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epublic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 88211 October 27, 1989

FERDINAND E. MARCOS, IMELDA R. MARCOS, FERDINAND R. MARCOS. JR.,


IRENE M. ARANETA, IMEE M. MANOTOC, TOMAS MANOTOC, GREGORIO
ARANETA, PACIFICO E. MARCOS, NICANOR YIGUEZ and PHILIPPINE
CONSTITUTION ASSOCIATION (PHILCONSA), represented by its President,
CONRADO F. ESTRELLA, petitioners,
vs.
HONORABLE RAUL MANGLAPUS, CATALINO MACARAIG, SEDFREY ORDOEZ,
MIRIAM DEFENSOR SANTIAGO, FIDEL RAMOS, RENATO DE VILLA, in their
capacity as Secretary of Foreign Affairs, Executive Secretary, Secretary of
Justice, Immigration Commissioner, Secretary of National Defense and Chief of
Staff, respectively, respondents.

RESOLUTION

EN BANC:

In its decision dated September 15,1989, the Court, by a vote of eight (8) to seven (7),
dismissed the petition, after finding that the President did not act arbitrarily or with grave
abuse of discretion in determining that the return of former President Marcos and his
family at the present time and under present circumstances pose a threat to national
interest and welfare and in prohibiting their return to the Philippines. On September 28,
1989, former President Marcos died in Honolulu, Hawaii. In a statement, President
Aquino said:

In the interest of the safety of those who will take the death of Mr. Marcos
in widely and passionately conflicting ways, and for the tranquility of the
state and order of society, the remains of Ferdinand E. Marcos will not be
allowed to be brought to our country until such time as the government, be
it under this administration or the succeeding one, shall otherwise decide.
[Motion for Reconsideration, p. 1; Rollo, p, 443.]

On October 2, 1989, a Motion for Reconsideration was filed by petitioners, raising the
following major arguments:

1. to bar former President Marcos and his family from returning to the Philippines is to
deny them not only the inherent right of citizens to return to their country of birth but also
the protection of the Constitution and all of the rights guaranteed to Filipinos under the
Constitution;

2. the President has no power to bar a Filipino from his own country; if she has, she had
exercised it arbitrarily; and

3. there is no basis for barring the return of the family of former President Marcos. Thus,
petitioners prayed that the Court reconsider its decision, order respondents to issue the
necessary travel documents to enable Mrs. Imelda R. Marcos, Ferdinand R. Marcos,
Jr., Irene M. Araneta, Imee M. Manotoc, Tommy Manotoc and Gregorio Araneta to
return to the Philippines, and enjoin respondents from implementing President Aquino's
decision to bar the return of the remains of Mr. Marcos, and the other petitioners, to the
Philippines.

Commenting on the motion for reconsideration, the Solicitor General argued that the
motion for reconsideration is moot and academic as to the deceased Mr. Marcos.
Moreover, he asserts that "the 'formal' rights being invoked by the Marcoses under the
label 'right to return', including the label 'return of Marcos' remains, is in reality or
substance a 'right' to destabilize the country, a 'right' to hide the Marcoses' incessant
shadowy orchestrated efforts at destabilization." [Comment, p. 29.] Thus, he prays that
the Motion for Reconsideration be denied for lack of merit.

We deny the motion for reconsideration.

1. It must be emphasized that as in all motions for reconsideration, the burden is upon
the movants, petitioner herein, to show that there are compelling reasons to reconsider
the decision of the Court.

2. After a thorough consideration of the matters raised in the motion for reconsideration,
the Court is of the view that no compelling reasons have been established by petitioners
to warrant a reconsideration of the Court's decision.

The death of Mr. Marcos, although it may be viewed as a supervening event, has not
changed the factual scenario under which the Court's decision was rendered. The
threats to the government, to which the return of the Marcoses has been viewed to
provide a catalytic effect, have not been shown to have ceased. On the contrary,
instead of erasing fears as to the destabilization that will be caused by the return of the
Marcoses, Mrs. Marcos reinforced the basis for the decision to bar their return when she
called President Aquino "illegal," claiming that it is Mr. Marcos, not Mrs. Aquino, who is
the "legal" President of the Philippines, and declared that the matter "should be brought
to all the courts of the world." [Comment, p. 1; Philippine Star, October 4, 1989.]

3. Contrary to petitioners' view, it cannot be denied that the President, upon whom
executive power is vested, has unstated residual powers which are implied from the
grant of executive power and which are necessary for her to comply with her duties
under the Constitution. The powers of the President are not limited to what are
expressly enumerated in the article on the Executive Department and in scattered
provisions of the Constitution. This is so, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the powers of the President
as a reaction to the abuses under the regime of Mr. Marcos, for the result was a
limitation of specific power of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the general grant of executive
power.

That the President has powers other than those expressly stated in the Constitution is
nothing new. This is recognized under the U.S. Constitution from which we have
patterned the distribution of governmental powers among three (3) separate branches.

Article II, [section] 1, provides that "The Executive Power shall be vested
in a President of the United States of America." In Alexander Hamilton's
widely accepted view, this statement cannot be read as mere shorthand
for the specific executive authorizations that follow it in [sections] 2 and 3.
Hamilton stressed the difference between the sweeping language of
article II, section 1, and the conditional language of article I, [section] 1:
"All legislative Powers herein granted shall be vested in a Congress of the
United States . . ." Hamilton submitted that "[t]he [article III enumeration [in
sections 2 and 31 ought therefore to be considered, as intended merely to
specify the principal articles implied in the definition of execution power;
leaving the rest to flow from the general grant of that power, interpreted in
confomity with other parts of the Constitution...

In Myers v. United States, the Supreme Court accepted Hamilton's


proposition, concluding that the federal executive, unlike the Congress,
could exercise power from sources not enumerated, so long as not
forbidden by the constitutional text: the executive power was given in
general terms, strengthened by specific terms where emphasis was
regarded as appropriate, and was limited by direct expressions where
limitation was needed. . ." The language of Chief Justice Taft in Myers
makes clear that the constitutional concept of inherent power is not a
synonym for power without limit; rather, the concept suggests only that not
all powers granted in the Constitution are themselves exhausted by
internal enumeration, so that, within a sphere properly regarded as one of
"executive' power, authority is implied unless there or elsewhere expressly
limited. [TRIBE, AMERICAN CONSTITUTIONAL LAW 158-159 (1978).]

And neither can we subscribe to the view that a recognition of the President's implied or
residual powers is tantamount to setting the stage for another dictatorship. Despite
petitioners' strained analogy, the residual powers of the President under the Constitution
should not be confused with the power of the President under the 1973 Constitution to
legislate pursuant to Amendment No. 6 which provides:
Whenever in the judgment of the President (Prime Minister), there exists a
grave emergency or a threat or imminence thereof, or whenever the
interim Batasang Pambansa or the regular National Assembly fails or is
unable to act adequately on any matter for any reason that in his judgment
requires immediate action, he may, in order to meet the exigency, issue
the necessary decrees, orders, or letters of instruction, which shall form
part of the law of the land,

There is no similarity between the residual powers of the President under the 1987
Constitution and the power of the President under the 1973 Constitution pursuant to
Amendment No. 6. First of all, Amendment No. 6 refers to an express grant of power. It
is not implied. Then, Amendment No. 6 refers to a grant to the President of the specific
power of legislation.

4. Among the duties of the President under the Constitution, in compliance with his (or
her) oath of office, is to protect and promote the interest and welfare of the people. Her
decision to bar the return of the Marcoses and subsequently, the remains of Mr. Marcos
at the present time and under present circumstances is in compliance with this bounden
duty. In the absence of a clear showing that she had acted with arbitrariness or with
grave abuse of discretion in arriving at this decision, the Court will not enjoin the
implementation of this decision.

ACCORDINGLY, the Court resolved to DENY the Motion for Reconsideration for lack of
merit."

Separate Opinions

CRUZ, J., dissenting:

Nothing important has happened to change my vote for granting the petition.
The death of Marcos has not plunged the nation into paroxysms of grief as the
so-called "loyalists" had hoped. By and large, it has been met with only
passing interest if not outright indifference from the people. Clearly, the
discredited dictator is in death no El Cid. Marcos dead is only an unpleasant
memory, not a bolt of lightning to whip the blood.

This only shows that if he was at all a threat to the national security when he
was already moribund that feeble threat has died with him. As the government
stresses, he has been reduced to a non-person (which makes me wonder why
it is still afraid of him). His cadaver is not even regarded as a symbol of this or
that or whatever except by his fanatical followers. It is only a dead body
waiting to be interred in this country.

This is a tempest in a teapot. We have more important things to do than


debating over a corpse that deserves no kinder fate than dissolution and
oblivion. I say let it be brought home and buried deep and let us be done with
it forever.

PARAS, J., dissenting on the Motion for Reconsideration:

I find no reason to deviate from the dissenting opinion I have already


expressed.

Firstly, the former President, although already dead, is still entitled to certain
rights. It is not correct to say that a dead man, since he is no longer a human
being, has ceased to have rights. For instance, our Revised Penal Code
prohibits the commission of libel against a deceased individual. And even if
we were to assume the non- existence anymore of his human rights what
about the human rights of his widow and the other members of his family?

Secondly, up to now, the alleged threats to national security have remained


unproved and consequently, unpersuasive. Our Armed Forces can easily
control any possible uprising or political and military destabilization. In fact, the
converse appears to be nearer the truth, that is, if we do not allow the remains
to come, more trouble may be expected.

Thirdly, reconciliation can proceed at a much faster pace if the petition for the
return is granted. To refuse the request can mean a hardening of resistance
against the well-intentioned aim of the administration. Upon the other hand, to
grant the petition may well soften the hearts of the oppositionists; paving the
way for a united citizenry.

Finally, the entire world will surely applaud our government's act of mercy. As
Shakespeare once wrote "the quality of mercy is not strained." Surely,
compassion is the better part of government. Remove mercy, and you remove
the best reason against civil strife, which if not abated can turn our country
into a mainstream of fiery dissent and in the end, as one great man has put it,
the question will no longer be what is right, but what is left.

PADILLA, J., dissenting:


The death of former President Ferdinand E. Marcos, which supervened after
decision in this case had been rendered, was pre-empted and foreseen in my
original dissenting opinion. There I said that the first cogent and decisive
proposition in this case is that "Mr. Marcos is a Filipino and, as such, entitled
to return to, die and be buried in this country." I have only to add a few
statements to that dissenting opinion.

Respondents have succeeded in denying Mr. Marcos the first two (2) rights,
i.e. to return to and die in this country, The remaining right of this Filipino that
cries out for vindication at this late hour is the right to be buried in this country.
Will the respondents be allowed to complete the circle of denying the
constitutional and human right of Mr. Marcos to travel which, as stated in my
dissenting opinion, includes the right to return to, die and be buried in this
country? The answer should be in the negative if the Constitution is to still
prevail; the answer should be in the negative if we are to avoid the completely
indefensible act of denying a Filipino the last right to blend his mortal remains
with a few square feet of earth in the treasured land of his birth.

Those who would deny this Filipino the only constitutional and human right
that can be accorded him now say that the constitutional and human right to
be buried in this country would apply to any Filipino, except Mr. Marcos,
because he was a dictator and he plundered the country. This is the most
irrelevant argument that can be raised at this time. For, our democracy is built
on the fundamental assumption (so we believe) that the Constitution and all its
guarantees apply to all Filipinos, whether dictator or pauper, learned or
ignorant, religious or agnostic as long as he is a Filipino.

