
revoked her predecessor's order. It is tempting to ask if the administrative agency would have shown the same act of
defiance of the President's order had there been no change of administration. What this Court said in La Perla Cigar and
Cigarette Factory v. Capapas," [14] mutatis mutandis may be applied to the cases at bar:
Was it within the powers of the then Collector Ang-angco to refuse to collect the duties that must be paid? That is the crucial
point of inquiry. We hold that it was not.
Precisely, he had to give the above legal provisions, quite explicit in character, force and effect. His obligation was to collect
the revenue for the government in accordance with existing legal provisions, executive agreements and executive orders
certainly not excluded. He would not be living up to his official designation if he were permitted to act otherwise. He was not
named Collector of Customs for nothing. . . .
Certainly, if the President himself were called upon to execute the laws faithfully, a Collector of Customs, himself a
subordinate executive official, cannot be considered as exempt in any wise from such an obligation of fealty. Similarly, if the
President cannot suspend the operation of any law, it would be presumptuous in the extreme for one in the position of then
Collector Ang-angco to consider himself as possessed of such a prerogative. . . .
We conclude that E.O. No. 1088 is a valid statute and that the PPA is duty bound to comply with its provisions. The
PPA may increase the rates but it may not decrease them below those mandated by E.O. No. 1088. Finally, the PPA cannot
refuse to implement E.O. No. 1088 or alter it as it did in promulgating Memorandum Circular No. 43-86. Much less could the
PPA abrogate the rates fixed and leave the fixing of rates for pilotage service to the contracting parties as it did through A.
O. No. 02-88, Section 3. Theretofore the policy was one of governmental regulation of the pilotage business. By leaving the
matter to the determination of the parties, the PPA jettisoned this policy and changed it to laissez-faire, something which
only the legislature, or whoever is vested with lawmaking authority, could do.
B. Whether the Court of Appeals had Jurisdiction over the

Appeal of Intervenors from the Decision of the
Trial Court Invalidating Administrative Order
No. 02-88 of the PPA
(G.R. No. 100481)
The Court of Appeals dismissed the joint appeal of the government and the intervenors from the trial court's decision in
Civil Case No. 88-44726 on the ground that the issues raised were purely legal questions. [15] The appellate court stated:
After a painstaking review of the records We resolved to dismiss the petition for lack of jurisdiction.
From the facts, it is clear that the main issue proffered by the appellant is whether or not the respondent Philippine Ports
Authority could validly issue rules and regulations adopting the "open pilotage policy" pursuant to its charter (P.D. 857).
....
It must be noted that while the court a quo had clearly recognized the intricate legal issue involved, it nevertheless decided it
on the merits which apparently resolved only the procedural aspect that justified it in declaring the questioned order as null
and void. While We recognize the basic requirements of due process, the same cannot take precedence in the case at bar
in lieu of the fact that the resolution of the present case is purely a legal question.
Moreover, it appears that appellants in the court below had filed a manifestation and motion waiving their presentation of
evidence. Instead, they opted to submit a comprehensive memorandum of the case on the ground that the pivotal issue
raised in the petition below is purely legal in character. (p. 231, Records)
At this juncture, We are at a loss why appellants had elevated the present action before Us where at the outset they already
noted that the issue is purely legal.
If in the case of Murillo v. Consul (UDK-9748, Resolution en banc, March 1, 1990) the Supreme Court laid down the rule
that "if an appeal by notice of appeal is taken from the Regional Trial Court to the Court of Appeals, and in the latter Court,
the appellant raised naught but issues of law, the appeal should be dismissed for lack of jurisdiction (page 5, Resolution in
Murillo)," then with more reason where as in the case at bar public-appellants thru the Office of the Solicitor General in their
memorandum manifested that the controversy has reference to the pure legal question of the validity of the questioned
administrative order. Consequently, We have no other recourse but to dismiss the petition on the strength of these
pronouncements.
As already stated, from this decision, both the government and the intervenors separately brought petitions for review
to this Court. In G.R. No. 100109, the government's petition was dismissed for lack of showing that the appellate court
committed reversible error. The dismissal of the government's petition goes far to sustain the dismissal of the intervenors'
petition in G.R. No. 100481 for the review of the same decision of the Court of Appeals. After all, the intervenors' petition is
based on substantially the same grounds as those stated in the government's petition. It is now settled that the dismissal of
a petition for review on certiorari is an adjudication on the merits of a controversy.[16] Such dismissal can only mean that the
Supreme Court agrees with the findings and conclusions of the Court of Appeals or that the decision sought to be reviewed
is correct.[17]
It is significant to note that the Secretary of Transportation and Communications and the PPA, petitioners in G.R. No.
100109, have conceded the finality of the dismissal of their appeal. [18] Thus, the administrative policy, the validity of which
herein petitioners seek to justify by their appeal, has already been abandoned by the very administrative agency which
adopted it, with the result that the question of validity of A.O. No. 02-88 is now moot and academic.
C. Whether the Trial Court has Jurisdiction to Hear and

Decide the Contempt Charges
against Petitioners
(G.R. No. 107720)
As already noted, following the dismissal of the government's appeal in G.R. No. 100109, the PPA abandoned A.O.
No. 02-88 which provided for "Open Pilotage System." But it subsequently promulgated Administrative Order No. 05-92,
under which the PPA assumed the power of scheduling and assigning pilots to service vessels, allegedly regardless of
whether the pilots assigned are or are not members of the UHPAP and the MPA which theretofore had been the exclusive
agencies rendering pilotage service in Philippine ports. The UHPAP and the MPA saw the adoption of this system as a
return to the "Open Pilotage System" and, therefore, a violation of the trial court's decision invalidating the "Open Pilotage
System." They considered this to be a contempt of the trial court.
Petitioners moved to dismiss the motions for contempt against them. They contend that even if the motions were filed
as incidents of Civil Case No. 88-44726, the RTC-Manila, Branch 2 did not have jurisdiction to hear them because the main
case was no longer before the court and the fact was that the contempt citation was not an incident of the case, not even of
its execution, but a new matter raising a new cause of action which must be litigated in a separate action, even as
petitioners denied they had committed any contumacious act by the issuance of A.O. No. 05-92.
Private respondents maintained that their petitions were mere incidents of Civil Case No. 88-44726 and that the trial
court has jurisdiction because in fact this Court had not yet remanded the case to the court a quo for execution of its
decision. Private respondents complain that petitioners are trying to circumvent the final and executory decision of the court
in Civil Case No. 88-44726, through the issuance of A.O. No. 05-92.
As already noted, however, the decision of the trial court in Civil Case No. 88-44726 enjoined petitioners from
implementing the so called "Open Pilotage System" embodied in A O. No. 02-88. If, as alleged, A.O. No. 05-92 is in
substance a reenactment of A.O. No. 02-88, then there is basis for private respondents' invocation of the trial court's
jurisdiction to punish for contempt.
Still it is argued that the trial court lost jurisdiction over Civil Case No. 887426, upon the perfection of their appeal from
its decision. That is indeed true. "The appeal transfers the proceedings to the appellate court, and this last court becomes
thereby charged with the authority to deal with contempt's committed after perfection of the appeal."[19] The trial court would
have jurisdiction only in the event of an attempt to block execution of its decision and that would be after the remand of the
case to the trial court.[20] Until then the trial court would have no jurisdiction to deal with alleged contemptuous acts.
The fly in the ointment, however, is that by accepting the dismissal of their petition for review in G.R. No. 100109,
petitioners rendered execution of the decision of the trial court superfluous. Any attempt by them, therefore, to disobey the
court's final injunction as embodied in its decision would be properly subject to punishment for contempt. Petitioners'
contention that private respondents' complaint must be the subject of a separate action would nullify contempt proceedings
as means of securing obedience to the lawful processes of a court. Petitioners' theory would reward ingenuity and cunning
in devising orders which substantially are the same as the order previously prohibited by the court.
We hold that the trial court has jurisdiction to hear the motions for contempt filed by private respondent, subject to any
valid defense which petitioners may interpose.
III. JUDGMENT
WHEREFORE, the several petitions in these cases are DISMISSED.

SO ORDERED.
THIRD DIVISION
[G.R. No. 139813. January 31, 2001]