It is said that to accord this Filipino the right to be buried in this country would
pose a serious threat to national security and public safety. What threat? As
pointed out in my dissenting opinion, the second cogent and decisive
proposition in this case is that respondents have not presented any "hard
evidence" (factual bases) or convincing proof of such threat. "All we have are
general conclusions of national security and public safety' in avoidance of a
specific, demandable and enforceable constitutional and basic human right to
return." Recent events have, to my mind, served to confirm the validity of such
dissenting statement.

If a live Marcos returning to this country did not pose a serious threat to
national security, the situation cannot be any worse with a dead Marcos
returning. For, a dead Marcos will return to be buried into mother earth, where
there are no protests, "demos", or even dissents, where the rule that reigns, in
the language of Mr. Justice Jackson in Barnette is the "unanimity of the
graveyard."

It is said that, while a dead Marcos has been rendered impotent to threaten
national security, his supporters would pose that threat to national security.
This argument is untenable as it is without merit. As I see it, Marcos'
supporters pose a greater threat to peace and order, with Marcos deprived of
his right to burial in this country. On the other hand, if the remains of Mr.
Marcos are brought to the country and allowed the burial to which he is
constitutionally and humanly entitled, Marcos' supporters would be deprived of
an otherwise potent argumentso conducive to mass protests and even
violencethat their Idol has been cruelly denied the right to be buried in his
homeland.

It is also said that Mr. Marcos, in cadaver form, has no constitutional or human
rights, to speak of. This contention entirely begs the issue. In the first place,
one cannot overlook that the right of Mr. Marcos, as a Filipino, to be buried in
this country, is asserted not for the first time after his death. It was vigorously
asserted long before his death. But, more importantly, the right of every
Filipino to be buried in his country, is part of a continuing right that starts from
birth and ends only on the day he is finally laid to rest in his country.

This dissenting opinion does not pretend to deny the Philippine government
the right to lay down conditions for the burial of Mr. Marcos in this country, but
I submit that these conditions must, as a fundamental postulate, recognize the
right of the man, as a Filipino, to be buried in this country NOW.

The majority resolution, in effect, bans Mr. Marcos' burial in this country now.
Without in any way affecting my respect and regard for my brethren and
sisters in the majority, I am deeply concerned and greatly disturbed that, with
their decision banning a dead Marcos from burial in this country, they have
passed an opportunity to defuse a constitutional crisis that, in my humble
assessment, threatens to ignite an already divided nation, Regrettably, they
have ignored the constitutional dimension of the problem rooted in the ageless
and finest tradition of our people for respect and deference to the dead. What
predictably follows will be a continuing strife, among our people, of unending
hatred, recriminations and retaliations. God save this country!

My vote is for this Court to ORDER the respondents to allow the immediate
return and burial in the Republic of the Philippines of former President
Ferdinand E. Marcos, subject to such conditions as the Philippine government
may impose in the interest of peace and order.
SARMIENTO, J., Dissenting:

The case has curious trappings of a deja vu, the shoe being on the other foot,
yet, as I stated before, I can not allow personal emotions to soften my
"hardened impartiality" and deny, as a consequence, the rights of the ex-
President's bereaved to bury his remains in his homeland, and for them to
return from exile. As I had, then, voted to grant the petition, so do I vote to
grant reconsideration.

I have gone to lengths to locate in the four comers of the Constitution, by


direct grant or by implication, the President's supposed "residual" power to
forbid citizens from entering the motherland reiterated in the resolution of the
majority. I have found none. I am not agreed, that:

3. Contrary to petitioners view, it cannot be denied that the


President, upon whom executive power is vested, has unstated
residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties
under the Constitution. The powers of the President are not
limited to what are expressly enumerated in the article on the
Executive Department and in scattered provisions of the
Constitution. This, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the
powers of the President as a reaction to the abuses under the
regime of Mr. Marcos, for the result was a limitation of specific
powers of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the general
grant of executive power.

It is a nice word game, but it is nothing else. For, if the Constitution has
imposed limitations on specific powers of the President, it has, a fortiori,
prescribed a diminution of executive power. The Charter says that the right
may only be restricted by: (1) a court order; or (2) by fiat of law. Had the
fundamental law intended a presidential imprimatur, it would have said so. It
would have also completed the symmetry: judicial, congressional, and
executive restraints on the right. No amount of presumed residual executive
power can amend the Charter.

It is well to note that the Bill of Rights stands primarily, a limitation not only
against legislative encroachments on individual liberties, but more so, against
presidential intrusions. And especially so, because the President is the
caretaker of the military establishment that has, several times over, been
unkind to part of the population it has also sworn to protect.

That "[t]he threats to the government, to which the return of the Marcoses has
been viewed to provide a catalytic effect, have not been shown to have
ceased" (Res., 3) is the realm of conjecture, speculation, and imagination. The
military has shown no hard evidence that "the return of the Marcoses" would
indeed interpose a threat to national security. And apparently, the majority
itself is not convinced ("has been viewed...").

That Mrs. Marcos has referred to President Corazon Aquino as an illegitimate


President, does not, so I submit, reinforce alleged fears of a massive
destabilization awaiting the nation. The military has said over and over that
Marcos followers are not capable of successful destabilization effort. And only
this morning (October 27, 1989), media reported the assurances given to
foreign investors by no less than the President, of the political and economic
stability of the nation, as well as the Government's capability to quell forces
that menace the gains of EDSA.

I have no eulogies to say on the passing of Mr. Marcos. My personal


impressions, however, are beside the point. I reiterate that the President has
no power to deny requests of Marcos relatives to bury Marcos in his
homeland. As for the former, let them get their just deserts here too. And let
the matter rest.

Separate Opinions

CRUZ, J., dissenting:

Nothing important has happened to change my vote for granting the petition.
The death of Marcos has not plunged the nation into paroxysms of grief as the
so-called "loyalists" had hoped. By and large, it has been met with only
passing interest if not outright indifference from the people. Clearly, the
discredited dictator is in death no El Cid. Marcos dead is only an unpleasant
memory, not a bolt of lightning to whip the blood.

This only shows that if he was at all a threat to the national security when he
was already moribund that feeble threat has died with him. As the government
stresses, he has been reduced to a non-person (which makes me wonder why
it is still afraid of him). His cadaver is not even regarded as a symbol of this or
that or whatever except by his fanatical followers. It is only a dead body
waiting to be interred in this country.
This is a tempest in a teapot. We have more important things to do than
debating over a corpse that deserves no kinder fate than dissolution and
oblivion. I say let it be brought home and buried deep and let us be done with
it forever.

PARAS, J., dissenting on the Motion for Reconsideration:

I find no reason to deviate from the dissenting opinion I have already


expressed.

Firstly, the former President, although already dead, is still entitled to certain
rights. It is not correct to say that a dead man, since he is no longer a human
being, has ceased to have rights. For instance, our Revised Penal Code
prohibits the commission of libel against a deceased individual. And even if
we were to assume the non- existence anymore of his human rights what
about the human rights of his widow and the other members of his family?

Secondly, up to now, the alleged threats to national security have remained


unproved and consequently, unpersuasive. Our Armed Forces can easily
control any possible uprising or political and military destabilization. In fact, the
converse appears to be nearer the truth, that is, if we do not allow the remains
to come, more trouble may be expected.

Thirdly, reconciliation can proceed at a much faster pace if the petition for the
return is granted. To refuse the request can mean a hardening of resistance
against the well-intentioned aim of the administration. Upon the other hand, to
grant the petition may well soften the hearts of the oppositionists; paving the
way for a united citizenry.

Finally, the entire world will surely applaud our government's act of mercy. As
Shakespeare once wrote "the quality of mercy is not strained." Surely,
compassion is the better part of government. Remove mercy, and you remove
the best reason against civil strife, which if not abated can turn our country
into a mainstream of fiery dissent and in the end, as one great man has put it,
the question will no longer be what is right, but what is left.

PADILLA, J., dissenting:

The death of former President Ferdinand E. Marcos, which supervened after


decision in this case had been rendered, was pre-empted and foreseen in my
original dissenting opinion. There I said that the first cogent and decisive
proposition in this case is that "Mr. Marcos is a Filipino and, as such, entitled
to return to, die and be buried in this country." I have only to add a few
statements to that dissenting opinion.

Respondents have succeeded in denying Mr. Marcos the first two (2) rights,
i.e. to return to and die in this country, The remaining right of this Filipino that
cries out for vindication at this late hour is the right to be buried in this country.
Will the respondents be allowed to complete the circle of denying the
constitutional and human right of Mr. Marcos to travel which, as stated in my
dissenting opinion, includes the right to return to, die and be buried in this
country? The answer should be in the negative if the Constitution is to still
prevail; the answer should be in the negative if we are to avoid the completely
indefensible act of denying a Filipino the last right to blend his mortal remains
with a few square feet of earth in the treasured land of his birth.

Those who would deny this Filipino the only constitutional and human right
that can be accorded him now say that the constitutional and human right to
be buried in this country would apply to any Filipino, except Mr. Marcos,
because he was a dictator and he plundered the country. This is the most
irrelevant argument that can be raised at this time. For, our democracy is built
on the fundamental assumption (so we believe) that the Constitution and all its
guarantees apply to all Filipinos, whether dictator or pauper, learned or
ignorant, religious or agnostic as long as he is a Filipino.

It is said that to accord this Filipino the right to be buried in this country would
pose a serious threat to national security and public safety. What threat? As
pointed out in my dissenting opinion, the second cogent and decisive
proposition in this case is that respondents have not presented any "hard
evidence" (factual bases) or convincing proof of such threat. "All we have are
general conclusions of national security and public safety' in avoidance of a
specific, demandable and enforceable constitutional and basic human right to
return." Recent events have, to my mind, served to confirm the validity of such
dissenting statement.

If a live Marcos returning to this country did not pose a serious threat to
national security, the situation cannot be any worse with a dead Marcos
returning. For, a dead Marcos will return to be buried into mother earth, where
there are no protests, "demos", or even dissents, where the rule that reigns, in
the language of Mr. Justice Jackson in Barnette is the "unanimity of the
graveyard."

It is said that, while a dead Marcos has been rendered impotent to threaten
national security, his supporters would pose that threat to national security.
This argument is untenable as it is without merit. As I see it, Marcos'
supporters pose a greater threat to peace and order, with Marcos deprived of
his right to burial in this country. On the other hand, if the remains of Mr.
Marcos are brought to the country and allowed the burial to which he is
constitutionally and humanly entitled, Marcos' supporters would be deprived of
an otherwise potent argumentso conducive to mass protests and even
violencethat their Idol has been cruelly denied the right to be buried in his
homeland.

It is also said that Mr. Marcos, in cadaver form, has no constitutional or human
rights, to speak of. This contention entirely begs the issue. In the first place,
one cannot overlook that the right of Mr. Marcos, as a Filipino, to be buried in
this country, is asserted not for the first time after his death. It was vigorously
asserted long before his death. But, more importantly, the right of every
Filipino to be buried in his country, is part of a continuing right that starts from
birth and ends only on the day he is finally laid to rest in his country.

This dissenting opinion does not pretend to deny the Philippine government
the right to lay down conditions for the burial of Mr. Marcos in this country, but
I submit that these conditions must, as a fundamental postulate, recognize the
right of the man, as a Filipino, to be buried in this country NOW.

The majority resolution, in effect, bans Mr. Marcos' burial in this country now.
Without in any way affecting my respect and regard for my brethren and
sisters in the majority, I am deeply concerned and greatly disturbed that, with
their decision banning a dead Marcos from burial in this country, they have
passed an opportunity to defuse a constitutional crisis that, in my humble
assessment, threatens to ignite an already divided nation, Regrettably, they
have ignored the constitutional dimension of the problem rooted in the ageless
and finest tradition of our people for respect and deference to the dead. What
predictably follows will be a continuing strife, among our people, of unending
hatred, recriminations and retaliations. God save this country!

My vote is for this Court to ORDER the respondents to allow the immediate
return and burial in the Republic of the Philippines of former President
Ferdinand E. Marcos, subject to such conditions as the Philippine government
may impose in the interest of peace and order.

SARMIENTO, J., Dissenting:

The case has curious trappings of a deja vu, the shoe being on the other foot,
yet, as I stated before, I can not allow personal emotions to soften my
"hardened impartiality" and deny, as a consequence, the rights of the ex-
President's bereaved to bury his remains in his homeland, and for them to
return from exile. As I had, then, voted to grant the petition, so do I vote to
grant reconsideration.

I have gone to lengths to locate in the four comers of the Constitution, by


direct grant or by implication, the President's supposed "residual" power to
forbid citizens from entering the motherland reiterated in the resolution of the
majority. I have found none. I am not agreed, that:

3. Contrary to petitioners view, it cannot be denied that the


President, upon whom executive power is vested, has unstated
residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties
under the Constitution. The powers of the President are not
limited to what are expressly enumerated in the article on the
Executive Department and in scattered provisions of the
Constitution. This, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the
powers of the President as a reaction to the abuses under the
regime of Mr. Marcos, for the result was a limitation of specific
powers of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the general
grant of executive power.

It is a nice word game, but it is nothing else. For, if the Constitution has
imposed limitations on specific powers of the President, it has, a fortiori,
prescribed a diminution of executive power. The Charter says that the right
may only be restricted by: (1) a court order; or (2) by fiat of law. Had the
fundamental law intended a presidential imprimatur, it would have said so. It
would have also completed the symmetry: judicial, congressional, and
executive restraints on the right. No amount of presumed residual executive
power can amend the Charter.

It is well to note that the Bill of Rights stands primarily, a limitation not only
against legislative encroachments on individual liberties, but more so, against
presidential intrusions. And especially so, because the President is the
caretaker of the military establishment that has, several times over, been
unkind to part of the population it has also sworn to protect.

That "[t]he threats to the government, to which the return of the Marcoses has
been viewed to provide a catalytic effect, have not been shown to have
ceased" (Res., 3) is the realm of conjecture, speculation, and imagination. The
military has shown no hard evidence that "the return of the Marcoses" would
indeed interpose a threat to national security. And apparently, the majority
itself is not convinced ("has been viewed...").

That Mrs. Marcos has referred to President Corazon Aquino as an illegitimate


President, does not, so I submit, reinforce alleged fears of a massive
destabilization awaiting the nation. The military has said over and over that
Marcos followers are not capable of successful destabilization effort. And only
this morning (October 27, 1989), media reported the assurances given to
foreign investors by no less than the President, of the political and economic
stability of the nation, as well as the Government's capability to quell forces
that menace the gains of EDSA.

I have no eulogies to say on the passing of Mr. Marcos. My personal


impressions, however, are beside the point. I reiterate that the President has
no power to deny requests of Marcos relatives to bury Marcos in his
homeland. As for the former, let them get their just deserts here too. And let
the matter rest.

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 96409 February 14, 1992

CITIZEN J. ANTONIO M. CARPIO, petitioner,

vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF LOCAL GOVERNMENTS, THE SECRETARY OF NATIONAL
DEFENSE and THE NATIONAL TREASURER, respondents.

PARAS, J.:

At the very outset, it should be well to set forth the constitutional provision that is at the core of the
controversy now confronting us, thus:

Article XVI, Section 6:

The State shall establish and maintain one police force, which stall be national in scope and civilian in
character, to be administered and controlled by a national police commission. The authority of local
executives over the police units in their jurisdiction shall be provided by law. 1

With the aforequoted provision in mind, Congress passed Republic Act No. 6975 entitled "AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE
INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES" as the consolidated version of House
Bill No. 23614 and Senate Bill No. 463.

Following the said Act's approval by President Corazon C. Aquino on December 13, 1990, it was
published on December 17, 1990. 2

Presently, however, petitioner as citizen, taxpayer and member of the Philippine Bar sworn to defend
the Constitution, filed the petition now at bar on December 20, 1990, seeking this Court's declaration of
unconstitutionality of RA 6975 with prayer for temporary restraining order.

But in an en banc resolution dated December 27, 1990, We simply required the public respondents to
file their Comment, without however giving due course to the petition and the prayer therein. Hence,
the Act took effect after fifteen days following its publication, or on January 1, 1991. 3
Before we settle down on the merits of the petition, it would likewise be well to discuss albeit briefly the
history of our police force and the reasons for the ordination of Section 6, Article XVI in our present
Constitution.

During the Commonwealth period, we had the Philippine Constabulary as the nucleus of the Philippine
Ground Force (PGF), now the Armed Forces of the Philippines (AFP). The PC was made part of the PGF
but its administrative, supervisory and directional control was handled by the then Department of the
Interior. After the war, it remained as the "National Police" under the Department of National Defense,
as a major service component of the AFP. 4

Later, the Integration Act of 1975 5 created the Integrated National Police (INP) under the Office of the
President, with the PC as the nucleus, and the local police forces as the civilian components. The PC-INP
was headed by the PC Chief who, as concurrent Director-General of the INP, exercised command
functions over the INP. 6

The National Police Commission (NAPOLCOM) 7 exercised administrative control and supervision while
the local executives exercised operational supervision and direction over the INP units assigned within
their respective localities. 8

The set-up whereby the INP was placed under the command of the military component, which is the PC,
severely eroded the INP's civilian character and the multiplicity in the governance of the PC-INP resulted
in inefficient police service. 9 Moreover, the integration of the national police forces with the PC also
resulted in inequities since the military component had superior benefits and privileges. 10

The Constitutional Commission of 1986 was fully aware of the structural errors that beset the system.
Thus, Com. Teodulo C. Natividad explained that:

xxx xxx xxx

MR. NATIVIDAD. . . . The basic tenet of a modern police organization is to remove it from the military. 11
xxx xxx xxx

Here in our draft Constitution, we have already made a constitutional postulate that the military cannot
occupy any civil service position [in Section 6 of the Article on the Civil Service 12] Therefore, in keeping
with this and because of the universal acceptance that a police force is a civilian function, a public
service, and should not be performed by military force, one of the basic reforms we are presenting here
is that it should be separated from the military force which is the PC. 13

xxx xxx xxx

Furthermore:

xxx xxx xxx

. . . the civilian police cannot blossom into full profession because most of the key positions are being
occupied by the military So, it is up to this Commission to remove the police from such a situation so
that it can develop into a truly professional civilian police. . . . 14

Hence, the "one police force, national in scope, and civilian in character" provision that is now Article
XVI, Section 6 of the 1987 Constitution.

And so we now come to the merits of the petition at hand.

In the main, petitioner herein respectfully advances the view that RA 6975 emasculated the National
Police Commission by limiting its power "to administrative control" over the Philippine National Police
(PNP), thus, "control" remained with the Department Secretary under whom both the National Police
Commission and the PNP were placed. 15

We do not share this view.


To begin with, one need only refer to the fundamentally accepted principle in Constitutional Law that
the President has control of all executive departments, bureaus, and offices to lay at rest petitioner's
contention on the matter.

This presidential power of control over the executive branch of government extends over all executive
officers from Cabinet Secretary to the lowliest clerk 17 and has been held by us, in the landmark case of
Mondano vs. Silvosa, 18 to mean "the power of [the President] to alter or modify or nullify or set aside
what a subordinate officer had done in the performance of his duties and to substitute the judgment of
the former with that of the latter." It is said to be at the very "heart of the meaning of Chief Executive."
19

Equally well accepted, as a corollary rule to the control powers of the President, is the "Doctrine of
Qualified Political Agency". As the President cannot be expected to exercise his control powers all at the
same time and in person, 20 he will have to delegate some of them to his Cabinet members.

Under this doctrine, which recognizes the establishment of a single executive, 21 "all executive and
administrative organizations are adjuncts of the Executive Department, the heads of the various
executive departments are assistants and agents of the Chief Executive, and, except in cases where the
Chief Executive is required by the Constitution or law to act in person on the exigencies of the situation
demand that he act personally, the multifarious executive and administrative functions of the Chief
Executive are performed by and through the executive departments, and the acts of the Secretaries of
such departments, performed and promulgated in the regular course of business, unless disapproved or
reprobated by the Chief Executive presumptively the acts of the Chief Executive." 22 (emphasis ours)

Thus, and in short, "the President's power of control is directly exercised by him over the members of
the Cabinet who, in turn, and by his authority, control the bureaus and other offices under their
respective jurisdictions in the executive department." 23

Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the reorganized
Department of Interior and Local Government is merely an administrative realignment that would
bolster a system of coordination and cooperation among the citizenry, local executives and the
integrated law enforcement agencies and public safety agencies created under the assailed Act, 24 the
funding of the PNP being in large part subsidized by the national government.
Such organizational set-up does not detract from the mandate of the Constitution that the national
police force shall be administered and controlled by a national police commission as at any rate, and in
fact, the Act in question adequately provides for administration and control at the commission level, as
shown in the following provisions, to wit:

Sec. 14. Powers and Functions of the Commission. The Commission shall exercise the following
powers and functions:

xxx xxx xxx

(i) Approve or modify plans and programs on education and training, logistical requirements,
communications, records, information systems, crime laboratory, crime prevention and crime reporting;

(j) Affirm, reverse or modify, through the National Appellate Board, personnel disciplinary actions
involving demotion or dismissal from the service imposed upon members of the Philippine National
Police by the Chief of the PNP;

(k) Exercise appellate jurisdiction through .the regional. appellate boards over administrative cases
against policemen and over decisions on claims for police benefits;

xxx xxx xxx

Sec. 26. The Command and direction of the PNP shall be vested in the Chief of the PNP . . . Such
command and direction of the Chief of the PNP may be delegated to subordinate officials with respect
to the units under their respective commands, in accordance with the rules and regulations prescribed
by the Commission. . . .

xxx xxx xxx


Sec. 35. . . . To enhance police operational efficiency and effectiveness, the Chief of the PNP may
constitute such other support units as may be necessary subject to the approval of the Commission. . . .

xxx xxx xxx

Sec. 37. . . . There shall be established a performance evaluation system which shall be administered in
accordance with the rules, regulations and standards; and a code of conduct promulgated by the
Commission for members of the PNP. . . .

xxx xxx xxx

Petitioner further asserts that in manifest derogation of the power of control of the NAPOLCOM over
the PNP, RA 6975 vested the power to choose the PNP Provincial Director and the Chiefs of Police in the
Governors and Mayors, respectively; the power of "operational supervision and control" over police
units in city and municipal mayors; in the Civil Service Commission, participation in appointments to the
positions of Senior Superintendent to Deputy Director-General as well as the administration of
qualifying entrance examinations; disciplinary powers over PNP members in the "People's Law
Enforcement Boards" and in city and municipal mayors. 25

Once more, we find no real controversy upon the foregoing assertions.

It is true that when the Constitutional Commissioners of 1986 provided that the authority of local
executives over the police units in their jurisdiction shall be provided by law, they intended that the day-
to-day functions of police work like crime, investigation, crime prevention activities, traffic control, etc.,
would be under the operational control of the local executives as it would not be advisable to give full
control of the police to the local executives. 26

They reasoned that in the past, this gave rise to warlordism, bossism, and sanctuaries for vices and
abuses. 27
It would appear then that by vesting in the local executives the power to choose the officers in question,
the Act went beyond the bounds of the Constitution's intent.

Not so. We find light in the principle of constitutional construction that every presumption should be
indulged in favor of constitutionality and the court in considering the validity of the statute in question
should give it such reasonable construction as can be reached to bring it within the fundamental

law. 28

Under the questioned provisions, which read as follows:

D. PARTICIPATION OF LOCAL EXECUTIVES IN THE ADMINISTRATION OF THE PNP.

Sec. 51. Powers of Local Government Officials over the PNP Units or Forces.