JOELBITO-ONON, petitioner, vs. HON. JUDGE NELIA YAP FERNANDEZ, R.T.C. Br. 50 Puerto Princesa City and
Palawan, and ELEGIO QUEJANO, JR., respondents.
DECISION
GONZAGA-REYES, J.:
This Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and writ of
injunction seeks the reversal of the Order of the Regional Trial Court of Palawan and Puerto Princesa City, [1] Branch 50 in
SPL. PROC. NO. 1056 entitled Elegio F. Quejano, Jr., petitioner vs. Joel Bito-Onon, et. al., respondents which denied
herein petitioners motion to dismiss the Petition for Review of the Resolution of the Board of Election Supervisors dated
August 25, 1997 in case number L-10-97 filed by herein private respondent with said court.
It appears from the records that the petitioner, Joel Bito-Onon is the duly elected Barangay Chairman of Barangay
Tacras, Narra, Palawan and is the Municipal Liga Chapter President for the Municipality of Narra, Palawan. The private
respondent, Elegio Quejano, Jr. on the other hand, is the duly elected Barangay Chairman of Barangay Rizal, Magsaysay,
Palawan and is the Municipal Liga Chapter President for the Municipality of Magsaysay, Palawan. Both Onon and Quejano
were candidates for the position of Executive Vice-President in the August 23, 1997 election for the Liga ng Barangay
Provincial Chapter of the province of Palawan. Onon was proclaimed the winning candidate in the said election prompting
Quejano to file a post proclamation protest with the Board of Election Supervisors (BES), which was decided against him on
August 25, 1997.
Not satisfied with the decision of the BES, Quejano filed a Petition for Review of the decision of the BES with the
Regional Trial Court of Palawan and Puerto Princesa City (RTC). On April 26, 1999, Onon filed a motion to dismiss the
Petition for Review raising the issue of jurisdiction. Onon claimed that the RTC had no jurisdiction to review the decisions
rendered by the BES in any post proclamation electoral protest in connection with the 1997 Liga ng mga Barangay election
of officers and directors. In his motion to dismiss, Onon claimed that the Supplemental Guidelines for the 1997 Liga ng mga
Barangay election issued by the DILG on August 11, 1997 in its Memorandum Circular No. 97-193, providing for review of
decisions or resolutions of the BES by the regular courts of law is an ultra vires act and is void for being issued without or in
excess of jurisdiction, as its issuance is not a mere act of supervision but rather an exercise of control over the Ligas
internal organization.
On June 22, 1999, the RTC denied Onons motion to dismiss. In its order, the RTC ratiocinated that the Secretary of
the Department of Interior and Local Government[2] is vested with the power to establish and prescribe rules, regulations
and other issuances and implementing laws on the general supervision of local government units and the promotion of local
autonomy and monitor compliance thereof by said units.[3] The RTC added that DILG Circular No. 97-193 was issued by the
DILG Secretary pursuant to his rule-making power as provided for under Section 7, Chapter II, Book IV of the Administrative
Code.[4] Consequently, the RTC ruled that it had jurisdiction over the petition for review filed by Quejada. [5]
Motion for reconsideration of the aforesaid Order was denied [6] prompting the petitioner to file the present petition
wherein the following issues are raised:
A. WHETHER OR NOT THE QUESTIONED PROVISION IN MEMORANDUM CIRCULAR 97-193 WAS ISSUED
BY THE DILG SECRETARY IN EXCESS OF HIS AUTHORITY.
B. WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN
ISSUING THE QUESTIONED ORDERS.[7]
In support of his petition, Onon argues that the Supplemental Guidelines for the 1997 Synchronized Election of the
Provincial and Metropolitan Chapters and for the Election of the National Chapter of the Liga ng mga Barangay contradicts
the Implementing Rules and Guidelines for the 1997 General Elections of the Liga ng mga Barangay Officers and Directors
and is therefore invalid. Onon alleges that the Liga ng mga Barangay (LIGA) is not a local government unit considering that
a local government unit must have its own source of income, a certain number of population, and a specific land area in
order to exist or be created as such. Consequently, the DILG only has a limited supervisory authority over the
LIGA. Moreover, Onon argues that even if the DILG has supervisory authority over the LIGA, the act of the DILG in issuing
Memorandum Circular No. 97-193 or the supplemental rules and guidelines for the conduct of the 1997 LIGA elections had
the effect of modifying, altering and nullifying the rules prescribed by the National Liga Board. Onon posits that the issuance
of said guidelines allowing an appeal of the decision of the BES to the regular courts rather than to the National Liga Board
is no longer an exercise of supervision but an exercise of control.[8]
In his comment to the petition, private respondent Quejano argues that the Secretary of the DILG has competent
authority to issue rules and regulations like Memorandum Circular No. 97-893. The Secretary of DILGs rule-making power is
conferred by the Administrative Code. Considering that the Memorandum Circular was issued pursuant to his rule making
power, Quejano insists that the lower court did not commit any reversible error when it denied Onons motion to dismiss.[9]
On the other hand, the public respondent represented herein by the Solicitor General, filed a separate Manifestation
and Motion in Lieu of Comment agreeing with the position of petitioner Onon. The Solicitor General affirms Onons claim that
in issuing the questioned Memorandum Circular, the Secretary of the DILG effectively amended the rules and guidelines
promulgated by National Liga Board. This act was no longer a mere act of supervision but one of control. The Solicitor
General submits that the RTC committed grave abuse of discretion in not dismissing the petition for review of the BES
decision filed before it for failure of the petitioner to exhaust the rightful remedy which was to appeal to the National Liga
Board.[10]
On October 27, 1999, this Court denied petitioner Onons motion for the issuance of restraining order for lack of merit.
After a careful review of the case, we sustain the position of the petitioner.
The resolution of the present controversy requires an examination of the questioned provision of Memorandum Circular
No. 97-193 and the Implementing Rules and Guidelines for the 1997 General Elections of the Liga ng mga Barangay
Officers and Directors (GUIDELINES). The memorandum circular reads, insofar as pertinent, as follows:
Any post-proclamation protest must be filed with the BES within twenty-four (24) hours from the closing of the election. The
BES shall decide the same within forty-eight (48) hours from receipt thereof. The decision of the BES shall be final and
immediately executory without prejudice to the filing of a Petition for Review with the regular courts of law. [11] (emphasis
supplied)
On the other hand, the GUIDELINES provides that the BES shall have the following among its duties:
To resolve any post-proclamation electoral protest which must be submitted in writing to this Board within twenty-four (24)
hours from the close of election; provided said Board shall render its decision within forty-eight (48) hours from receipt
hereof; and provided further that the decision must be submitted to the National Liga Headquarters within twenty-four (24)
hours from the said decision. The decision of the Board of Election Supervisors in this respect shall be subject to review by
the National Liga Board the decision of which shall be final and executory.[12] (emphasis supplied)
Memorandum Circular No. 97-193 was issued by the DILG Secretary pursuant to the power of general supervision of
the President over all local government units which was delegated to the DILG Secretary by virtue of Administrative Order
No. 267 dated February 18, 1992.[13] The Presidents power of general supervision over local government units is conferred
upon him by the Constitution.[14] The power of supervision is defined as the power of a superior officer to see to it that lower
officers perform their functions in accordance with law.[15] This is distinguished from the power of control or the power of an
officer to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute
the judgment of the former for the latter.[16]
On many occasions in the past, this court has had the opportunity to distinguish the power of supervision from the
power of control. In Taule vs. Santos,[17] we held that the Chief Executive wielded no more authority than that of checking
whether a local government or the officers thereof perform their duties as provided by statutory enactments. He cannot
interfere with local governments provided that the same or its officers act within the scope of their authority. Supervisory
power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining
authority over such body.[18] Officers in control lay down the rules in the doing of an act. If they are not followed, it is
discretionary on his part to order the act undone or re-done by his subordinate or he may even decide to do it
himself. Supervision does not cover such authority. Supervising officers merely sees to it that the rules are followed, but he
himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not
observed, he may order the work done or re-done to conform to the prescribed rules. He cannot prescribe his own manner
for the doing of the act.[19]
Does the Presidents power of general supervision extend to the liga ng mga barangay, which is not a local government
unit?[20]
We rule in the affirmative. In Opinion No. 41, Series of 1995, the Department of Justice ruled that the liga ng mga
barangay is a government organization, being an association, federation, league or union created by law or by authority of
law, whose members are either appointed or elected government officials. The Local Government Code[21] defines the liga
ng mga barangay as an organization of all barangays for the primary purpose of determining the representation of the liga in
the sanggunians, and for ventilating, articulating and crystallizing issues affecting barangay government administration and
securing, through proper and legal means, solutions thereto. [22] The liga shall have chapters at the municipal, city, provincial
and metropolitan political subdivision levels. The municipal and city chapters of the liga shall be composed of the barangay
representatives of the municipal and city barangays respectively. The duly elected presidents of the component municipal
and city chapters shall constitute the provincial chapter or the metropolitan political subdivision chapter. The duly elected
presidents of highly urbanized cities, provincial chapters, the Metropolitan Manila chapter and metropolitan political
subdivision chapters shall constitute the National Liga ng mga Barangay.[23]
The liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly elect a
president, a vice-president and five (5) members of the board of directors. The board shall appoint its secretary and
treasurer and create such other positions as it may deem necessary for the management of the chapter. [24]
The ligas are primarily governed by the provisions of the Local Government Code. [25] However, their respective
constitution and by-laws shall govern all other matters affecting the internal organization of the liga not otherwise provided
for in the Local Government Code provided that the constitution and by-laws shall be suppletory to the provisions of Book
III, Title VI of the Local Government Code and shall always conform to the provisions of the Constitution and existing
laws.[26]
Having in mind the foregoing principles, we rule that Memorandum Circular No. 97-193 of the DILG insofar as it
authorizes the filing a Petition for Review of the decision of the BES with the regular courts in a post proclamation electoral
protest is of doubtful constitutionality. We agree with both the petitioner and the Solicitor General that in authorizing the filing
of the petition for review of the decision of the BES with the regular courts, the DILG Secretary in effect amended and
modified the GUIDELINES promulgated by the National Liga Board and adopted by the LIGA which provides that the
decision of the BES shall be subject to review by the National Liga Board. The amendment of the GUIDELINES is more
than an exercise of the power of supervision but is an exercise of the power of control, which the President does not have
over the LIGA. Although the DILG is given the power to prescribe rules, regulations and other issuances, the Administrative
Code limits its authority to merely monitoring compliance by local government units of such issuances.[27] To monitor means
to watch, observe or check and is compatible with the power of supervision of the DILG Secretary over local governments,
which is limited to checking whether the local government unit concerned or the officers thereof perform their duties as per
statutory enactments.[28] Besides, any doubt as to the power of the DILG Secretary to interfere with local affairs should be
resolved in favor of the greater autonomy of the local government. [29]
The public respondent judge therefore committed grave abuse of discretion amounting to lack or excess of jurisdiction
in not dismissing the respondents Petition for Review for failure to exhaust all administrative remedies and for lack of
jurisdiction.
WHEREFORE, the instant petition is hereby GRANTED. The Order of the Regional Trial Court dated June 22, 1999 is
REVERSED and SET ASIDE. The Petition for Review filed by the private respondent docketed as SPL. PROC. NO. 1056 is
DISMISSED.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. 78385 August 31, 1987
PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,

vs.
THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent.
GANCAYCO, J.:
This is an original Petition for prohibition with a prayer for the issuance of a writ of preliminary injunction.
The record of the case discloses that the herein petitioner Philippine Consumers Foundation, Inc. is a non-stock, non-profit
corporate entity duly organized and existing under the laws of the Philippines. The herein respondent Secretary of
Education, Culture and Sports is a ranking cabinet member who heads the Department of Education, Culture and Sports of
the Office of the President of the Philippines.
On February 21, 1987, the Task Force on Private Higher Education created by the Department of Education, Culture and
Sports (hereinafter referred to as the DECS) submitted a report entitled "Report and Recommendations on a Policy for
Tuition and Other School Fees." The report favorably recommended to the DECS the following courses of action with
respect to the Government's policy on increases in school fees for the schoolyear 1987 to 1988
(1) Private schools may be allowed to increase its total school fees by not more than 15 per cent to 20 per
cent without the need for the prior approval of the DECS. Schools that wish to increase school fees beyond
the ceiling would be subject to the discretion of the DECS;
(2) Any private school may increase its total school fees in excess of the ceiling, provided that the total
schools fees will not exceed P1,000.00 for the schoolyear in the elementary and secondary levels, and
P50.00 per academic unit on a semestral basis for the collegiate level. 1
The DECS took note of the report of the Task Force and on the basis of the same, the DECS, through the respondent
Secretary of Education, Culture and Sports (hereinafter referred to as the respondent Secretary), issued an Order
authorizing, inter alia, the 15% to 20% increase in school fees as recommended by the Task Force. The petitioner sought a
reconsideration of the said Order, apparently on the ground that the increases were too high. 2 Thereafter, the DECS issued
Department Order No. 37 dated April 10, 1987 modifying its previous Order and reducing the increases to a lower ceiling of
10% to 15%, accordingly. 3 Despite this reduction, the petitioner still opposed the increases. On April 23, 1987, the
petitioner, through counsel, sent a telegram to the President of the Philippines urging the suspension of the implementation
of Department Order No. 37. 4 No response appears to have been obtained from the Office of the President.
Thus, on May 20, 1987, the petitioner, allegedly on the basis of the public interest, went to this Court and filed the instant
Petition for prohibition, seeking that judgment be rendered declaring the questioned Department Order unconstitutional. The
thrust of the Petition is that the said Department Order was issued without any legal basis. The petitioner also maintains that
the questioned Department Order was issued in violation of the due process clause of the Constitution in asmuch as the
petitioner was not given due notice and hearing before the said Department Order was issued.
In support of the first argument, the petitioner argues that while the DECS is authorized by law to regulate school fees in
educational institutions, the power to regulate does not always include the power to increase school fees. 5
Regarding the second argument, the petitioner maintains that students and parents are interested parties that should be
afforded an opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that the questioned
Order constitutes a denial of substantive and procedural due process of law.
Complying with the instructions of this Court, 6 the respondent Secretary submitted a Comment on the Petition. 7 The
respondent Secretary maintains, inter alia, that the increase in tuition and other school fees is urgent and necessary, and
that the assailed Department Order is not arbitrary in character. In due time, the petitioner submitted a Reply to the
Comment. 8 Thereafter, We considered the case submitted for resolution.
After a careful examination of the entire record of the case, We find the instant Petition devoid of merit.
We are not convinced by the argument that the power to regulate school fees "does not always include the power to
increase" such fees. Section 57 (3) of Batas Pambansa Blg. 232, otherwise known as The Education Act of 1982, vests the
DECS with the power to regulate the educational system in the country, to wit:
SEC. 57. Educations and powers of the Ministry. The Ministry shall:
xxx xxx xxx
(3) Promulgate rules and regulations necessary for the administration, supervision and regulation of the
educational system in accordance with declared policy.
xxx xxx xxx 9
Section 70 of the same Act grants the DECS the power to issue rules which are likewise necessary to discharge its
functions and duties under the law, to wit:
SEC. 70. Rule-making Authority. The Minister of Education and Culture, charged with the administration
and enforcement of this Act, shall promulgate the necessary implementing rules and regulations.
In the absence of a statute stating otherwise, this power includes the power to prescribe school fees. No other government
agency 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 properly and effectively discharge its functions and duties under the law.
We find the remaining argument of the petitioner untenable. The petitioner invokes the due process clause of the
Constitution against the alleged arbitrariness of the assailed Department Order. The petitioner maintains that the due
process clause requires that prior notice and hearing are indispensable for the Department Order to be validly issued.
We disagree.
The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it
were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process.
As regards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and
hearing are essential to the validity of such rates. When the rules and/or rates laid down by an administrative agency are
meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where
the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function
is quasi-judicial in character. 9a
Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? We believe so. The assailed
Department Order prescribes the maximum school fees that may be charged by all private schools in the country for
schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to the validity of its issuance.
This observation notwithstanding, there is a failure on the part of the petitioner to show clear and convincing evidence of
such arbitrariness. As the record of the case discloses, the DECS is not without any justification for the issuance of the
questioned Department Order. It would be reasonable to assume that the report of the Task Force created by the DECS, on
which it based its decision to allow an increase in school fees, was made judiciously. Moreover, upon the instance of the
petitioner, as it so admits in its Petition, the DECS had actually reduced the original rates of 15% to 20% down to 10% to
15%, accordingly. Under the circumstances peculiar to this case, We cannot consider the assailed Department Order
arbitrary.
Under the Rules of Court, it is presumed that official duty has been regularly performed. 10 In the absence of proof to the
contrary, that presumption prevails. This being so, the burden of proof is on the party assailing the regularity of official
proceedings. In the case at bar, the petitioner has not successfully disputed the presumption.
We commend the petitioner for taking the cudgels for the public, especially the parents and the students of the country. Its
zeal in advocating the protection of the consumers in its activities should be lauded rather than discouraged. But a more
convincing case 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 without or in excess of her jurisdiction; or with grave abuse of discretion, and there is no
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law before the extraordinary writ of
prohibition may issue. 11
This Court, however, does not go to the extent of saying that it gives its judicial imprimatur to future increases in school
fees. The increases must not be unreasonable and arbitrary so as to amount to an outrageous exercise of government
authority and power. In 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.
WHEREFORE, in view of the foregoing, the instant Petition for prohibition is hereby DISMISSED for lack of merit. We make
no pronouncement as to costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento
and Cortes, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,

INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his
capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA CRUZ, in his capacity as
Director, Malacaang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV of the
1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable must be published in the Official
Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel respondent public officials to
publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general
orders, proclamations, executive orders, letter of implementation and administrative orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298, 303,
312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491,
503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836,
923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279,
1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173, 180,
187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251,
253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343,
346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498,
501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713,
726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535, 1538,
1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649, 1694-
1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787,
1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-
1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889, 1892,
1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044, 2046-2145, 2147-
2161, 2163-2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510, 522, 524-
528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609,
611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120,
122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have
no legal personality or standing to bring the instant petition. The view is submitted that in the absence of any showing that
petitioners are personally and directly affected or prejudiced by the alleged non-publication of the presidential issuances in
question 2 said petitioners are without the requisite legal personality to institute this mandamus proceeding, they are not
being "aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station,
or unlawfully excludes another from the use a rd enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying
that judgment be rendered commanding the defendant, immediately or at some other specified time, to do
the act required to be done to Protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to
compel the performance of a public duty, they need not show any specific interest for their petition to be given due course.
The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor General, 3 this Court
held that while the general rule is that "a writ of mandamus would be granted to a private individual only in those cases
where he has some private or particular interest to be subserved, or some particular right to be protected, independent of
that which he holds with the public at large," and "it is for the public officers exclusively to apply for the writ when public
rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right
and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special
interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High,
Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the mandamus
proceedings brought to compel the Governor General to call a special election for the position of municipal president in the
town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of authority supports the proposition that the relator is a
proper party to proceedings of this character when a public right is sought to be enforced. If the general rule
in America were otherwise, we think that it would not be applicable to the case at bar for the reason 'that it
is always dangerous to apply a general rule to a particular case without keeping in mind the reason for the
rule, because, if under the particular circumstances the reason for the rule does not exist, the rule itself is
not applicable and reliance upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by counsel for the
respondent. The circumstances which surround this case are different from those in the United States,
inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we have
seen that it is not the duty of the law officer of the Government to appear and represent the people in cases
of this character.
The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply
squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right recognized by
no less than the fundamental law of the land. If petitioners were not allowed to institute this proceeding, it would indeed be
difficult to conceive of any other person to initiate the same, considering that the Solicitor General, the government officer
generally empowered to represent the people, has entered his appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of
laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential
issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is
not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided, ...
The interpretation given by respondent is in accord with this Court's construction of said article. In a long line of
decisions, 4 this Court has ruled that publication in the Official Gazette is necessary in those cases where the legislation
itself does not provide for its effectivity date-for then the date of publication is material for determining its date of effectivity,
which is the fifteenth day following its publication-but not when the law itself provides for the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact of
publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily reached that
said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the
date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows:
Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and resolutions of
a public nature of the, Congress of the Philippines; [2] all executive and administrative orders and
proclamations, except such as have no general applicability; [3] decisions or abstracts of decisions of the
Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient importance to be
so published; [4] such documents or classes of documents as may be required so to be published by law;
and [5] such documents or classes of documents as the President of the Philippines shall determine from
time to time to have general applicability and legal effect, or which he may authorize so to be published. ...
The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to
regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the
application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a
citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance
that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature.
While the people are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansaand for
the diligent ones, ready access to the legislative recordsno such publicity accompanies the law-making process of the
President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been
promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. As the
Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales
decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su
potestad. 5
The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette ... ." The
word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be enforced if the
Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law
itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be included or excluded from such publication.
The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law. Obviously,
presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden or. the
people, such as tax and revenue measures, fall within this category. Other presidential issuances which apply only to
particular persons or class of persons such as administrative and executive orders need not be published on the
assumption that they have been circularized to all concerned. 6
It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a
requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and
specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land,
the requirement of due process and the Rule of Law demand that the Official Gazette as the official
government repository promulgate and publish the texts of all such decrees, orders and instructions so that
the people may know where to obtain their official and specific contents.
The Court therefore declares that presidential issuances of general application, which have not been published, shall have
no force and effect. Some members of the Court, quite apprehensive about the possible unsettling effect this decision might
have on acts done in reliance of the validity of those presidential decrees which were published only during the pendency of
this petition, have put the question as to whether the Court's declaration of invalidity apply to P.D.s which had been
enforced or implemented prior to their publication. The answer is all too familiar. In similar situations in the past this Court
had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act of Congress, having been found to be
unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and
hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago,
1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to
the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of
a statute, prior to such a determination, is an operative fact and may have consequences which cannot
justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various aspects-with respect to particular
conduct, private and official. Questions of rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature
both of the statute and of its previous application, demand examination. These questions are among the
most difficult of those which have engaged the attention of courts, state and federal and it is manifest from
numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be
justified.
Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under the Moratorium
Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this Court.
Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is "an
operative fact which may have consequences which cannot be justly ignored. The past cannot always be erased by a new
judicial declaration ... that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by petitioners
to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939,
inclusive, have not been so published. 10 Neither the subject matters nor the texts of these PDs can be ascertained since no
copies thereof are available. But whatever their subject matter may be, it is undisputed that none of these unpublished PDs
has ever been implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through Justice Ramon
Aquino, ruled that "publication is necessary to apprise the public of the contents of [penal] regulations and make the said
penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by respondent
officials considering the manifestation in their comment that "the government, as a matter of policy, refrains from
prosecuting violations of criminal laws until the same shall have been published in the Official Gazette or in some other
publication, even though some criminal laws provide that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances
which are of general application, and unless so published, they shall have no binding force and effect.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. 115942 May 31, 1995
RUBLE RUBENECIA, petitioner,

vs.
CIVIL SERVICE COMMISSION, respondent.
FELICIANO, J.:
Petitioner Ruble Rubenecia assails Civil Service Commission ("CSC" or "Commission") Resolution No. 94-0533, dated 25
January 1994, aquitting him of a charge of insubordination but finding him guilty of several other administrative charges and
imposing upon him the penalty of dismissal from the service. He also questions the validity of CSC Resolution No. 93-2387
dated 29 June 1993, which allegedly abolished the Merit System Protection Board ("MSPB") and authorized the elevation of
cases pending before that body to the Commission.
Teachers of Catarman National High School in Catarman, Northern Samar, filed before the MSPB an administrative
complaint against petitioner Rubenecia, the School Principal, for dishonesty, nepotism, oppression and violation of Civil
Service Rules. After a preliminary inquiry, the MSPB on 15 January 1992 formally charged Rubenecia and required him to
file an answer with the CSC Regional Office in Tacloban City. On 24 February 1992, petitioner Rubenecia, instead of filing
an answer, requested that he be furnished with copies of the documents submitted by complainants in support of the
charges against him. 1
On 15 May 1992, the CSC Regional Director assigned to investigate the case invited Rubenecia to the Regional Office and
there identify and pick up the documents he desired. The Regional Office had then just received the records of the case
transmitted by the MSPB.
In response, Rubenecia requested that his visit to the CSC Regional Office be deferred because of alleged problems in his
school relating to the enrollment period. The CSC reiterated on 10 June 1992 its order to Rubenecia to file his answer. In
turn, petitioner through counsel in a letter dated 9 July 1992, reiterated his request that the CSC Regional Office furnish him
copies of the documents submitted in connection with the charges against him.
Although petitioner did not file his answer, the Regional Director set the case for hearing on 20 August 1992. This hearing,
however, did not take place as the complainants did not there show up. Petitioner Rubenecia appeared at that hearing, but
filed no answer. In an order issued on the same day, i.e., 20 August 1992, the Regional Office declared that the case was
deemed submitted for resolution on the basis of the documents theretofore filed.
On 25 August 1992, Rubenecia wrote to the Chairman of the Civil Service Commission, praying that the case against him
be dismissed and attaching to that letter many documents in support of his claim of innocence.
On 28 September 1992, the Regional Director submitted an investigation report to the Chairman, MSPB. Before the MSPB
could render a decision, the Commission issued on 29 June 1993 Resolution No. 93-2387 which provided, among other
things, that cases then pending before the MSPB were to be elevated to the Commission for decision.
The Commission, accordingly, took over the case against petitioner and on 25 January 1994, rendered its Resolution No.
94-0533 finding petitioner guilty and ordering his dismissal from the service. Petitioner moved for reconsideration, asserting
lack of jurisdiction on the part of the Commission and attaching most if not all of the same documents he had annexed to his
letter-answer to support his assertion of innocence. The motion for reconsideration was denied in a resolution of the
Commission on 31 May 1994.
Two (2) principal issues are raised in this Petition for Certiorari:
(1) Whether or not the CSC had authority to issue its Resolution No. 93-2387 and assume jurisdiction over
the administrative case against petitioner; and
(2) Whether or not petitioner had been accorded due process in connection with rendition of CSC
Resolution No. 94-0533 finding him guilty and ordering his dismissal from the service.
In respect of the first issue, petitioner Rubenecia contends that the Commission had no jurisdiction to take over the
administrative case against him from the MSPB for the reason that CSC Resolution No. 93-2387 was invalid. The argument
of the petitioner is that since the MSPB was a creation of law, it could be abolished only by law, and that Resolution No. 93-
2387 was accordingly an ultra vires act on the part of the Commission.
Resolution No. 93-2387 reads in full:
WHEREAS, the Civil Service Commission recognizes the government-wide call and the need for
streamlining of operations which requires implification of systems, cutting of red tape and elimination of
unnecessary bureaucratic layer;
WHEREAS, one of the powers and functions of the Commission provided for in Section 12 (11) of Book V
of the Administrative Code of 1987 is to hear and decide administrative cases instituted by or
brought before it directly or on appeal, including contested appointments and review decisions and actions
of its offices and of the agencies attach to it;
WHEREAS, Section 47 (1) of Book V of the Administrative Code of 1987 specifically provides that
theCommission shall decide upon appeal all administrative disciplinary cases involving the imposition of
penalty of suspension for more that thirty days, or fine in an amount exceeding thirty days salary, demotion
in rank or salary or transfer removal or dismissal from office;
WHEREAS, under Section 16 (2) of Book V of the Code, the Merit System Protection Board (MSPB),an
office of the Commission, has the function to hear and decide administrative cases involving officials and
employees of the civil service concurrently with the Commission;
WHEREAS, most decisions on administrative cases rendered by the MSPB are later appealed to the
Commission for review and final resolution;
WHEREAS, the existing procedure wherein most administrative cases are first reviewed by the MSPB
before they are elevated to the Commission makes it difficult for these cases to be finally resolved within a
short period of time;
WHEREAS, the present situation requires immediate streamlining of the operation of the Civil Service
Commission to achieve as speedier delivery of administrative justice and economical operationwithout
impairing due process and the substantive rights of the parties in administrative cases;
NOW, THEREFORE, pursuant to the provisions of Section 17 of Book V of the Administrative Code of 1987
which authorizes the Commission, as an independent constitutional body, to effect changes in its
organization as the need arises, the Commission Resolves as it is hereby Resolved to effect the following
changes;
1. Decisions in administrative cases involving officials and employees of the civil

serviceappealable to the Commission pursuant to Section 47 of Book V of the Code
including personnel actions such as contested appointments shall now be appealed
directly to the Commission and not to the MSPB; and
2. Decisions and administrative cases involving the officials and employees of the Civil
Service including contested appointments which have already been appealed to the
MSPB and other pending administrative cases brought directly before the MSPB, shall
now be elevated to the Commission for final resolution.
Parties in administrative cases pending before the MSPB shall be notified in writing that their respective
cases have already been elevated to the Commission for final resolution. They shall have 15 days from
receipt of notice to submit their comments on or objections to the new procedures.
This Resolution shall take effect on 1 July 1993 and the new procedure shall remain effective until
rescinded by the Commission in another resolution.
Adopted this 29th day of June 1993.
Patricia A. Sto. Tomas

Chairman
Ramon P. Ereneta, Jr. Thelma P. Gaminde

Commissioner Commissioner
Juanito Demetrio
Board Secretary VI
(Emphasis supplied)
The Merit System Protection Board was originally created by P.D. No. 1409, dated 8 June 1978, Section 1 of which said:
"There is hereby created in the Civil Service Commission a Merit Systems Board." The Board was composed of "a
commissioner and two (2) associate commissioners" appointed by the CSC. 2 The powers and functions of this Board were
set out in Section 5 of P.D. No. 1409 in the following terms:
Sec. 5. Powers and Functions of the Board. The Board shall have the following powers and functions,
among others:
(1) Hear and decide administrative cases involving officers and employees of the civil service.
(2) Hear and decide cases brought before it by officers and employees who feel aggrieved by the
determination of appointing authorities involving appointment promotion, transfer, detail, reassignment and
other personnel actions, as well as complaints against any officers in the government arising from abuses
arising from personnel actions of these officers or from violation of the merit system.
(3) Hear and decide complaints of civil service employees regarding malpractices of other officials and
employees.
(4) Promulgate, subject to the approval of the Civil Service Commission, rules and regulations to carry out
the functions of the Board.
(5) Administer oaths, issue subpoena and subpoena duces tecum, and take testimony in any investigation
or inquiry. The Board shall have the power to punish for contempt in accordance with the rules of court
under the same procedure with the same penalties provided therein.
(6) Perform such other functions as may be assigned by the Civil Service Commission.
xxx xxx xxx

Decisions of the Board involving removal of officers and employees from the service were "subject to automatic review by
the Commission;" all other decisions of the Board were also subject to appeal to the Commission. 3
As noted, P.D. No. 1409 had "created in the Civil Service Commission [the] Merit Systems Board." Section 16 of the present
Civil Service Law found in the 1987 Administrative Code followed the same line and re-created the Merit Systems Board as
an office of the Commission and gave it a new name: "Merit System Protection Board."
Section 16 of the present Civil Service Law reads as follows, in pertinent part:
Sec. 16. Offices in the Commission. The Commission shall have the following offices:
(1) The Office of the Executive Director . . .
(2) The Merit System Protection Board composed of a Chairman and two (2) members which have the
following functions:
(a) Hear and decide on appeal administrative cases involving officials and employees of
the Civil Service. Its decision shall be final except those involving dismissal or separation
from the service which may be appealed to the Commission;
(b) Hear and decide cases brought before it on appeal by officials and employees who feel
aggrieved by the determination of appointing authorities involving personnel actions and
violations of the merit system. The decision of the Board shall be final except those
involving division chiefs or officials of higher ranks which may be appealed to the
Commission;
(c) Directly take cognizance of complaints affecting functions of the Commission, those
which are unacted upon by the agencies, and such other complains which required direct
action of the Board in the interest of justice;
(d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any
investigation or inquiry, punish for contempt in accordance with the same procedures and
penalties prescribed in the Rules of Court; and
(e) Promulgate rules and regulations to carry out the functions of the Board subject to the
approval of the Commission.
(3) The Office of Legal Affairs . . . . .
xxx xxx xxx
The 1987 Administrative Code thus made clear that the MSPB was intended to be an office of the Commissionlike any of
the other thirteen (13) offices in the Commission: e.g., the Office of Legal Affairs; the Office of Planning and Management;
the Central Administrative Office, and so forth. The MSPB was, in other words, a part of the internal structure and
organization of the Commission and thus a proper subject of organizational change which the Commission is authorized to
undertake under Section 17 of the present Civil Service Law:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at
least one (1) Assistant Director, and may have such divisions as are necessary to carry out their respective
functions. As an independent constitutional body, the Commission may effect changes in the organization
as the need arises. (Emphasis supplied).
Since it was part and parcel of the internal organization of the Commission, the MSPB was not an autonomous entity
created by law and merely attached for administrative purposes to the Civil Service Commission. In Aida Eugenio v. Civil
Service Commission, 4 the Court invalidated a CSC Resolution which had transferred the Career Executive Service Board to
the Office for Career Executive Service of the CSC precisely because the Career Executive Service Board was an
autonomous entity created by a special law and attached, for administrative purposes only, to the Civil Service Commission;
that Board did not fall within the control of the Civil Service Commission.
It will be noted that under the provisions of Section 16 (2) (a) and (b) quoted earlier, cases originating outside the Civil
Service Commission itself and appealed to the MSPB were, in cases involving division chiefs and higher officials and cases
where the penalty imposed was dismissal or separation from the service, subject to further appeal to the Commission itself.
At the same time, cases filed originally with the MSPB could also be filed directly with the Commission itself under Section
12 (11) of the Civil Service Law. It was this apparent duplication or layering of functions within the Commission that the
Commission sought to rationalize and eliminate by enacting Resolution No. 93-2387 quoted in full earlier.
The change instituted by CSC Resolution No. 93-2387 consisted basically of the following: decision in administrative cases
appealable to the Commission pursuant to Section 47 of the present Civil Service Law may now be appealed directly to the
Commission itself and not to the MSPB. Administrative cases already pending on appeal before the MSPB or previously
brought directly to the MSPB, at the time of the issuance of Resolution No. 93-2387, were required to be elevated to the
Commission for final resolution. The functions of the MSPB relating to the determination of administrative disciplinary cases
were, in other words, re-allocated to the Commission itself. These changes were prescribed by the Commission in its effort
to "streamline the operation of the CSC" which in turn required the "simplification of systems, cutting of red tape and
elimination of [an] unnecessary bureaucratic layer." The previous procedure made it difficult for cases to be finally resolved
within a reasonable period of time. The change, therefore, was moved by the quite legitimate objective of simplifying the
course that administrative disciplinary cases, like those involving petitioner Rubenecia, must take. We consider that
petitioner Rubenecia had no vested right to a two-step administrative appeal procedure within the Commission, that is,
appeal to an office of the Commission, the MSPB, and thereafter a second appeal to the Civil Service Commission itself
(i.e., the Chairman and the two [2] Commissioners of the Civil Service Commission), a procedure which most frequently
consumed a prolonged period of time.
We note also that Resolution No. 93-2387 did not purport to abolish the MSPB nor to effect the termination of the
relationship of public employment between the Commission and any of its officers or employees. At all events, even if
Resolution No. 93-2387 had purported to do so, petitioner Rubenecia, who does not claim to be an officer or employee of
the MSPB, has no personality or standing to contest such termination of public employment. InFernandez and De Lima v.
Hon. Patricia A. Sto. Tomas, etc., et al., 5 the Court upheld Resolution No. 94-3710 of the Civil Service which effected
certain changes in the internal organization and structure of the Commission. The Court said:
We consider that Resolution No. 94-3710 has not abolished any public office as that term is used in the law
of public officers. It is essential to note that none of the "changes in organization" introduced by Resolution
No. 94-3710 carried with it or necessarily involved the termination of the relationship of public employment
between the Commission and any of its officers and employees. We find it very difficult to suppose that the
1987 Revised Administrative Code having mentioned fourteen (14) different offices of the CSC, meant to
freeze these offices and to cast in concrete, as it were, the internal organization of the Commission until it
might please Congress to change such internal organization regardless of the ever changing needs of the
civil service as a whole. To the contrary, the legislative authority had expressly authorized the Commission
to carry out "changes in the organization," as the need [for such changes] arises.
Petitioner Rubenecia also claims that the Civil Service Commission itself (as distinguished from the MSPB) did not acquire
jurisdiction over his case because he had not been notified by individual written notice sent by mail that his case had been
elevated to the Civil Service Commission as required by Resolution No. 93-2387. We consider this objection unmeritorious.
CSC Resolution No. 93-2387, quoted earlier, did not require individual written notice sent by mail to parties in administrative
cases pending before the MSPB. Assuming that Rubenecia had not in fact been sent an individual notice, the fact remains
that Resolution No. 93-2387 was published in a newspaper of general circulation (The Manila Standard, issue of 16 July
1993 6 ); the Commission may accordingly be deemed to have complied substantially with the requirement of written notice
in its own Resolution. Moreover, petitioner himself had insisted on pleading before the Commission, rather than before the
MSPB; he filed before the Commission itself his letter-cum-annexes which effectively was his answer to the Formal Charge
instituted before the MSPB. He cannot now be heard to question the jurisdiction of the Commission.
II
We turn to petitioner's contention that he had been denied due process when the Commission rendered its Resolution No.
94-0533 finding him guilty and ordering his dismissal from the government service.
The fundamental rule of due to process requires that a person be accorded notice and an opportunity to be heard. These
requisites were respected in the case of petitioner Rubenecia.
The Formal Charge prepared by the MSPB and given to petitioner Rubenecia constituted sufficient notice which, in fact, had
enabled him to prepare his defense. The Formal Charge contained the essence of the complaint and the documents in
support thereof and the conclusion of the MSPB finding a prima facie case against Rubenecia. Rubenecia himself admitted
that he had been furnished with copies of an affidavit and testimonies of the principal witnesses against him that were given
during the preliminary hearing of the case against Rubenecia. 7
We are also not persuaded by petitioner's complaint that he had not been furnished copies of all the documents that had
accompanied the Formal Charge. Rubenecia was given an opportunity by the Investigating Officer, the Regional Director of
CSC, to obtain those documents from the CSC Regional Office. Rubenecia did not avail himself of that opportunity and he
cannot now be heard to complain that he was not given such documents. At all events, as already noted, he sent a formal
letter-answer to Chairman Sto. Tomas controverting the charges against him and submitted voluminous documents in
support of his claim of innocence and prayed for dismissal of the Formal Charge. This letter-answer constitutes proof that he
did have notice of the accusations against him and was in fact able to present his own defense.
Petitioner's answer to the Formal Charge was considered by the Investigating Officer. This Officer, however, concluded in
his report that "the evidence presented by respondent [Rubenecia] could not outweigh that of the prosecution as contained
in the records. 8
Finally, the motion for reconsideration filed by Rubenecia before the Commission cured whatever defect might have existed
in respect of alleged denial of procedural due process. 9 Denial of due process cannot be successfully invoked by a party
who has had the opportunity to be heard on his motion for reconsideration. 10 In the instant case, petitioner was heard not
only in respect of his motion for reconsideration; he was also in fact afforded reasonable opportunity to present his
case before decision was rendered by the Commission finding him guilty.
Rubenecia also claims that the Commission had erred in disregarding the "overwhelming evidence" in his favor. The settled
rule in our jurisdiction is that the findings of fact of an administrative agency must be respected, so long as such findings of
fact are supported by substantial evidence, even if such evidence might not be overwhelming or even preponderant. It is not
the task of an appellate court, like this Court, to weigh once more the evidence submitted before the administrative body
and to substitute its own judgment for that of the administrative agency in respect of sufficiency of evidence. 11 In the
present case, in any event, after examination of the record of this case, we conclude that the decision of the Civil Service
Commission finding Rubenecia guilty of the administrative charges prepared against him, is supported by substantial
evidence.
In Resolution No. 94-0533, the Commission drew the following conclusions in respect of the charges against petitioner
Rubenecia:
I. VIOLATION OF CIVIL SERVICE RULES AND REGULATIONS
The records show that Rubenecia committed the said offense. He himself admitted that he did not
accomplish his DTR but this was upon the suggestion of the Administrative Officer. Rubenecia cannot use
as an excuse the alleged suggestion of an Administrative Officer. As the principal of a national high School,
he is expected to know the basic civil service law, rules, and regulations.
II DISHONESTY
The Commission finds Rubenecia liable. He was charged for misrepresenting that he was on "Official
Travel" to Baguio City to attend a three-week seminar and making it appear in his CSC Form No. 7 for the
month of October 1988 that the has a perfect attendance for that month. Rubenecia in order to rebut the
same simply reiterated previous allegation that he attended the SEDP Training in Baguio City during the
questioned months without even an attempt on his part to adduce evidence documentary or testimonial that
would attest to the truth of his allegation that he was indeed in Baguio during those weeks for training
purposes. A mere allegation cannot obviously prevail over a more direct and positive statement of
Celedonio Layon, School Division Superintendent, Division of Northern Samar, when the latter certified that
he had no official knowledge of the alleged "official travel" of Rubenecia. Moreover, verification with the
Bureau of Secondary Schools reveals that no training seminar for school principal was conducted by DECS
during that time. It was also proven by records that he caused one Mrs. Cecilia vestra to render service as
Secondary School Teacher from January 19, 1990 to August 30, 1991 without any duly issued appointment
by the appointing authority.
III. NEPOTISM
With respect to the charge of Nepotism, Rubenecia alleged that he is not the appointing authority with
regard to the appointment of his brother-in-law as Utilityman but merely a recommending authority. With
this statement, the Commission finds Rubenecia guilty. It should be noted that under the provision of Sec.
59, of the 1987 Administrative Code, the recommending authority is also prohibited from recommending the
appointment to a non-teaching position of his relatives within the prohibited degree.
IV. OPPRESSION
Rubenecia is also guilty of Oppression. He did not give on time the money benefits due to Ms. Leah
Rebadulla and Mr. Rolando Tafalla, both Secondary Teachers of CNHS, specifically their salary
differentials for July to December 1987, their salaries for the month of May and half of June 1988; their
proportional vacation salaries for the semester of 1987-1988, and the salary of Mr. Tafalla for the month of
June, 1987. Rubenecia did not even attempt to present countervailing evidence. Without being specifically
denied, they are deemed admitted by Rubenecia.
V INSUBORDINATION
He is not liable for Insubordination arising from his alleged refusal to obey the "Detail Order" by filing a sick
leave and vacation leave successively. The records show that the two applications for leave filed by
Rubenecia were duly approved by proper official, hence it cannot be considered an act of Insubordination
on the part of Rubenecia when he incurred absences based on an approved application for leave of
absence.
Rubenecia is therefore found guilty of Dishonesty, Nepotism, Oppression and Violations of Civil Service
Rules and Regulations.
WHEREFORE, foregoing premises considered, the Commission hereby resolves to find Ruble Rubenecia
guilty of Dishonesty, Nepotism, Oppression and Violation of Civil Service Rules and Ragulations.
Accordingly, he is meted, out the penalty of dismissal from the service. 12
We find no basis for overturning the above conclusions as the product merely of arbitrary whims and caprice or of
bad faith and malice.
We conclude that petitioner Rubenecia has failed to show grave abuse of discretion or any act without or in excess of
jurisdiction on the part of public respondent Commission in issuing its Resolution No. 93-2387 dated 29 June 1993 and
Resolution No. 94-0533 dated 25 January 1994.
WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-64279 April 30, 1984
ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners,