Governors and mayors shall be deputized as representatives of the Commission in their respective
territorial jurisdictions. As such, the local executives shall discharge the following functions:

a.) Provincial Governor (1) . . .

The provincial governor shall choose the provincial director from a list of three (3) eligibles
recommended by the PNP Regional Director.

4) . . . City and municipal mayors shall have the following authority over the PNP units in their respective
jurisdictions:

i.) Authority to choose the chief of police from a list of five (5) eligibles recommended by the Provincial
Police Director. . . . (Emphasis ours)
full control remains with the National Police Commission.

We agree, and so hold, with the view of the Solicitor General that "there is no usurpation of the power
of control of the NAPOLCOM under Section 51 because under this very same provision, it is clear that
the local executives are only acting as representatives of the NAPOLCOM. . . . As such deputies, they are
answerable to the NAPOLCOM for their actions in the exercise of their functions under that section.
Thus, unless countermanded by the NAPOLCOM, their acts are valid and binding as acts of the
NAPOLCOM." 29 It is significant to note that the local officials, as NAPOLCOM representatives, will
choose the officers concerned from a list of eligibles (those who meet the general qualifications for
appointment to the PNP) 30 to be recommended by PNP officials.

The same holding is true with respect to the contention on the operational supervision and control
exercised by the local officials. Those officials would simply be acting as representatives of the
Commission.

As regards the assertion involving the Civil Service Commission, suffice it to say that the questioned
provisions, which read:

Sec. 31. Appointment of PNP Officers and Members. The Appointment of the officers and members of
the PNP shall be effected in the following manner:

a.) Police Officer I to Senior Police Officer IV. Appointed by the PNP regional director for regional
personnel or by the Chief of the PNP for national headquarters personnel and attested by the Civil
Service Commission;

b.) Inspector to Superintendent. Appointed by the Chief of the PNP, as recommended by their
immediate superiors, and attested by the Civil Service Commission;

c.) Senior Superintendent to Deputy Director-General. Appointed by the President upon


recommendation of the Chief of the PNP, with proper endorsement by the Chairman of the Civil Service

Commission . . .
Sec. 32. Examinations for Policemen. The Civil Service Commission shall administer the qualifying
entrance examinations for policemen on the basis of the standards set by the NAPOLCOM.

precisely underscore the civilian character of the national police force, and will undoubtedly
professionalize the same.

The grant of disciplinary powers over PNP members to the "People's Law Enforcement Boards" (or the
PLEB) and city and municipal mayors is also not in derogation of the commission's power of control over
the PNP.

Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the regional appellate boards,
over decisions of both the PLEB and the said mayors. This is so under Section 20(c). Furthermore, it is
the Commission which shall issue the implementing guidelines and procedures to be adopted by the
PLEB for in the conduct of its hearings, and it may assign NAPOLCOM hearing officers to act as legal
consultants of the PLEBs (Section 43-d4, d5).

As a disciplinary board primarily created to hear and decide citizen's complaints against erring officers
and members of the PNP, the establishment of PLEBs in every city, and municipality would all the more
help professionalize the police force.

Petitioner would likewise have this Court imagine that Section 12 of the questioned Act, the pertinent
portion of which reads:

Sec. 12. Relationship of the Department with the Department of National Defense. During a period of
twenty- four (24) months from the effectivity of this Act, the Armed Forces of the Philippines (AFP) shall
continue its present role of preserving the internal and external security of the State: Provided, that said
period may be extended by the President, if he finds it justifiable, for another period not exceeding
twenty-four (24) months, after which, the Department shall automatically take over from the AFP the
primary role of preserving internal security, leaving to the AFP its primary role of preserving external
security.
xxx xxx xxx

constitutes an "encroachment upon, interference with, and an abdication by the President of, executive
control and commander-in-chief powers."

That We are not disposed to do for such is not the case at all here. A rejection thus of petitioner's
submission anent Section 12 of the Act should be in order in the light of the following exchanges during
the CONCOM deliberations of Wednesday, October 1, 1986:

xxx xxx xxx

MR. RODRIGO. Just a few questions. The President of the Philippines is the Commander-in-Chief of all
the armed forces.

MR. NATIVIDAD. Yes, Madam President.

MR. RODRIGO. Since the national police is not integrated with the armed forces, I do not suppose they
come under the Commander-in-Chief powers of the President of the Philippines.

MR. NATIVIDAD. They do, Madam President. By law they are under the supervision and control of the
President of the Philippines.

MR. RODRIGO. Yes, but the President is not the Commander-in-Chief of the national police.

MR. NATIVIDAD. He is the President.

MR. RODRIGO. Yes, the Executive. But they do not come under that specific provision that the President
is Commander-in-Chief of all the armed forces.
MR. NATIVIDAD. No, not under the Commander-in-Chief provision.

MR. RODRIGO. There are two other powers of the President. The President has control over
departments, bureaus and offices, and supervision over local governments. Under which does the police
fall, under control or under supervision?

MR. NATIVIDAD. Both, Madam President.

MR. RODRIGO. Control and Supervision.

MR. NATIVIDAD. Yes, in fact, the National Police Commission is under the Office of the President.
(CONCOM RECORDS, Vol. 5, p. 296)

It thus becomes all too apparent then that the provision herein assailed precisely gives muscle to and
enforces the proposition that the national police force does not fall under the Commander-in-Chief
powers of the President. This is necessarily so since the police force, not being integrated with the
military, is not a part of the Armed Forces of the Philippines. As a civilian agency of the government, it
properly comes within, and is subject to, the exercise by the President of the power of executive control.

Consequently, Section 12 does not constitute abdication of commander-in-chief powers. It simply


provides for the transition period or process during which the national police would gradually assume
the civilian function of safeguarding the internal security of the State. Under this instance, the President,
to repeat, abdicates nothing of his war powers. It would bear to here state, in reiteration of the
preponderant view, that the President, as Commander-in-Chief, is not a member of the Armed Forces.
He remains a civilian whose duties under the Commander-in-Chief provision "represent only a part of
the organic duties imposed upon him. All his other functions are clearly civil in nature." 31 His position
as a civilian Commander-in-Chief is consistent with, and a testament to, the constitutional principle that
"civilian authority is, at all times, supreme over the military." (Article II, Section 3, 1987 Constitution)

Finally, petitioner submits that the creation of a "Special Oversight Committee" under Section 84 of the
Act, especially the inclusion therein of some legislators as members (namely: the respective Chairmen of
the Committee on Local Government and the Committee on National Defense and Security in the
Senate, and the respective Chairmen of the Committee on Public Order and Security and the Committee
on National Defense in the House of Representatives) is an "unconstitutional encroachment upon and a
diminution of, the President's power of control over all executive departments, bureaus and offices."

But there is not the least interference with the President's power of control under Section 84. The
Special Oversight Committee is simply an ad hoc or transitory body, established and tasked solely with
planning and overseeing the immediate "transfer, merger and/or absorption" into the Department of
the Interior and Local Governments of the "involved agencies." This it will undertake in accordance with
the phases of implementation already laid down in Section 85 of the Act and once this is carried out, its
functions as well as the committee itself would cease altogether. 32 As an ad hoc body, its creation and
the functions it exercises, decidedly do not constitute an encroachment and in diminution of the power
of control which properly belongs to the President. What is more, no executive department, bureau or
office is placed under the control or authority, of the committee. 33

As a last word, it would not be amiss to point out here that under the Constitution, there are the so-
called independent Constitutional Commissions, namely: The Civil Service Commission, Commission on
Audit, and the Commission on Elections. (Article IX-A, Section 1)

As these Commissions perform vital governmental functions, they have to be protected from external
influences and political pressures. Hence, they were made constitutional bodies, independent of and not
under any department of the government. 34 Certainly, they are not under the control of the President.

The Constitution also created an independent office called the "Commission on Human Rights." (Article
XIII, Section 17[1]).However, this Commission is not on the same level as the Constitutional Commissions
under Article IX, although it is independent like the latter Commissions. 35 It still had to be constituted
thru Executive Order No. 163 (dated May 5, 1987).

In contrast, Article XVI, Section 6 thereof, merely mandates the statutory creation of a national police
commission that will administer and control the national police force to be established thereunder.

This commission is, for obvious reasons, not in the same category as the independent Constitutional
Commissions of Article IX and the other constitutionally created independent Office, namely, the
Commission on Human Rights.
By way of resume, the three Constitutional Commissions (Civil Service, Audit, Elections) and the
additional commission created by the Constitution (Human Rights) are all independent of the Executive;
but the National Police Commission is not. 36 In fact, it was stressed during the CONCOM deliberations
that this commission would be under the President, and hence may be controlled by the President, thru
his or her alter ego, the Secretary of the Interior and Local Government.

WHEREFORE, having in view all of the foregoing holdings, the instant petition is hereby DISMISSED for
lack of merit.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea,
Regalado, Davide, Jr., Romero and Nocon, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. 90336 August 12, 1991

RUPERTO TAULE, petitioner,


vs.
SECRETARY LUIS T. SANTOS and GOVERNOR LEANDRO VERCELES, respondents.

Balgos & Perez and Bugaring, Tugonon & Associates Law Offices for petitioner.
Juan G. Atencia for private respondent.

GANCAYCO, J.:

The extent of authority of the Secretary of Local Government over the katipunan ng mga
barangay or the barangay councils is brought to the fore in this case.
On June 18,1989, the Federation of Associations of Barangay Councils (FABC) of Catanduanes,
composed of eleven (11) members, in their capacities as Presidents of the Association of
Barangay Councils in their respective municipalities, convened in Virac, Catanduanes with six
members in attendance for the purpose of holding the election of its officers.

Present were petitioner Ruperto Taule of San Miguel, Allan Aquino of Viga, Vicente Avila of
Virac, Fidel Jacob of Panganiban, Leo Sales of Caramoran and Manuel Torres of Baras. The
Board of Election Supervisors/Consultants was composed of Provincial Government Operation
Officer (PGOO) Alberto P. Molina, Jr. as Chairman with Provincial Treasurer Luis A. Manlapaz,
Jr. and Provincial Election Supervisor Arnold Soquerata as members.

When the group decided to hold the election despite the absence of five (5) of its members, the
Provincial Treasurer and the Provincial Election Supervisor walked out.

The election nevertheless proceeded with PGOO Alberto P. Molina, Jr. as presiding officer.
Chosen as members of the Board of Directors were Taule, Aquino, Avila, Jacob and Sales.

Thereafter, the following were elected officers of the FABC:

President Ruperto Taule

Vice-President Allan Aquino

Secretary Vicente Avila

Treasurer Fidel Jacob

Auditor Leo Sales1

On June 19, 1989, respondent Leandro I. Verceles, Governor of Catanduanes, sent a letter to
respondent Luis T. Santos, the Secretary of Local Government, * protesting the election of the
officers of the FABC and seeking its nullification in view of several flagrant irregularities in the
manner it was conducted.2

In compliance with the order of respondent Secretary, petitioner Ruperto Taule as President of
the FABC, filed his comment on the letter-protest of respondent Governor denying the alleged
irregularities and denouncing said respondent Governor for meddling or intervening in the
election of FABC officers which is a purely non-partisan affair and at the same time requesting
for his appointment as a member of the Sangguniang Panlalawigan of the province being the
duly elected President of the FABC in Catanduanes.3

On August 4, 1989, respondent Secretary issued a resolution nullifying the election of the
officers of the FABC in Catanduanes held on June 18, 1989 and ordering a new one to be
conducted as early as possible to be presided by the Regional Director of Region V of the
Department of Local Government.4
Petitioner filed a motion for reconsideration of the resolution of August 4, 1989 but it was denied
by respondent Secretary in his resolution of September 5, 1989.5

In the petition for certiorari before Us, petitioner seeks the reversal of the resolutions of
respondent Secretary dated August 4, 1989 and September 5, 1989 for being null and void.