vs.
JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City Branch 129, acting for REGIONAL TRIAL
COURT of Camarines Norte, now presided over by JUDGE NICANOR ORIO, Daet Branch 40; DRA. BELLA S.
MIRANDA, ARNULFO V. ZENAROSA, ET AL., respondents.
Quiazon, De Guzman Makalintal and Barot for petitioners.
The Solicitor General for respondents.
AQUINO, J.:+.wph!1
At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of Presidential
Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by the government of
carabaos transported from one province to another.
Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the evening of
April 2, 1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia, Batangas, as the destination.
They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under the Revised
Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a permit to transport large
cattle issued under the authority of the provincial commander; and (3) three certificates of inspection, one from the
Constabulary command attesting that the carabaos were not included in the list of lost, stolen and questionable animals;
one from the LIvestock inspector, Bureau of Animal Industry of Libmanan, Camarines Sur and one from the mayor of
Sipocot.
In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud, Camarines Norte,
were confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander, and by Doctor Bella S. Miranda,
provincial veterinarian. The confiscation was basis on the aforementioned Executive Order No. 626-A which provides "that
henceforth, no carabao, regardless of age, sex, physical condition or purpose and no carabeef shall be transported from
one province to another. The carabaos or carabeef transported in violation of this Executive Order as amended shall be
subject to confiscation and forfeiture by the government to be distributed ... to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos" (78 OG 3144).
Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the Vinzons municipal
nursery (Annex 1).
The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the carabaos allegedly
valued at P70,000 and damages of P92,000. The replevin order could not be executed by the sheriff. In his order of April 25,
1983 Judge Domingo Medina Angeles, who heard the case at Daet and who was later transferred to Caloocan City,
dismissed the case for lack of cause of action.
The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and pursuant
to Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court.
We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already
noted, it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It became
effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the Revised Administrative
Code.
The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe penalties.
Publication is necessary to apprise the public of the contents of the regulations and make the said penalties binding on the
persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central Bank of the Phils., 104 Phil. 573;
Balbuna vs. Secretary of Education, 110 Phil. 150.)
The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los reglamentos,
Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las mismas por el Gobierno en
uso de su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)
Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No. 20 and
sentenced to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court because the circular was
published in the Official Gazette three months after his conviction. He was not bound by the circular.
That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision or sanction
makes it a penal statute. Justice and fairness dictate that the public must be informed of that provision by means of
publication in the Gazette before violators of the executive order can be bound thereby.
The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills vs.
Social Security System, 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal regulation.
Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should be published
in the Official Gazette. It provides that "every order or document which shag prescribe a penalty shall be deemed to have
general applicability and legal effect."
Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised Administrative
Code provides that even bureau "regulations and orders shall become effective only when approved by the Department
Head and published in the Official Gazette or otherwise publicly promulgated". (See Commissioner of Civil Service vs. Cruz,
122 Phil. 1015.)
In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of the Public
Affairs Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans could not have been
expected to be cognizant of such an executive order.
It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not in order. The
recipients of the carabaos should return them to the Pesigans. However, they cannot transport the carabaos to Batangas
because they are now bound by the said executive order. Neither can they recover damages. Doctor Miranda and Zenarosa
acted in good faith in ordering the forfeiture and dispersal of the carabaos.
WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed and set
aside. Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite documents, to the
petitioners, who as owners are entitled to possess the same, with the right to dispose of them in Basud or Sipocot,
Camarines Sur. No costs.
SO ORDERED.1wph1.t

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-62243 October 12, 1984
PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. REGINO VERIDIANO II, as Presiding Judge of the Court of First Instance of Zambales and Olongapo City,
Branch I, and BENITO GO BIO, JR., respondents.
The Solicitor General for petitioner.
Anacleto T. Lacanilao and Carmelino M. Roque for respondents.
RELOVA, J.:+.wph!1
Private respondent Benito Go Bio, Jr. was charged with violation of Batas Pambansa Bilang 22 in Criminal Case No. 5396
in the then Court of First Instance of Zambales, presided by respondent judge. The information reads: t.hqw
That on or about and during the second week of May 1979, in the City of Olongapo, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, guaranteeing the authenticity and
genuineness of the same and with intent to defraud one Filipinas Tan by means of false pretenses and
pretending to have sufficient funds deposited in the Bank of the Philippine Island, did then and there
wilfully, unlawfully and feloniously make and issue Bank of Philippine Island Check No. D-357726 in the
amount of P200,000.00 Philippine Currency, said accused well knowing that he has no sufficient funds at
the Bank of the Philippine Island and upon presentation of the said check to the bank for encashment, the
same was dishonored for the reason that the said accused has no sufficient funds with the said bank and
despite repeated demands made by Filipinas Tan on the accused to redeem the said check or pay the
amount of P200,000.00, said accused failed and continues to fail to redeem the said check or to pay the
said amount, to the damage and prejudice of said Filipinas Tan in the aforementioned amount of
P200,000.00 Philippine Currency. (pp. 23-24, Rollo)
Before he could be arraigned respondent Go Bio, Jr. filed a Motion to Quash the information on the ground that the
information did not charge an offense, pointing out that at the alleged commission of the offense, which was about the
second week of May 1979, Batas Pambansa Bilang 22 has not yet taken effect.
The prosecution opposed the motion contending, among others, that the date of the dishonor of the check, which is on
September 26, 1979, is the date of the commission of the offense; and that assuming that the effectivity of the law Batas
Pambansa Bilang 22 is on June 29, 1979, considering that the offense was committed on September 26, 1979, the said
law is applicable.
In his reply, private respondent Go Bio, Jr. submits that what Batas Pambansa Bilang 22 penalizes is not the fact of the
dishonor of the check but the act of making or drawing and issuing a check without sufficient funds or credit.
Resolving the motion, respondent judge granted the same and cancelled the bail bond of the accused. In its order of August
23, 1982, respondent judge said: t.hqw
The Court finds merit to the contention that the accused cannot be held liable for bouncing checks prior to
the effectivity of Batas Pambansa Bilang 22 although the check may have matured after the effectivity of
the said law. No less than the Minister of Justice decreed that the date of the drawing or making and
issuance of the bouncing check is the date to reckon with and not on the date of the maturity of the check.
(Resolution No. 67, S. 1981, People's Car vs. Eduardo N. Tan, Feb. 3, 1981; Resolution No. 192, S. 1981,
Ricardo de Guia vs. Agapito Miranda, March 20, 1981).
Hence, the Court believes that although the accused can be prosecuted for swindling (Estafa, Article 315 of
the Revised Penal Code), the Batas Pambansa Bilang 22 cannot be given a retroactive effect to apply to
the above entitled case. (pp. 49- 50, Rollo)
Hence, this petition for review on certiorari, petitioner submitting for review respondent judge's dismissal of the criminal
action against private respondent Go Bio, Jr. for violation of Batas Pambansa Bilang 22, otherwise known as the Bouncing
Checks Law.
Petitioner contends that Batas Pambansa Bilang 22 was published in the April 9, 1979 issue of the Official Gazette. Fifteen
(15) days therefrom would be April 24, 1979, or several days before respondent Go Bio, Jr. issued the questioned check
around the second week of May 1979; and that respondent judge should not have taken into account the date of release of
the Gazette for circulation because Section 11 of the Revised Administrative Code provides that for the purpose of
ascertaining the date of effectivity of a law that needed publication, "the Gazette is conclusively presumed to be published
on the day indicated therein as the date of issue."
Private respondent Go Bio, Jr. argues that although Batas Pambansa Bilang 22 was published in the Official Gazette issue
of April 9, 1979, nevertheless, the same was released only on June 14, 1979 and, considering that the questioned check
was issued about the second week of May 1979, then he could not have violated Batas Pambansa Bilang 22 because it
was not yet released for circulation at the time.
We uphold the dismissal by the respondent judge of the criminal action against the private respondent.
The Solicitor General admitted the certification issued by Ms. Charito A. Mangubat, Copy Editor of the Official Gazette
Section of the Government Printing Office, stating-t.hqw
This is to certify that Volume 75, No. 15, of the April 9, 1979 issue of the Official Gazette
was officiallyreleased for circulation on June 14, 1979. (p. 138, Rollo)
It is therefore, certain that the penal statute in question was made public only on June 14, 1979 and not on the printed date
April 9, 1979. Differently stated, June 14, 1979 was the date of publication of Batas Pambansa Bilang 22. Before the public
may be bound by its contents especially its penal provisions, the law must be published and the people officially informed of
its contents and/or its penalties. For, if a statute had not been published before its violation, then in the eyes of the law there
was no such law to be violated and, consequently, the accused could not have committed the alleged crime.
The effectivity clause of Batas Pambansa Bilang 22 specifically states that "This Act shall take effect fifteen days after
publication in the Official Gazette." The term "publication" in such clause should be given the ordinary accepted meaning,
that is, to make known to the people in general. If the Batasang Pambansa had intended to make the printed date of issue
of the Gazette as the point of reference in determining the effectivity of the statute in question, then it could have so stated
in the special effectivity provision of Batas Pambansa Bilang 22.
When private respondent Go Bio, Jr. committed the act, complained of in the Information as criminal, in May 1979, there
was then no law penalizing such act. Following the special provision of Batas Pambansa Bilang 22, it became effective only
on June 29, 1979. As a matter of fact, in May 1979, there was no law to be violated and, consequently, respondent Go Bio,
Jr. did not commit any violation thereof.
With respect to the allegation of petitioner that the offense was committed on September 26, 1979 when the check was
presented for encashment and was dishonored by the bank, suffice it to say that the law penalizes the act of making or
drawing and issuance of a bouncing check and not only the fact of its dishonor. The title of the law itself states:
AN ACT PENALIZING THE MAKING OR DRAWING AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT FUNDS OR
CREDIT AND FOR OTHER PURPOSES.
and, Sections 1 and 2 of said Batas Pambansa Bilang 22 provide: t.hqw
SECTION 1. Checks without sufficient funds. Any person who makes or draws and issues any check to
apply on account or for value, knowing at the time of issue that he does not have sufficient funds ... shall be
punished ...
The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the
drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain
a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date
appearing thereon, for which reason it is dishonored by the drawee bank.
xxx xxx xxx
SECTION 2. Evidence of knowledge of insufficient funds. The making, drawing and issuance of a check
payment of which is refused by the drawee because of insufficient funds ... . (Emphasis supplied)
ACCORDINGLY, the order of respondent judge dated August 23, 1982 is hereby AFFIRMED. No costs.
SO ORDERED.1wph1.t

SUPREME COURT
Manila
EN BANC
G.R. No. L-59234 September 30, 1982
TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION
CORPORATION, petitioners,
vs.
THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND
TRANSPORTATION,respondents.
MELENCIO-HERRERA, J.:
This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed
by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of
Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No.
52, dated August 15, 1980, of the Bureau of Land Transportation.
Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who
are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in
Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the
members of TOMMI, each being an operator and grantee of such certificate of public convenience.
On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of
Old and Dilapidated Taxis

WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as
public conveyances;
WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and
condemned, the continued operation of old and dilapidated taxis;
WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a
program of phasing out of old and dilapidated taxis should be adopted;
WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six
years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable
profit for his investments;
NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall
be operated as taxi, and in implementation of the same hereby promulgates the following rules and
regulations:
1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service
and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only
taxis of Model 1972 and later shall be accepted for registration and allowed for operation;
2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and
thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis
of Model 1973 and later shall be accepted for registration and allowed for operation; and every year
thereafter, there shall be a six-year lifetime of taxi, to wit:
1980 Model 1974
1981 Model 1975, etc.
All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as
of the last day of registration of each particular year and their respective plates shall be surrendered directly
to the Board of Transportation for subsequent turnover to the Land Transportation Commission.
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective
in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the project has
been implemented in Metro-Manila and only after the date has been determined by the Board. 1
Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing
Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all
within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be
allowed and accepted for registration as public conveyances. To quote said Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now
banned from operating as public utilities in Metro Manila. As such the units involved should be considered
as automatically dropped as public utilities and, therefore, do not require any further dropping order from
the BOT.
Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be
refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all
concerned:
Year Model Automatic

Phase-Out
Year
1980
1974 1981
1975 1982
1976 1983
1977
etc. etc.
Strict compliance here is desired. 2
In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those
of model 1973, in 1980; and those of model 1974, in 1981.
On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No. 77-
42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model
1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are
roadworthy and fit for operation.
On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of
their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence,
offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on
March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and
Submission of the Case for Resolution." 3
On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide
Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of
denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model
cabs are phased-out on January 1, 1982.
Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of
the case could not be located.
On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by
this Court:
A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required
by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due
process?
B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by
Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum
circulars violate the petitioners' constitutional rights to.
(1) Equal protection of the law;
(2) Substantive due process; and
(3) Protection against arbitrary and unreasonable classification and

standard?
On Procedural and Substantive Due Process:
Presidential Decree No. 101 grants to the Board of Transportation the power
4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to
be furnished, imposed, observed, and followed by operators of public utility motor vehicles.
Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:
Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board
shag proceed promptly along the method of legislative inquiry.
Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and
assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol
Group, the support agencies within the Department of Public Works, Transportation and Communications,
or any other government office or agency that may be able to furnish useful information or data in the
formulation of the Board of any policy, plan or program in the implementation of this Decree.
The Board may also can conferences, require the submission of position papers or other documents,
information, or data by operators or other persons that may be affected by the implementation of this
Decree, or employ any other suitable means of inquiry.
In support of their submission that they were denied procedural due process, petitioners contend that they were not caged
upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the
questioned BOT Circular.
It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in
gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should
first call a conference or require the submission of position papers or other documents from operators or persons who may
be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners
cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty
that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of
public conveyances are not the only primary sources of the data and information that may be desired by the BOT.
Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held
in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Pevious notice and hearing as elements of due process, are constitutionally required for the protection of
life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of
a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be
established or ascertained. It is not essential to the validity of general rules or regulations promulgated to
govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis
supplied)
Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the
roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore,
their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it is
impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to
the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be
adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable
standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair
return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the
public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours
per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met.
On Equal Protection of the Law:
Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being
enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that
implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion:
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective
in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been
implemented in Metro Manila and only after the date has been determined by the Board. 4
In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with
the BOT in the process of conducting studies regarding the operation of taxicabs in other cities.
The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other
places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that
traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection
clause can hardly be successfully claimed.
As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and
comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police
power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the
people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In
the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of
governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7
In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be
recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to
things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided
classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply
equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal
means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege
conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria.
Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law
unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable. 10
WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs.
SO ORDERED.
EN BANC
[G.R. No. 44291. August 15, 1936.]
THE PEOPLE OF THE PHILIPPINE ISLANDS, Plaintiff-Appellant, v. AUGUSTO A. SANTOS,Defendant-Appellee.
Solicitor-General Hilado for Appellant.
Arsenio Santos for Appellee.
SYLLABUS
1. FISHING IN ZONE PROHIBITED BY A REGULATION OF THE SECRETARY OF AGRICULTURE AND COMMERCE;