Petitioner raises the following issues:

1) Whether or not the respondent Secretary has jurisdiction to entertain an election protest
involving the election of the officers of the Federation of Association of Barangay Councils;

2) Whether or not the respondent Governor has the legal personality to file an election protest;

3) Assuming that the respondent Secretary has jurisdiction over the election protest, whether or
not he committed grave abuse of discretion amounting to lack of jurisdiction in nullifying the
election;

The Katipunan ng mga Barangay is the organization of all sangguniang barangays in the
following levels: in municipalities to be known as katipunang bayan; in cities, katipunang
panlungsod; in provinces, katipunang panlalawigan; in regions, katipunang pampook; and on the
national level, katipunan ng mga barangay.6

The Local Government Code provides for the manner in which the katipunan ng mga barangay
at all levels shall be organized:

Sec. 110. Organization. (1) The katipunan at all levels shall be organized in the
following manner:

(a) The katipunan in each level shall elect a board of directors and a set of officers. The
president of each level shall represent the katipunan concerned in the next higher level of
organization.

(b) The katipunan ng mga barangay shall be composed of the katipunang pampook,
which shall in turn be composed of the presidents of the katipunang panlalawigan and the
katipunang panlungsod. The presidents of the katipunang bayan in each province shall
constitute the katipunang panlalawigan. The katipunang panlungsod and the katipunang
bayan shall be composed of the punong barangays of cities and municipalities,
respectively.

xxx xxx xxx

The respondent Secretary, acting in accordance with the provision of the Local Government
Code empowering him to "promulgate in detail the implementing circulars and the rules and
regulations to carry out the various administrative actions required for the initial implementation
of this Code in such a manner as will ensure the least disruption of on-going programs and
projects7 issued Department of Local Government Circular No. 89-09 on April 7, 1989,8 to
provide the guidelines for the conduct of the elections of officers of the Katipunan ng mga
Barangay at the municipal, city, provincial, regional and national levels.

It is now the contention of petitioner that neither the constitution nor the law grants jurisdiction
upon the respondent Secretary over election contests involving the election of officers of the
FABC, the katipunan ng mga barangay at the provincial level. It is petitioner's theory that under
Article IX, C, Section 2 of the 1987 Constitution, it is the Commission on Elections which has
jurisdiction over all contests involving elective barangay officials.

On the other hand, it is the opinion of the respondent Secretary that any violation of the
guidelines as set forth in said circular would be a ground for filing a protest and would vest upon
the Department jurisdiction to resolve any protest that may be filed in relation thereto.

Under Article IX, C, Section 2(2) of the 1987 Constitution, the Commission on Elections shall
exercise "exclusive original jurisdiction over all contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction
over all contests involving elective municipal officials decided by trial courts of general
jurisdiction, or involving elective barangay officials decided by trial courts of limited
jurisdiction." The 1987 Constitution expanded the jurisdiction of the COMELEC by granting it
appellate jurisdiction over all contests involving elective municipal officials decided by trial
courts of general jurisdiction or elective barangay officials decided by trial courts of limited
jurisdiction.9

The jurisdiction of the COMELEC over contests involving elective barangay officials is limited
to appellate jurisdiction from decisions of the trial courts. Under the law,10 the sworn petition
contesting the election of a barangay officer shall be filed with the proper Municipal or
Metropolitan Trial Court by any candidate who has duly filed a certificate of candidacy and has
been voted for the same office within 10 days after the proclamation of the results. A voter may
also contest the election of any barangay officer on the ground of ineligibility or of disloyalty to
the Republic of the Philippines by filing a sworn petition for quo warranto with the Metropolitan
or Municipal Trial Court within 10 days after the proclamation of the results of the election.11
Only appeals from decisions of inferior courts on election matters as aforestated may be decided
by the COMELEC.

The Court agrees with the Solicitor General that the jurisdiction of the COMELEC is over
popular elections, the elected officials of which are determined through the will of the electorate.
An election is the embodiment of the popular will, the expression of the sovereign power of the
people.12 It involves the choice or selection of candidates to public office by popular vote.13
Specifically, the term "election," in the context of the Constitution, may refer to the conduct of
the polls, including the listing of voters, the holding of the electoral campaign, and the casting
and counting of the votes14 which do not characterize the election of officers in the Katipunan
ng mga barangay. "Election contests" would refer to adversary proceedings by which matters
involving the title or claim of title to an elective office, made before or after proclamation of the
winner, is settled whether or not the contestant is claiming the office in dispute15 and in the case
of elections of barangay officials, it is restricted to proceedings after the proclamation of the
winners as no pre-proclamation controversies are allowed.16
The jurisdiction of the COMELEC does not cover protests over the organizational set-up of the
katipunan ng mga barangay composed of popularly elected punong barangays as prescribed by
law whose officers are voted upon by their respective members. The COMELEC exercises only
appellate jurisdiction over election contests involving elective barangay officials decided by the
Metropolitan or Municipal Trial Courts which likewise have limited jurisdiction. The authority
of the COMELEC over the katipunan ng mga barangay is limited by law to supervision of the
election of the representative of the katipunan concerned to the sanggunian in a particular level
conducted by their own respective organization.17

However, the Secretary of Local Government is not vested with jurisdiction to entertain any
protest involving the election of officers of the FABC.

There is no question that he is vested with the power to promulgate rules and regulations as set
forth in Section 222 of the Local Government Code.

Likewise, under Book IV, Title XII, Chapter 1, See. 3(2) of the Administrative Code of 1987, **
the respondent Secretary has the power to "establish and prescribe rules, regulations and other
issuances and implementing laws on the general supervision of local government units and on
the promotion of local autonomy and monitor compliance thereof by said units."

Also, the respondent Secretary's rule making power is provided in See. 7, Chapter II, Book IV of
the Administrative Code, to wit:

(3) Promulgate rules and regulations necessary to carry out department objectives,
policies, functions, plans, programs and projects;

Thus, DLG Circular No. 89-09 was issued by respondent Secretary in pursuance of his rule-
making power conferred by law and which now has the force and effect of law.18

Now the question that arises is whether or not a violation of said circular vests jurisdiction upon
the respondent Secretary, as claimed by him, to hear a protest filed in relation thereto and
consequently declare an election null and void.

It is a well-settled principle of administrative law that unless expressly empowered,


administrative agencies are bereft of quasi- judicial powers.19 The jurisdiction of administrative
authorities is dependent entirely upon the provisions of the statutes reposing power in them; they
cannot confer it upon themselves.20 Such jurisdiction is essential to give validity to their
determinations.21

There is neither a statutory nor constitutional provision expressly or even by necessary


implication conferring upon the Secretary of Local Government the power to assume jurisdiction
over an election protect involving officers of the katipunan ng mga barangay. An understanding
of the extent of authority of the Secretary over local governments is therefore necessary if We
are to resolve the issue at hand.
Presidential power over local governments is limited by the Constitution to the exercise of
general supervision22 "to ensure that local affairs are administered according to law."23 The
general supervision is exercised by the President through the Secretary of Local Government.24

In administrative law, supervision means overseeing or the power or authority of an officer to see
that the subordinate officers perform their duties. If the latter fails or neglects to fulfill them the
former may take such action or step as prescribed by law to make them perform their duties.
Control, on the other hand, means the power of an officer to alter or modify or nullify or set
aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter. The fundamental law permits the Chief Executive to
wield no more authority than that of checking whether said local government or the officers
thereof perform their duties as provided by statutory enactments. Hence, the President cannot
interfere with local governments so long as the same or its officers act within the scope of their
authority.25 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.26

Construing the constitutional limitation on the power of general supervision of the President over
local governments, We hold that respondent Secretary has no authority to pass upon the validity
or regularity of the election of the officers of the katipunan. To allow respondent Secretary to do
so will give him more power than the law or the Constitution grants. It will in effect give him
control over local government officials for it will permit him to interfere in a purely democratic
and non-partisan activity aimed at strengthening the barangay as the basic component of local
governments so that the ultimate goal of fullest autonomy may be achieved. In fact, his order that
the new elections to be conducted be presided by the Regional Director is a clear and direct
interference by the Department with the political affairs of the barangays which is not permitted
by the limitation of presidential power to general supervision over local governments.27

Indeed, it is the policy of the state to ensure the autonomy of local governments.28 This state
policy is echoed in the Local Government Code wherein it is declared that "the State shall
guarantee and promote the autonomy of local government units to ensure their fullest
development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress."29 To deny the Secretary of Local Government the
power to review the regularity of the elections of officers of the katipunan would be to enhance
the avowed state policy of promoting the autonomy of local governments.

Moreover, although the Department 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.30 To monitor means "to watch, observe or check.31
This is compatible with the power of supervision of the Secretary over local governments which
as earlier discussed is limited to checking whether the local government unit concerned or the
officers thereof perform their duties as provided by statutory enactments. Even the Local
Government Code which grants the Secretary power to issue implementing circulars, rules and
regulations is silent as to how these issuances should be enforced. Since the respondent Secretary
exercises only supervision and not control over local governments, it is truly doubtful if he could
enforce compliance with the DLG Circular.32 Any doubt therefore as to the power of the
Secretary to interfere with local affairs should be resolved in favor of the greater autonomy of the
local government.

Thus, the Court holds that in assuming jurisdiction over the election protest filed by respondent
Governor and declaring the election of the officers of the FABC on June 18, 1989 as null and
void, the respondent Secretary acted in excess of his jurisdiction. The respondent Secretary not
having the jurisdiction to hear an election protest involving officers of the FABC, the recourse of
the parties is to the ordinary courts. The Regional Trial Courts have the exclusive original
jurisdiction to hear the protest.33

The provision in DLG Circular No. 89-15 amending DLG Circular No. 89-09 which states that
"whenever the guidelines are not substantially complied with, the election shall be declared null
and void by the Department of Local Government and an election shall conduct and being
invoked by the Solicitor General cannot be applied. DLG Circular No. 89-15 was issued on July
3, 1989 after the June 18, 1989 elections of the FABC officers and it is the rule in statutory
construction that laws, including circulars and regulations34 cannot be applied retrospectively.35
Moreover, such provision is null and void for having been issued in excess of the respondent
Secretary's jurisdiction, inasmuch as an administrative authority cannot confer jurisdiction upon
itself.

As regards the second issue raised by petitioner, the Court finds that respondent Governor has
the personality to file the protest. Under Section 205 of the Local Government Code, the
membership of the sangguniang panlalawigan consists of the governor, the vice-governor,
elective members of the said sanggunian and the presidents of the katipunang panlalawigan and
the kabataang barangay provincial federation. The governor acts as the presiding officer of the
sangguniang panlalawigan.36

As presiding officer of the sagguniang panlalawigan, the respondent governor has an interest in
the election of the officers of the FABC since its elected president becomes a member of the
assembly. If the president of the FABC assumes his presidency under questionable
circumstances and is allowed to sit in the sangguniang panlalawigan the official actions of the
sanggunian may be vulnerable to attacks as to their validity or legality. Hence, respondent
governor is a proper party to question the regularity of the elections of the officers of the FABC.

As to the third issue raised by petitioner, the Court has already ruled that the respondent
Secretary has no jurisdiction to hear the protest and nullify the elections.

Nevertheless, the Court holds that the issue of the validity of the elections should now be
resolved in order to prevent any unnecessary delay that may result from the commencement of
an appropriate action by the parties.