EXCESS OF REGULATORY POWERS CONFERRED BY ACT NO. 4003 AND EXERCISE OF LEGISLATIVE POWER.
The condition clause of section 28 of Administrative Order No. 2, issued by the Secretary of Agriculture and Commerce, is
null and void and without effect, as constituting an excess of the regulatory power conferred upon him by section 4 of Act
No. 4003 and an exercise of a legislative power which has not been and cannot be delegated to him.
DECISION
VILLA-REAL, J.:
This case is before us by virtue of an appeal taken by the prosecuting attorney from the order of the Court of First Instance
of Cavite which reads as follows:jgc:chanrobles.com.ph
"ORDER
"When this case was called for trial for the arraignment, counsel for the accused appeared stating that in view of the ruling
laid down by this court in criminal case No. 6785 of this court, holding that the penalty applicable is under section 83 of Act
No. 4003 which falls within the original jurisdiction of the justice of the peace court, he requests that the case be remanded
to the justice of the peace court of Cavite which conducted the preliminary investigation, so that the latter may try it, being
within its original jurisdiction.
"We agree that it falls within the jurisdiction of the corresponding justice of the peace court, but it being alleged in the
information that the infraction was committed within the waters of the Island of Corregidor, the competent justice of the
peace court is that of Corregidor, not Cavite.
"Wherefore, we decree the dismissal of this case, cancelling the bond filed by the accused, with costs de oficio, without
prejudice to the filing by the prosecuting attorney of a new information in the justice of the peace court of Corregidor, if he so
deems convenient. It is so ordered."cralaw virtua1aw library
In support of his appeal the appellant assigns as the sole alleged error committed by the court a quo its having dismissed
the case on the ground that it does not fall within its original jurisdiction.
On June 18, 1930, the provincial fiscal of Cavite filed against the accused-appellee August A. Santos an information which
reads as follows:jgc:chanrobles.com.ph
"The undersigned Provincial Fiscal accuses Augusto A. Santos of violation of section 28 of Fish and Game Administrative
Order No. 2 and penalized by section 29 thereof committed as follows:jgc:chanrobles.com.ph
"That on or about April 29, 1935, within 1,500 yards north of Cavalry Point, Corregidor Island, Province of Cavite, P. I., the
said accused Augusto A. Santos, the registered owner of two fishing motor boats Malabon II and Malabon III, did then and
there willfully, unlawfully and criminally have his said boats, manned and operated by his fishermen, fish, loiter and anchor
without permission from the Secretary of Agriculture and Commerce within three (3) kilometers from the shore line of the
Island of Corregidor over which the naval and military authorities of the United States exercise jurisdiction.
"Contrary to law.
"Cavite, Cavite, June 18, 1935."cralaw virtua1aw library
Section 28 of Administrative Order No. 2 relative to fish and game, issued by the Secretary of Agriculture and Commerce,
provides as follows:jgc:chanrobles.com.ph
"28. Prohibited fishing areas. No boats licensed in accordance with the provisions of Act No. 4003 and this order to
catch, collect, gather, take, or remove fish and other sea products from Philippine waters shall be allowed to fish, loiter, or
anchor within 3 kilometers of the sore line of islands and reservations over which jurisdiction is exercised by naval or military
authorities of the United States, particularly Corregidor, Pulo Caballo, La Monja, El Fraile, and Carabao, and all other
islands and detached rocks lying between Mariveles Reservation on the north side of the entrance to Manila Bay and
Calumpan Point Reservation on the south side of said entrance: Provided, That boats not subject to license under Act No.
4003 and this order may fish within the areas mentioned above only upon receiving written permission therefor, which
permission may be granted by the Secretary of Agriculture and Commerce upon recommendation of the military or naval
authorities concerned.
"A violation of this paragraph may be proceeded against under section 45 of the Federal Penal Code."cralaw virtua1aw
library
The above quoted provisions of Administrative Order No. 2 were issued by the then Secretary of Agriculture and Natural
Resources, now Secretary of Agriculture and Commerce, by virtue of the authority vested in him by section 4 of Act No.
4003 which reads as follows:jgc:chanrobles.com.ph
"SEC. 4. Instructions, orders, rules and regulations. The Secretary of Agriculture and Natural Resources shall from time
to time issue such instructions, orders, rules and regulations consistent with this Act, as may be necessary and proper to
carry into effect the provisions thereof and for the conduct of proceedings arising under such provisions."cralaw virtua1aw
library
The herein accused and appellee Augusto A. Santos is charged with having ordered his fishermen to manage and operate
the motor launches Malabon II and Malabon III registered in his name and to fish, loiter and anchor within three kilometers
of the shore line of the Island of Corregidor over which jurisdiction is exercised by naval and military authorities of the United
States, without permission from the Secretary of Agriculture and Commerce.
These acts constitute a violation of the conditional clause of section 28 above quoted, which reads as
follows:jgc:chanrobles.com.ph
"Provided, That boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above
(within 3 kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval and military
authorities of the United States, particularly Corregidor) only upon receiving written permission therefor, which permission
may be granted by the Secretary of Agriculture and Commerce upon recommendation of the military or naval authorities
concerned." (Within parenthesis ours.)
Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within three kilometers of the
shore line of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United
States, without permission from the Secretary of Agriculture and Commerce upon recommendation of the military and naval
authorities concerned. Inasmuch as the only authority granted to the Secretary of Agriculture and Commerce, by section 4
of Act No. 4003, is to issue from time to time such instructions, orders, rules and regulations consistent with said Act, as
may be necessary and proper to carry into effect the provisions thereof and for the conduct of proceedings arising under
such provisions; and inasmuch as said Act No. 4003, as stated, contains no provisions similar to those contained in the
above quoted conditional clause of section 28 of Administrative Order No. 2, the conditional clause in question supplies a
defect of the law, extending it. This is equivalent to legislating on the matter, a power which has not been and cannot be
delegated to him, it being exclusively reserved to the then Philippine Legislature by the Jones Law, and now to the National
Assembly by the Constitution of the Philippines. Such act constitutes not only an excess of the regulatory power conferred
upon the Secretary of Agriculture and Commerce, but also an exercise of a legislative power which he does not have, and
therefore said conditional clause is null and void and without effect (12 Corpus Juris, 845; Rubi v. Provincial Board of
Mindoro, 39 Phil., 660; U. S. v. Ang Tang Ho, 43 Phil., 1; U. S. v. Barrias, 11 Phil., 327).
For the foregoing considerations, we are of the opinion and so hold that the conditional clause of section 28 of
Administrative Order No. 2, issued by the Secretary of Agriculture and Commerce, is null and void and without effect, as
constituting an excess of the regulatory power conferred upon him by section 4 of Act No. 4003 and an exercise of a
legislative power which has not been and cannot be delegated to him.
Wherefore, inasmuch as the facts with the commission of which Augusto A. Santos is charged do not constitute a crime or a
violation of some criminal law within the jurisdiction of the civil courts, the information filed against him is dismissed, with the
costs de oficio. So ordered.

SUPREME COURT
Manila
EN BANC
G.R. No. L-60548 November 10, 1986
PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner,