The elections were declared null and void primarily for failure to comply with Section 2.4 of
DLG Circular No. 89-09 which provides that "the incumbent FABC President or the Vice-
President shall preside over the reorganizational meeting, there being a quorum." The rule
specifically provides that it is the incumbent FABC President or Vice-President who shall
preside over the meeting. The word "shall" should be taken in its ordinary signification, i.e., it
must be imperative or mandatory and not merely
permissive,37 as the rule is explicit and requires no other interpretation. If it had been intended
that any other official should preside, the rules would have provided so, as it did in the elections
at the town and city levels38 as well as the regional level..39

It is admitted that neither the incumbent FABC President nor the Vice-President presided over
the meeting and elections but Alberto P. Molina, Jr., the Chairman of the Board of Election
Supervisors/Consultants. Thus, there was a clear violation of the aforesaid mandatory provision.
On this ground, the elections should be nullified.

Under Sec. 2.3.2.7 of the same circular it is provided that a Board of Election
Supervisors/Consultants shall be constituted to oversee and/or witness the canvassing of votes
and proclamation of winners. The rules confine the role of the Board of Election
Supervisors/Consultants to merely overseeing and witnessing the conduct of elections. This is
consistent with the provision in the Local Government Code limiting the authority of the
COMELEC to the supervision of the election.40

In case at bar, PGOO Molina, the Chairman of the Board, presided over the elections. There was
direct participation by the Chairman of the Board in the elections contrary to what is dictated by
the rules. Worse, there was no Board of Election Supervisors to oversee the elections in view of
the walk out staged by its two other members, the Provincial COMELEC Supervisor and the
Provincial Treasurer. The objective of keeping the election free and honest was therefore
compromised.

The Court therefore finds that the election of officers of the FABC held on June 18, 1989 is null
and void for failure to comply with the provisions of DLG Circular No. 89-09.

Meanwhile, pending resolution of this petition, petitioner filed a supplemental petition alleging
that public respondent Local Government Secretary, in his memorandum dated June 7, 1990,
designated Augusto Antonio as temporary representative of the Federation to the sangguniang
panlalawigan of Catanduanes.41 By virtue of this memorandum, respondent governor swore into
said office Augusto Antonio on June 14, 1990.42

The Solicitor General filed his comment on the supplemental petition43 as required by the
resolution of the Court dated September 13,1990.

In his comment, the Solicitor General dismissed the supervening event alleged by petitioner as
something immaterial to the petition. He argues that Antonio's appointment was merely
temporary "until such time that the provincial FABC president in that province has been elected,
appointed and qualified."44 He stresses that Antonio's appointment was only a remedial measure
designed to cope with the problems brought about by the absence of a representative of the
FABC to the "sanggunian ang panlalawigan."

Sec. 205 (2) of the Local Government Code (B.P. Blg. 337) provides-
(2) The sangguniang panlalawigan shall be composed of the governor, the vice-governor,
elective members of the said sanggunian and the presidents of the katipunang
panlalawigan and the kabataang barangay provincial federation who shall be appointed
by the President of the Philippines. (Emphasis supplied.)

Batas Pambansa Blg. 51, under Sec. 2 likewise states:

xxx xxx xxx

The sangguniang panlalawigan of each province shall be composed of the governor as


chairman and presiding officer, the vice-governor as presiding officer pro tempore, the
elective sangguniang panlalawigan members, and the appointive members consisting of
the president of the provincial association of barangay councils, and the president of the
provincial federation of the kabataang barangay. (Emphasis supplied.)

In Ignacio vs. Banate Jr.45 the Court, interpreting similarly worded provisions of Batas
Pambansa Blg. 337 and Batas Pambansa Blg. 51 on the composition of the sangguniang
panlungsod,46 declared as null and void the appointment of private respondent Leoncio Banate
Jr. as member of the Sangguniang Panlungsod of the City of Roxas representing the katipunang
panlungsod ng mga barangay for he lacked the elegibility and qualification required by law, not
being a barangay captain and for not having been elected president of the association of barangay
councils. The Court held that an unqualified person cannot be appointed a member of the
sanggunian, even in an acting capacity. In Reyes vs. Ferrer,47 the appointment of Nemesio L.
Rasgo Jr. as representative of the youth sector to the sangguniang panlungsod of Davao City was
declared invalid since he was never the president of the kabataang barangay city federation as
required by Sec. 173, Batas Pambansa Blg. 337.

In the present controversy involving the sangguniang panlalawigan, the law is likewise explicit.
To be appointed by the President of the Philippines to sit in the sangguniang panlalawigan is the
president of the katipunang panlalawigan. The appointee must meet the qualifications set by
law.48 The appointing power is bound by law to comply with the requirements as to the basic
qualifications of the appointee to the sangguniang panlalawigan. The President of the
Philippines or his alter ego, the Secretary of Local Government, has no authority to appoint
anyone who does not meet the minimum qualification to be the president of the federation of
barangay councils.

Augusto Antonio is not the president of the federation. He is a member of the federation but he
was not even present during the elections despite notice. The argument that Antonio was
appointed as a remedial measure in the exigency of the service cannot be sustained. Since
Antonio does not meet the basic qualification of being president of the federation, his
appointment to the sangguniang panlalawigan is not justified notwithstanding that such
appointment is merely in a temporary capacity. If the intention of the respondent Secretary was
to protect the interest of the federation in the sanggunian, he should have appointed the
incumbent FABC President in a hold-over capacity. For even under the guidelines, the term of
office of officers of the katipunan at all levels shall be from the date of their election until their
successors shall have been duly elected and qualified, without prejudice to the terms of their
appointments as members of the sanggunian to which they may be correspondingly appointed.49
Since the election is still under protest such that no successor of the incumbent has as yet
qualified, the respondent Secretary has no choice but to have the incumbent FABC President sit
as member of the sanggunian. He could even have appointed petitioner since he was elected the
president of the federation but not Antonio. The appointment of Antonio, allegedly the protege of
respondent Governor, gives credence to petitioner's charge of political interference by respondent
Governor in the organization. This should not be allowed. The barangays should be insulated
from any partisan activity or political intervention if only to give true meaning to local
autonomy.

WHEREFORE, the petition is GRANTED in that the resolution of respondent Secretary dated
August 4, 1989 is hereby SET ASIDE for having been issued in excess of jurisdiction.

The election of the officials of the ABC Federation held on June 18, 1989 is hereby
annulled.1wphi1 A new election of officers of the federation is hereby ordered to be conducted
immediately in accordance with the governing rules and regulations.

The Supplemental petition is hereby GRANTED. The appointment of Augusto Antonio as


representative to the Sangguniang Panlalawigan in a temporary capacity is declared null and
void.

No costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin,
Sarmiento, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Cario v. CHR, 204 SCRA 483 (1991)

FACTS: On September 17, 1990, a Monday and a class day, some 800 public school teacher,
among them the 8 herein private respondents who were members of the Manila Public School
Teachers Association (MPSTA) and Alliance of Concerned Teachers (ACT) undertook mass
concerted actions to dramatize and highlight their plight resulting from the alleged failure of
the public authorities to act upon grievances that had time and again been brought to the latters
attention.

The respondents were preventively suspended by the Secretary of Education. They complained
to CHR.

ISSUE: WON CHR has the power to adjudicate alleged human rights violations

RULING: No.
The Commission evidently intends to itself adjudicate, that is to say, determine with the
character of finality and definiteness, the same issues which have been passed upon and decided
by the Secretary of Education and subject to appeal to CSC, this Court having in fact, as
aforementioned, declared that the teachers affected may take appeals to the CSC on said matter,
if still timely.

The threshold question is whether or not the CHR has the power under the constitution to do so;
whether or not, like a court of justice or even a quasi-judicial agency, it has jurisdiction or
adjudicatory powers over, or the power to try and decide, or dear and determine, certain specific
type of cases, like alleged human rights violations involving civil or political rights.

The Court declares that the CHR to have no such power, and it was not meant by the
fundamental law to be another court or quasi-judicial agency in this country, or duplicate much
less take over the functions of the latter.

The most that may be conceded to the Commission in the way of adjudicative power is that it
may investigate, i.e. receive evidence and make findings of fact as regards claimed human rights
violations involving civil and political rights. But fact-finding is not adjudication, and cannot be
likened to judicial function of a court of justice, or even a quasi judicial agency or official. The
function of receiving evidence and ascertaining therefrom the facts of a controversy is not a
judicial function, properly speaking. To be considered such, the faculty of receiving evidence
and making factual conclusions in a controversy must be accompanied by the authority of
applying the law to those factual conclusions to the end that the controversy be decided or
determined authoritatively, finally and definitely, subject to such appeals or modes of review as
may be provided by law. This function, to repeat, the Commission does not have.

Hence it is that the CHR having merely the power to investigate, cannot and not try and
resolve on the merits (adjudicate) the matters involved in Striking Teachers HRC Case No. 90-
775, as it has announced it means to do; and cannot do so even if there be a claim that in the
administrative disciplinary proceedings against the teachers in question, initiated and conducted
by the DECS, their human rights, or civil or political rights had been transgressed.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-11216 March 6, 1916

COMPANIA GENERAL DE TABACOS DE FILIPINAS, petitioner,


vs.
THE BOARD OF PUBLIC UTILITY COMMISSIONERS, respondent.
Gilbert, Cohn and Fisher for petitioner.
Attorney-General Avancea for respondent.

MORELAND, J.:

This is an appeal from, or a petition for review of, an order of the Board of Public Utility
Commissioners of the Philippine Islands, requiring the petitioner to file a detailed report of its
finances and operations in the form set forth in the petition.

The petitioner alleges that it is a foreign corporation organized under the laws of Spain and
engaged in business in the Philippine Islands as a common carrier of passengers and merchandise
by water; that on or about the 7th day of June, 1915, the Board of Public Utility Commissioners
issued and caused to be served on petitioner an order to show cause why petitioner should not be
required to present detailed annual reports respecting its finances and operations respecting the
vessels owned and operated by it, in the form and containing the matters indicated by the model
attached to the petition; that after a hearing the Board of Public Utility Commissioners dictated
an order in the following terms: "The respondent is therefore ordered to present annually on or
before March first of each year a detailed report of finances and operations of such vessels as are
operated by it as a common carrier within the Philippine Islands, in the form and containing the
matters indicated in the model of annual report which accompanied the order to show cause
herein." The model referred to is made a part of this opinion and may be found in an appendix
thereto.

On its return to the order to show cause before the Board of Public Utility Commissioners the
petitioner denied the authority of the board to require the report asked for on the ground that the
provision of Act No. 2307 relied on by said board as authority for such requirement was, if
construed as conferring such power, invalid as constituting an unlawful attempt on the part of the
Legislature to delegate legislative power to the board. The petitioner also answered that the
requirements of the board with respect to the proposed report were "cumbersome and
unnecessarily prolix and that the preparation of the same would entail an immense amount of
clerical work."

The case coming here under the provision of section 37 of said Act No. 2307, the petitioner
raises the same questions that it presented to the Board of Public Utility Commissioners in its
answer to the order to show cause.