vs.
HON. BENJAMIN RELOVA, in his capacity as Presiding Judge, Court of First Instance of Manila, Branch XI,
PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, CAPITOL WIRELESS, INC. and RADIO
COMMUNICATIONS OF THE PHILIPPINES, INC., respondents.
Franklin M. Drilon for petitioner.
Andres T. Velardo, Dante P. Mercado, Edgardo D. Rivera, Mila T. Federis and Celedonio P. Balasbas for respondents.
FERIA, J.:
In this petition for review on certiorari, the Philippine Global Communications, Inc., seeks to set aside the decision, dated
April 27, 1982 rendered by respondent Judge Benjamin Relova of Branch XI of the then Court of First Instance of Manila in
Civil Case No. R-82-37 21 entitled "In the Matter of the Petition for the Declaratory Judgment Regarding the Construction of
the R.A. Nos. 4617 and 4630," the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring respondent Philippine Global Communications, Inc.,
without authority to establish, maintain and operate, apart from its single principal station in Makati, any
other branch or station within the Philippines.
In view of the foregoing resolution on the main petition, the counterclaim interposed by respondent must be,
as it is hereby, DISMISSED.
At this juncture, it may not be amiss to invite attention to our decision in the case of Metropolitan Waterworks and Sewerage
System vs. The Court of Appeals and City of Dagupan, G.R. No. L-54526 promulgated on August 25, 1986, which pointed
out the common error of joining the court or judge who rendered the decision appealed from as a party respondent in an
appeal by certiorari to this Court under Rule 45 of the Rules of Court; when correctly the only parties in an appeal by
certiorari are the appellant as petitioner and the appellee as respondent: and it is in the special civil action of certiorari under
Section 5 of Rule 65 of the Rules of Court where the court or judge is required to be joined as a party defendant or
respondent.
The antecedent facts in this case are briefly as follows:
On May 10, 1976, petitioner filed with the Board of Communications (BOC), now the National Telecommunications
Commission, an application for authority to establish a branch station in Cebu City for the purpose of rendering international
telecommunication services from Cebu City to any point outside the Philippines where it is authorized to operate. Said
application was opposed by private respondents.
Meanwhile, on March 24, 1977, while petitioner's application was pending, the BOC issued Memorandum Circular No. 77-
13 designating the Metropolitan Manila area as the sole gateway" (point of entrance into or exit from) for communications in
the Philippines and defining what constitutes "domestic record operations.
On January 16, 1979, the BOC granted petitioner provisional authority to establish a station in Cebu City "subject to the
condition that as soon as domestic carriers shall have upgraded their facilities, applicant shall cease its operation and
interface with domestic carriers. " Then, on May 24, 1979, the BOC granted petitioner final authority to establish a
"branch/station" in Cebu City and, subject to its prior approval, anywhere in the Philippines. Respondents filed a joint motion
for reconsideration of said decision.
On August 27, 1979, pending resolution of the joint motion for reconsideration, private respondents filed with the lower court
a petition for declaratory judgment regarding the proper construction of petitioner's franchise, R.A. No. 4617. Petitioner
moved to dismiss the petition but said motion was denied. Petitioner then assailed the aforesaid order on the ground of lack
of jurisdiction, but this Court sustained the lower court and held that the suit for declaratory relief fell within the competence
of the Judiciary and did not require prior action by the administrative agency concerned under the concept of primary
jurisdiction. (G.R. No. L-52819, October 2, 1980, 100 SCRA 254)
After the issues were joined, the parties at the pre-trial conference agreed to submit the case for decision on the bases of
their respective pleadings and memoranda because the issues involved are legal. On April 27, 1982, the lower court
rendered the judgment above quoted. Hence, this petition.
The legal issues raised in this petition are as follows: (1) Whether or not petitioner is authorized under its legislative
franchise, Republic Act No. 4617, to establish stations or substations in places or points outside Metropolitan Manila; and
(2) Whether or not the establishment of such stations or substations constitutes "domestic service" within the terms of
petitioner's legislative franchise.
In its Second Supplemental Memorandum filed on July 16, 1984, petitioner belatedly claims that the declaratory judgment
was improperly made, as it was based on the pleadings alone, although the declaratory relief petition presented genuine
issues of fact that required trial. Considering, however, the above-stated agreement of the parties to submit the case for
decision on the basis of their respective pleadings and memoranda (petitioner's brief, p. 14 and respondents' brief, p. 12),
the lower court could not be faulted for rendering judgment accordingly.
However, we rule that the lower court erred in rendering the decision appealed from, inasmuch as the same is contrary to
the provisions of petitioner's legislative franchise (R.A. No. 4617) as well as the contemporaneous construction placed upon
it by the governmental agency charged with its enforcement and the opinion of the former Secretary of Justice.
Section 1 of petitioner's franchise provides:
Section 1. There is hereby granted to the RCA Communications Inc., hereinafter referred to as the
Grantee, the right and the privelege of constructing, maintaining and operating communications system by
radio wire, satellites, and other means now known to science or which in the future may be developed for
the reception and transmission of messages between any point in the Philippines to points exterior thereto,
including airplanes, airships or vessels even though such airplanes, airships or vessels, may be located
within the territorial limits of the Philippines.
RCA Communications, Inc. was subsequently renamed Philippine Global Communications, Inc., herein petitioner.
It is always timely to reiterate that: "the first and fundamental duty of courts, in our judgment, is to apply the law.
Construction and interpretation come only after it has been demonstrated that application is impossible or inadequate
without them. "(Lizarraga Hermanos vs. Yap Tico, 24 Phil. 504, 513; Republic Flour Mills, Inc. vs. Commissioner of
Customs, 39 SCRA 269)
Moreover, legislative intent must be ascertained from a consideration of the statute as a whole. As the Court reiterated in
the case of Aisporna vs. Court of Appeals:
... The particular words, clauses and phrases should not be studied as detached and isolated expressions,
but the whole and every part of the statute must be considered in fixing the meaning of any of its parts and
in order to produce harmonious whole. (Araneta vs. Concepcion, 99 Phil. 709; Tamayo vs. Gsell, 35 Phil.
953; Lopez vs. El Hogar Filipino, 47 Phil. 249; Chartered Bank vs. Imperial, 48 Phil 931) A statute must be
so construed as to harmonize and give effect to all its provisions whenever possible. (People vs. Polmon,
86 Phil; 350) (113 SCRA 459,466; April 12, 1982)
The lower court held that the word "any" in the abovequoted Section 1 of the law means a single point within the Philippines
where petitioner at its choice, subject to approval by the proper governmental agency, can establish and maintain a
reception and communication station or system. It also held that the establishment, maintenance and operation of franchise
or stations anywhere in the Philippines or even within Metropolitan Manila outside or apart from petitioner's principal or main
station in Makati constitute "domestic communication service" in violation of Section 17 of said law.
However, a reading of other sections of the law aside from Sections 1 and 17 cited by the lower court would lead to no other
conclusion than that said law authorizes petitioner to construct, maintain and operate, apart from its principal station in
Makati, other stations or branches within the Philippines for purposes of its international communications operations.
Section 3 of the law provides that "for the purpose of carrying out the privilege granted herein, the grantee may
establish stations in such places in the Philippines as the grantee may select and the Secretary of Public Works and
Communications may approve.
Section 4 (a) provides that "the Secretary of Public Works and Communications shall have the power to allot to the grantee
the frequencies and wave lengths to be used thereunder and determine the stations to and from which each such frequency
and wave lengths may be used, and issue to the grantee a license for such use. "
Section 6 provides that "a special right is reserved to the Government of the Republic of the Philippines, in time of war,
insurrection, or domestic trouble, to take over and operate the said stations upon the order and direction of any authorized
department of the Government of the Philippines, such department to compensate the grantee for the use of
said stations during the period when they shall be so operated by the said Government. "
Section 9 provides that "the grantee shall hold the national, provincial, and municipal governments of the Philippines,
harmless from all claims, accounts, demands, or actions arising out of accidents or injuries, whether the property or to
persons, caused by the construction or operation of the stations of the grantee."
With respect to the principle of contemporaneous construction of a statute by the executive officers of the government
whose duty it is to execute it, it is well to reiterate that:
... As far back as In re Allen, (2 Phil. 630) a 1903 decision, Justice McDonough, as ponente, cited this
excerpt from the leading American case of Pennoyer v. McConnaughy, decided in 1891: "The principle that
the contemporaneous construction of a statute by the executive officers of the government, whose duty it is
to execute it, is entitled to great respect, and should ordinarily control the construction of the statute by the
courts, is so firmly embedded in our jurisprudence that no authorities need be cited to support it.' (Ibid, 640.
Pennoyer v. McConnaughly is cited in 140 US 1. The excerpt is on p. 23 thereof. Cf. Government v.
Municipality of Binalonan, 32 Phil, 634 [1915]) There was a paraphrase by Justice Malcolm of such a
pronouncement in Molina v. Rafferty, (37 Phil. 545) a 1918 decision:" Courts will and should respect the
contemporaneous construction placed upon a statute by the executive officers whose duty it is to enforce it,
and unless such interpretation is clearly erroneous will ordinarily be controlled thereby. (Ibid, 555) Since
then, such a doctrine has been reiterated in numerous decisions. (Cases cited) (Philippine Association of
Free Labor Unions [PAFLU] vs. Bureau of Labor Relations, August 21, 1976, 72 SCRA 396, 402)
In its decision of May 24, 1979 granting petitioner final authority to establish a branch/station in Cebu City, the BOC
construed the legislative franchise of petitioner, as follows:
It was the earlier contention of this Board when it issued Memorandum Circular No. 77-13 (See incl. 1 of
said Circular) that no international record carrier could establish stations in any point of the country, for
purposes of carrying out its international record operations except in Metropolitan Manila Area. However, a
careful review and deliberation on the stand taken by the applicant herein as discussed in position paper it
submitted to the Board on February 21, 1978 and a cursory review of the individual franchises of each
international carrier as well as of an earlier opinion expressed by the Secretary of Justice to the Chairman
of the defunct Radio Control Board has convinced the board that by virtue of applicant's franchise,
Memorandum Circular No. 77-13 is not violated by authorizing applicant to establish a branch station in
Cebu City solely for its international record operations. In view thereof and in the interest of continued
efficient, adequate and satisfactory services, the Board of Communications hereby makes final the
provisional authority granted to applicant herein on January 16, 1979 not only on the grounds stated in said
Order but also for reasons that subject to the approval of this Board, applicant may establish branch
stations in any point within the country for the purpose of receiving and transmitting messages to countries
outside the Philippines where it is authorized to render international telecommunications services in
accordance with its franchise and Memorandum Circular No. 77-13. Metropolitan Manila remains to be the
'sole' gateway; hence, all messages received and transmitted in the course of a carrier's international
record carrier operation, must be coursed through said gateway.
The earlier opinion of the Secretary of Justice referred to in said decision was the opinion rendered by Secretary of Justice
Pedro Tuason on June 17, 1954 (Opinion No. 146), on the interpretation to be given to the clause found in Section 1 of the
original franchise granted to the predecessor-in-interest of Globe-Mackay Cable and Radio Corporation (Act No. 3495
approved on December 8, 1928, as amended by Act No. 3692 and Republic Act No. 4630). Globe-Mackay Cable and Radio
Corporation was originally one of the respondents in the Petition for Declaratory Judgment, but it was subsequently dropped
as a party respondent. The clause in question reads:
The sending of commercial wireless telegraphic messages from points within the Philippine Islands to
points exterior thereto, including airplanes, airships, and vessels, even though such airplanes, airships, or
vessels be located within the territorial limits of the Philippine Islands, and the receiving of commercial
wireless messages from such exterior points.
This clause is similar to that found in Section 1 of Republic Act No. 4630, approved on June 19, 1965, which is Identical to
Section 1 of Republic Act No. 4617 except as to the name of the grantee.
The opinion of the Secretary of Justice states:
... In Opinion No. 76 the view taken was that a message, to fall within the purview of the franchise, once
sent by a transmitter within the Philippines, cannot be received by any station within the Philippines even
for the purpose of retransmitting such message to points outside the Philippines. I believe that the
interpretation given to the above-quoted clause was too strict and does not conform with the spirit of said
provision. I take the view that the franchise has reference to the destination of the message and not to the
manner of transmittal. Not as to whether it should be sent to the point of destination directly or through
relays. The reservation in favor of the Philippine Government under section 4 of the franchise of "all wire-
less communications between points of stations within the Philippine Islands' is clearly intended to refer
only to domestic communications.
It should be understood, however, that no extra fees or tolls could be collected for the transmittal of
messages from a relay station to the principal station in Manila. For to do so would make it a domestic
service and would bring such service in competition with the domestic radio and telegraph service of the
Bureau of Posts.
The above-quoted opinion was reiterated and reaffirmed by the Undersecretary of Justice on November 28, 1973, in answer
to the query of the Acting Chairman of the Foreign Trade Zone Authority as to whether or not Globe-Mackay Cable and
Radio Corporation is "authorized under its franchise to set a relay station inside the Foreign Trade Zone in Mariveles,
Bataan, which will receive interstate communications for onward transmission by its main station in Manila.
The above-stated opinions of the Secretary of Justice and Undersecretary of Justice are material because Republic Acts
Nos. 4630 and 4617 are in pari materia. As the Court has reiterated:
Statutes are said to be in pari materia when they relate to the same person or thing, or to the same class of
persons or things, or have the same purpose or object. (Sutherland Statutory Construction, Vol. 11, pp.
535-536) When statutes are in pari materia; the rule of statutory construction dictates that they should be
construed together. (Black on Interpretation of Laws, Sec. 106) ... (City of Naga vs. Agna, May 31, 1976, 71
SCRA 176, 184)
Finally, on October 25, 1983, the National Telecommunications Commission, with the approval of the Ministry of
Transportation and Communications, issued Memorandum Circular No. 08-8-83 which adopted guidelines in the
implementation of the government policy of designating Metropolitan Manila as the international gateway for purposes of
domestic and international communications operations. Among the provisions of said Memorandum Circular which are
pertinent to the case at bar are the following:
1.1. The International Record Carriers (IRCs) shall continue to own, construct and expand, as may be
required by the service, their own stations, inside plant, branches and terminals within the Metro Manila
Area necessary for them to conduct their business of providing international telecommunications service in
the country in accordance with their respective franchise and as authorized by the appropriate government
regulatory agency.
xxx xxx xxx
2.1 The IRCs shall not maintain public offices outside the gateway. They may, however, be allowed to
establish customer terminals with the necessary marketing and technical support outside Metro Manila. ...
xxx xxx xxx
2.3. International telecommunications requirements of non- equipped or walk-in customers shall be served
thru the public offices of the domestic record carrier/s (DRCs). All existing public offices of IRCs may
continue operating until such time as the DRC(s) can provide the facilities required by the IRCs or an
Interconnect Agree- ment between the IRC(s) and DRC(s) shall have been duly approved by NTC.
The last-quoted provision confirms that the existing public offices of International Record Carriers were duly authorized by
their respective legislative franchises.
WHEREFORE, the decision appealed from is reversed and judgment is hereby rendered declaring petitioner with authority
to establish, maintain and operate, in accordance with its franchise and Memorandum Circular No. 08-8-83, any other
branch or station within the Philippines apart from its single principal station in Makati, Metro Manila.
SO ORDERED.

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Republic of the Philippines

G.R. No. 108310 September 1, 1994

RUFINO O. ESLAO, in his capacity as President of Pangasinan State University, petitioner,

Mehol K. Sadain for petitioner.

We consider the Petition meritorious.

Sec. 2.1 of CPG No. 80-4 defines "special project" as

an inter-agency or inter-committee activity or an undertaking by a composite group of officials/employees

Chairman : Undersecretary for Planning,

Co-Chairman : Vice-President for Research

Members : Director of FMB

OBLIGATIONS OF THE PARTIES

The DENR shall have the following obligations:

xxx xxx xxx

Obligations of the PSU:

The PSU shall have the following obligations:

We are unable to agree with respondent COA.

prescribe/authorize the classification and compensation rates of positions in foreign-assisted

(c) the clarification issued by the DBM stating that

Even in its Comment respondent COA submits that

The "Duration of Work" clause of the MOA provides that

The DENR shall have the following obligations:

Expert of Service Rate/ Total

1. Ecologist 4 P5,000 P20,000

2. Silviculturist 3 -do- 15,000

4. Soils Expert 2 -do- 10,000

5. Social Forestry Expert 4 -do- 20,000

6. Management Expert 2 -do- 10,000

7. Horticulturist 2 -do- 10,000

8. Agricultural Engineer 2 -do- 10,000

9. Systems Analysts/Programer 2 -do- 10,000

10. Statistician 2 -do- 10,000

11. Shoreline Resources Expert 2 -do- 10,000

12. Animal Science Specialist 2 -do- 10,000

13. Policy/Administrative 4 -do- 20,000

Research Associates (2) P8,000

In addition, the Proposal already provided a list of identified experts:

1. Dr. Victorino P. Espero Enviromental Science

On the other hand, NCC No. 53 provides:

xxx xxx xxx

xxx xxx xxx

xxx xxx xxx

A. Position Level Project Manager/Project

B. Position Level Assistant Project

C. Position Level Project Consultant

D. Position Level Supervisor/Senior Staff

E. Position Level Staff Member

Administrative and Clerical Support

A. Position Level Administrative Assistant

B. Position Level Administrative Support

1. Dr. Rufino O. Eslao Policy/Admi- 4 P2,000 P8,000 nistrative

* Project Manager/ Project Director

B. For Support Staff

1 Henedina M. Tantoco Research 4 700 2,800

* Per Attachment to DBM Clarification dated 10

[G.R. No. 119761. August 29, 1996]

"BRAND AD VALOREM TAX RATE

Hope Luxury M. 100's

"SEC. 142. Cigars and Cigarettes. -

REVENUE MEMORANDUM CIRCULAR NO. 37-93

SUBJECT : Reclassification of Cigarettes Subject to Excise Tax

TO : All Internal Revenue Officers and Others Concerned.

"Any ruling inconsistent herewith is revoked or modified accordingly.

(SGD) LIWAYWAY VINZONS-CHATO

"(3) In case of opposition, the rules on contested cases shall be observed.