The section of Act No. 2307 under which the Board of Public Utility Commissioners relies for
its authority, so far as pertinent to the case at hand, reads as follows:

Sec. 16. The Board shall have power, after hearing, upon notice, by order in writing, to
require every public utility as herein defined:

xxx xxx xxx

(e) To furnish annually a detailed report of finances and operations, in such form and
containing such matters as the Board may from time to time by order prescribe.
As is apparent at a glance the provision conferring authority on the board is very general. It is
also very comprehensive. It calls for a detailed report of the finances and operations of the
petitioning steamship company. That, it would seem, covers substantially everything; for there is
very little to a steamship company but its finances and operations. It would have been practically
the same if the statute had given the Board of Public Utility Commissioners power "to require
every public utility to furnish annually a detailed report." Such provision would have been but
little broader and little less general than the present provision. It is clear that a statute which
authorizes a Board of Public Utility Commissioners to require detailed reports from public
utilities, leaving the nature of the report, the contents thereof, the general lines which it shall
follow, the principle upon which it shall proceed, indeed, all other matters whatsoever, to the
exclusive discretion of the board, is not expressing its own will or the will of the State with
respect to the public utilities to which it refers. Such a provision does not declare, or set out, or
indicate what information the State requires, what is valuable to it, what it needs in order to
impose correct and just taxation, supervision or control, or the facts which the State must have in
order to deal justly and equitably with such public utilities and to require them to deal justly and
equitably with the State. The Legislature seems simply to have authorized the Board of Public
Utility Commissioners to require what information the board wants. It would seem that the
Legislature, by the provision in question, delegated to the Board of Public Utility Commissioners
all of its powers over a given subject-matter in a manner almost absolute, and without laying
down a rule or even making a suggestion by which that power is to be directed, guided or
applied.

In the case of Cincinnati, W. & Z. R. R. Co. vs. Clinton County Comrs. (1 Ohio St. 77), the court,
dealing with the question of whether a power is strictly legislative, or administrative, or merely
relates to the execution of the law, said:

The true distinction is between the delegation of power to make the law, which
necessarily involves a discretion as to what shall be, and conferring authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first
cannot be done; to the latter no valid objection can be made.

This principle was applied in the case of Dowling vs. Lancashire Insurance Co. (92 Wis., 63). In
that case the statute provided that the insurance commissioner shall prepare, approve and adopt a
printed form of fire insurance policy to conform as nearly as might be to that used in the State of
New York. The Wisconsin Supreme Court held that to be a delegation of legislative power
saying:

The act, in our judgment, wholly fails to provide definitely and clearly what the standard
policy should contain, so that it could be put in use as a uniform policy required to take
the place of all others, without the determination of the insurance commissioner in
respect to matters involving the exercise of a legislative discretion that could not be
delegated, and without which the act could not possibly be put in use, as an act in
conformity to which all fire insurance policies were required to be issued.

The court also said:


The result of all the cases on this subject is that a law must be complete, in all its terms
and provisions, when it leaves the legislative branch of the government, and nothing must
be left to the judgment of the electors or other appointee or delegate of the legislature, so
that, in form and substance, it is a law in all its details, in presenti, but which may be left
to take effect in futuro, if necessary, upon the ascertainment of any prescribed fact or
event.

In the case of Birdsall vs. Clark (73 N. Y., 73), the court said:

If discretion and judgment are to be exercised, either as to time or manner, the body or
officer intrusted with the duty must exercise it, and cannot delegate it to any other officer
or person.

See also King vs. Concordia Fire Insurance Co. (140 Mich., 258); O'Neil vs. Fire Insurance Co.
(166 Pa. St., 72); Anderson vs. Manchester Fire Assurance Co. (59 Minn., 182).

In the case of State ex rel. Adams vs. Burdge (95 Wis., 390), a statute authorizing the state board
of health "to make rules and regulations, and to take such measures as may in its judgment be
necessary for the protection of the people of the state from Asiatic cholera, or other dangerous
contagious diseases," and declaring that the term "dangerous and contagious diseases," and used
in the act, "shall be construed and understood to mean such diseases as the state board of health
shall designate as contagious and dangerous to the public health," was held to "import and
include an absolute delegation of the legislative power over the entire subject here involved," and
was therefore declared unconstitutional.

In the case of Merchants Exchange vs. Knott (212 Mo., 616), in declaring unconstitutional, on
the ground of delegation of legislative power, a statute authorizing the Board of Railroad and
Warehouse Commissioners to establish state inspection of grain "at such places or in such
territory ... as in their opinion may be necessary," the court said:

It is obvious that the foregoing grant of power is given without statutory landmark,
compass, map, guide-post or corner-stone in one whit controlling its exercise or
prescribing its channel, or indicative of any certain intendment of the legislative mind,
beyond the mere grant. In essence it is the power of pure and simple despotism.

Commenting on the statute, the court further said:

True, the act was passed by the General Assembly, approved by the Chief Executive and
stands published as authenticated law, but to all intents and purposes it is only a barren
ideality, having such life as is thereafter breathed into it from an unconstitutional source.
No Missourian may know whether it applies to him or his concerns, as a rule of civil
conduct, or will ever apply until in the `opinion' of the commissioners it `may be'
considered `necessary'.
The General Assembly may not clip itself of one iota of its lawmaking power by a
voluntary delegation of any element of it by putting its constitutional prerogatives, its
conscience and wisdom, "into commission".

In the case of Schaezlein vs. Cabaniss (135 Cal., 466), the question before the court was the
validity of the following provision of the state law of California:

If in any factory or workshop any process or work is carried on by which dust, filaments,
or injurious gases are generated or produced that are liable to be inhaled by the persons
employed therein, and it appears to the commissioner . . . . that such inhalation could, to a
great extent, be prevented by the use of some mechanical contrivance, he shall direct that
such contrivance shall be provided, and within a reasonable time it shall be so provided
and used."

Another section of the same act made it a misdemeanor for any person to violate any of the
provisions of the act including those above quoted. Respecting the validity of the act the court
said:

The manifest objection to this law is, that upon the commission has been imposed not the
duty to enforce a law of the legislature, but the power to make a law for the individual,
and to enforce such rules of conduct as he may prescribe. It is thus arbitrary, special
legislation, and violative of the constitution.

The decision in the case of Interstate Commerce Commission vs. Goodrich Transit Co. (224 U.
S., 194) seems, by implication at least, to bear out the theory on which we are deciding this case.
The question there involved the validity of an act authorizing the Interstate Commerce
Commission to prescribe the form of accounts, records and memorandums to be kept by carriers,
and to require such carriers to make annual reports to the commission with respect to certain
information defined in the act. One of the questions raised by the steamship company was that
section 20 constituted an invalid delegation of legislative power to the commission. The Supreme
Court held that there was no delegation of legislative power, it said:

The Congress may not delegate its purely legislative powers to a commission, but, having
laid down the general rules of action under which a commission shall proceed, it may
require of that commission the application of such rules to particular situations and the
investigation of facts, with a view to making orders in a particular matter within the rules
laid down by the Congress. . . .

In section 20 (of the Commerce Act), Congress has authorized the commission to require
annual reports. The act itself prescribes in detail what those reports shall contain. . . . In
other words, Congress has laid down general rules for the guidance of the Commission,
leaving to it merely the carrying out of details in the exercise of the power so conferred.
This, we think, is not a delegation of legislative authority.

In another part of the same decision the court said with reference to the form of reports called for
by the Interstate Commerce Commission:
But such report is no broader than the annual report of such carriers, as prescribed by
section 20 of the Act.

See also Field vs. Clark (143 U. S., 649); State vs. Great Northern Ry. Co. (100 Minn., 445).

The Attorney-General lay great stress on the case of Kansas City So. Ry. Co. vs. United States
(231 U. S., 423). That case, however, so far as it touched the question of delegation of legislative
power, was decided on the principles governing the case of Interstate Commerce Commission vs.
Goodrich Transit Co., supra. Section 20 of the Act referred to in that and in the Goodrich case
sets out in detail the form which the accounts shall take and the matters they shall contain, and
even goes into considerable detail with regard to the classification of the carriers' accounts. In
that case the court said:

It amounts, after all, to no more than laying down the general rules of action under which
the Commission shall proceed, and leaving it to the Commission to apply those rules to
particular situations and circumstances by the establishment and enforcement of
administrative regulations.

In the case at bar the provision complained of does not law "down the general rules of action
under which the commission shall proceed." nor does it itself prescribe in detail what those
reports shall contain. Practically everything is left to the judgment and discretion of the Board of
Public Utility Commissioners, which is unrestrained as to when it shall act, why it shall act, how
it shall act, to what extent it shall act, or what it shall act upon.

We believe that the Legislature, by the provision in question, has abdicated its powers and
functions in favor of the Board of Public Utility Commissioners with respect to the matters
therein referred to, and that such Act is in violation of the Act of Congress of July 1, 1902. We
believe that the Legislature, by the provision referred to, has not asked for the information which
the State wants but has authorized and board to obtain the information which the board wants.

The order appealed from is set aside and the cause is returned to the Board of Public Utility
Commissioners with instructions to dismiss the proceeding. So ordered.

Arellano, C.J., Torres and Araullo, JJ., concur.


Carson and Trent, JJ., dissent.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-23825 December 24, 1965


EMMANUEL PELAEZ, petitioner,
vs.
THE AUDITOR GENERAL, respondent.

Zulueta, Gonzales, Paculdo and Associates for petitioner.


Office of the Solicitor General for respondent.

CONCEPCION, J.:

During the period from September 4 to October 29, 1964 the President of the Philippines,
purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive
Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated
in the margin.1 Soon after the date last mentioned, or on November 10, 1964 petitioner
Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present
special civil action, for a writ of prohibition with preliminary injunction, against the Auditor
General, to restrain him, as well as his representatives and agents, from passing in audit any
expenditure of public funds in implementation of said executive orders and/or any disbursement
by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said Section
68 has been impliedly repealed by Republic Act No. 2370 and constitutes an undue delegation of
legislative power. Respondent maintains the contrary view and avers that the present action is
premature and that not all proper parties referring to the officials of the new political
subdivisions in question have been impleaded. Subsequently, the mayors of several
municipalities adversely affected by the aforementioned executive orders because the latter
have taken away from the former the barrios composing the new political subdivisions
intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-
Fernando were allowed to and did appear as amici curiae.

The third paragraph of Section 3 of Republic Act No. 2370, reads:

Barrios shall not be created or their boundaries altered nor their names changed except
under the provisions of this Act or by Act of Congress.

Pursuant to the first two (2) paragraphs of the same Section 3:

All barrios existing at the time of the passage of this Act shall come under the provisions
hereof.

Upon petition of a majority of the voters in the areas affected, a new barrio may be
created or the name of an existing one may be changed by the provincial board of the
province, upon recommendation of the council of the municipality or municipalities in
which the proposed barrio is stipulated. The recommendation of the municipal council
shall be embodied in a resolution approved by at least two-thirds of the entire
membership of the said council: Provided, however, That no new barrio may be created if
its population is less than five hundred persons.
Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not
be created or their boundaries altered nor their names changed" except by Act of Congress or of
the corresponding provincial board "upon petition of a majority of the voters in the areas
affected" and the "recommendation of the council of the municipality or municipalities in which
the proposed barrio is situated." Petitioner argues, accordingly: "If the President, under this new
law, cannot even create a barrio, can he create a municipality which is composed of several
barrios, since barrios are units of municipalities?"

Respondent answers in the affirmative, upon the theory that a new municipality can be created
without creating new barrios, such as, by placing old barrios under the jurisdiction of the new
municipality. This theory overlooks, however, the main import of the petitioner's argument,
which is that the statutory denial of the presidential authority to create a new barrio implies a
negation of the bigger power to create municipalities, each of which consists of several barrios.
The cogency and force of this argument is too obvious to be denied or even questioned. Founded
upon logic and experience, it cannot be offset except by a clear manifestation of the intent of
Congress to the contrary, and no such manifestation, subsequent to the passage of Republic Act
No. 2379, has been brought to our attention.

Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive
orders are based, provides:

The (Governor-General) President of the Philippines may by executive order define the
boundary, or boundaries, of any province, subprovince, municipality, [township]
municipal district, or other political subdivision, and increase or diminish the territory
comprised therein, may divide any province into one or more subprovinces, separate any
political division other than a province, into such portions as may be required, merge any
of such subdivisions or portions with another, name any new subdivision so created, and
may change the seat of government within any subdivision to such place therein as the
public welfare may require: Provided, That the authorization of the (Philippine
Legislature) Congress of the Philippines shall first be obtained whenever the boundary of
any province or subprovince is to be defined or any province is to be divided into one or
more subprovinces. When action by the (Governor-General) President of the Philippines
in accordance herewith makes necessary a change of the territory under the jurisdiction of
any administrative officer or any judicial officer, the (Governor-General) President of the
Philippines, with the recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the several officers
affected and assign such officers to the new districts so formed.

Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions thereby
affected shall be made in such manner as may be recommended by the (Insular Auditor)
Auditor General and approved by the (Governor-General) President of the Philippines.

Respondent alleges that the power of the President to create municipalities under this section
does not amount to an undue delegation of legislative power, relying upon Municipality of
Cardona vs. Municipality of Binagonan (36 Phil. 547), which, he claims, has settled it. Such
claim is untenable, for said case involved, not the creation of a new municipality, but a mere
transfer of territory from an already existing municipality (Cardona) to another municipality
(Binagonan), likewise, existing at the time of and prior to said transfer (See Gov't of the P.I. ex
rel. Municipality of Cardona vs. Municipality, of Binagonan [34 Phil. 518, 519-5201) in
consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries
of two municipalities.

It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid
or settle conflicts of jurisdiction between adjoining municipalities, may partake of an
administrative nature involving, as it does, the adoption of means and ways to carry into
effect the law creating said municipalities the authority to create municipal corporations is
essentially legislative in nature. In the language of other courts, it is "strictly a legislative
function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and
exclusively the exercise of legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-
349). As the Supreme Court of Washington has put it (Territory ex rel. Kelly vs. Stewart,
February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of
statutes."

Although1a Congress may delegate to another branch of the Government the power to fill in the
details in the execution, enforcement or administration of a law, it is essential, to forestall a
violation of the principle of separation of powers, that said law: (a) be complete in itself it
must set forth therein the policy to be executed, carried out or implemented by the delegate2
and (b) fix a standard the limits of which are sufficiently determinate or determinable to
which the delegate must conform in the performance of his functions.2a Indeed, without a
statutory declaration of policy, the delegate would in effect, make or formulate such policy,
which is the essence of every law; and, without the aforementioned standard, there would be no
means to determine, with reasonable certainty, whether the delegate has acted within or beyond
the scope of his authority.2b Hence, he could thereby arrogate upon himself the power, not only
to make the law, but, also and this is worse to unmake it, by adopting measures
inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the
principle of separation of powers and the system of checks and balances, and, consequently,
undermining the very foundation of our Republican system.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for
a valid delegation of the power to fix the details in the enforcement of a law. It does not
enunciate any policy to be carried out or implemented by the President. Neither does it give a
standard sufficiently precise to avoid the evil effects above referred to. In this connection, we do
not overlook the fact that, under the last clause of the first sentence of Section 68, the President:

... may change the seat of the government within any subdivision to such place therein as
the public welfare may require.

It is apparent, however, from the language of this clause, that the phrase "as the public welfare
may require" qualified, not the clauses preceding the one just quoted, but only the place to which
the seat of the government may be transferred. This fact becomes more apparent when we
consider that said Section 68 was originally Section 1 of Act No. 1748,3 which provided that,
"whenever in the judgment of the Governor-General the public welfare requires, he may, by
executive order," effect the changes enumerated therein (as in said section 68), including the
change of the seat of the government "to such place ... as the public interest requires." The
opening statement of said Section 1 of Act No. 1748 which was not included in Section 68 of
the Revised Administrative Code governed the time at which, or the conditions under which,
the powers therein conferred could be exercised; whereas the last part of the first sentence of said
section referred exclusively to the place to which the seat of the government was to be
transferred.

At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we
assumed that the phrase "as the public welfare may require," in said Section 68, qualifies all
other clauses thereof. It is true that in Calalang vs. Williams (70 Phil. 726) and People vs.
Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest,"
respectively, as sufficient standards for a valid delegation of the authority to execute the law.
But, the doctrine laid down in these cases as all judicial pronouncements must be
construed in relation to the specific facts and issues involved therein, outside of which they do
not constitute precedents and have no binding effect.4 The law construed in the Calalang case
conferred upon the Director of Public Works, with the approval of the Secretary of Public Works
and Communications, the power to issue rules and regulations to promote safe transit upon
national roads and streets. Upon the other hand, the Rosenthal case referred to the authority of
the Insular Treasurer, under Act No. 2581, to issue and cancel certificates or permits for the sale
of speculative securities. Both cases involved grants to administrative officers of powers related
to the exercise of their administrative functions, calling for the determination of questions of fact.

Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of
municipalities, is not an administrative function, but one which is essentially and eminently
legislative in character. The question of whether or not "public interest" demands the exercise of
such power is not one of fact. it is "purely a legislative question "(Carolina-Virginia Coastal
Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question
(Udall vs. Severn, 79 P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly
characterized it, "the question as to whether incorporation is for the best interest of the
community in any case is emphatically a question of public policy and statecraft" (In re Village
of North Milwaukee, 67 N.W. 1033, 1035-1037).

For this reason, courts of justice have annulled, as constituting undue delegation of legislative
powers, state laws granting the judicial department, the power to determine whether certain
territories should be annexed to a particular municipality (Udall vs. Severn, supra, 258-359); or
vesting in a Commission the right to determine the plan and frame of government of proposed
villages and what functions shall be exercised by the same, although the powers and functions of
the village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or
conferring upon courts the authority to declare a given town or village incorporated, and
designate its metes and bounds, upon petition of a majority of the taxable inhabitants thereof,
setting forth the area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 23
Pac. 405-409); or authorizing the territory of a town, containing a given area and population, to
be incorporated as a town, on certain steps being taken by the inhabitants thereof and on certain
determination by a court and subsequent vote of the inhabitants in favor thereof, insofar as the
court is allowed to determine whether the lands embraced in the petition "ought justly" to be
included in the village, and whether the interest of the inhabitants will be promoted by such
incorporation, and to enlarge and diminish the boundaries of the proposed village "as justice may
require" (In re Villages of North Milwaukee, 67 N.W. 1035-1037); or creating a Municipal
Board of Control which shall determine whether or not the laying out, construction or operation
of a toll road is in the "public interest" and whether the requirements of the law had been
complied with, in which case the board shall enter an order creating a municipal corporation and
fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority,
74 S.E. 2d. 310).

Insofar as the validity of a delegation of power by Congress to the President is concerned, the
case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at
bar. The Schechter case involved the constitutionality of Section 3 of the National Industrial
Recovery Act authorizing the President of the United States to approve "codes of fair
competition" submitted to him by one or more trade or industrial associations or corporations
which "impose no inequitable restrictions on admission to membership therein and are truly
representative," provided that such codes are not designed "to promote monopolies or to
eliminate or oppress small enterprises and will not operate to discriminate against them, and will
tend to effectuate the policy" of said Act. The Federal Supreme Court held:

To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without
precedent. It supplies no standards for any trade, industry or activity. It does not
undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For that legislative
undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims of
rehabilitation, correction and expansion described in Sec. 1. In view of the scope of that
broad declaration, and of the nature of the few restrictions that are imposed, the discretion
of the President in approving or prescribing codes, and thus enacting laws for the
government of trade and industry throughout the country, is virtually unfettered. We
think that the code making authority thus conferred is an unconstitutional delegation of
legislative power.

If the term "unfair competition" is so broad as to vest in the President a discretion that is
"virtually unfettered." and, consequently, tantamount to a delegation of legislative power, it is
obvious that "public welfare," which has even a broader connotation, leads to the same result. In
fact, if the validity of the delegation of powers made in Section 68 were upheld, there would no
longer be any legal impediment to a statutory grant of authority to the President to do anything
which, in his opinion, may be required by public welfare or public interest. Such grant of
authority would be a virtual abdication of the powers of Congress in favor of the Executive, and
would bring about a total collapse of the democratic system established by our Constitution,
which it is the special duty and privilege of this Court to uphold.

It may not be amiss to note that the executive orders in question were issued after the legislative
bills for the creation of the municipalities involved in this case had failed to pass Congress. A
better proof of the fact that the issuance of said executive orders entails the exercise of purely
legislative functions can hardly be given.

Again, Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all local governments as may be provided by law, and
take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to interfere in the
exercise of such discretion as may be vested by law in the officers of the executive departments,
bureaus, or offices of the national government, as well as to act in lieu of such officers. This
power is denied by the Constitution to the Executive, insofar as local governments are
concerned. With respect to the latter, the fundamental law permits him to wield no more
authority than that of checking whether said local governments or the officers thereof perform
their duties as provided by statutory enactments. Hence, the President cannot interfere with local
governments, so long as the same or its officers act Within the scope of their authority. He may
not enact an ordinance which the municipal council has failed or refused to pass, even if it had
thereby violated a duty imposed thereto by law, although he may see to it that the corresponding
provincial officials take appropriate disciplinary action therefor. Neither may he vote, set aside
or annul an ordinance passed by said council within the scope of its jurisdiction, no matter how
patently unwise it may be. He may not even suspend an elective official of a regular municipality
or take any disciplinary action against him, except on appeal from a decision of the
corresponding provincial board.5

Upon the other hand if the President could create a municipality, he could, in effect, remove any
of its officials, by creating a new municipality and including therein the barrio in which the
official concerned resides, for his office would thereby become vacant.6 Thus, by merely
brandishing the power to create a new municipality (if he had it), without actually creating it, he
could compel local officials to submit to his dictation, thereby, in effect, exercising over them the
power of control denied to him by the Constitution.

Then, also, the power of control of the President over executive departments, bureaus or offices
implies no more than the authority to assume directly the functions thereof or to interfere in the
exercise of discretion by its officials. Manifestly, such control does not include the authority
either to abolish an executive department or bureau, or to create a new one. As a consequence,
the alleged power of the President to create municipal corporations would necessarily connote
the exercise by him of an authority even greater than that of control which he has over the
executive departments, bureaus or offices. In other words, Section 68 of the Revised
Administrative Code does not merely fail to comply with the constitutional mandate above
quoted. Instead of giving the President less power over local governments than that vested in him
over the executive departments, bureaus or offices, it reverses the process and does the exact
opposite, by conferring upon him more power over municipal corporations than that which he
has over said executive departments, bureaus or offices.
In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said
Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be
deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly
incompatible and inconsistent with said statutory enactment.7

There are only two (2) other points left for consideration, namely, respondent's claim (a) that
"not all the proper parties" referring to the officers of the newly created municipalities
"have been impleaded in this case," and (b) that "the present petition is premature."

As regards the first point, suffice it to say that the records do not show, and the parties do not
claim, that the officers of any of said municipalities have been appointed or elected and assumed
office. At any rate, the Solicitor General, who has appeared on behalf of respondent Auditor
General, is the officer authorized by law "to act and represent the Government of the Philippines,
its offices and agents, in any official investigation, proceeding or matter requiring the services of
a lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of
the aforementioned municipalities, which involves a political, not proprietary, function, said
local officials, if any, are mere agents or representatives of the national government. Their
interest in the case at bar has, accordingly, been, in effect, duly represented.8

With respect to the second point, respondent alleges that he has not as yet acted on any of the
executive order & in question and has not intimated how he would act in connection therewith. It
is, however, a matter of common, public knowledge, subject to judicial cognizance, that the
President has, for many years, issued executive orders creating municipal corporations and that
the same have been organized and in actual operation, thus indicating, without peradventure of
doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit
by the General Auditing Office and its officials. There is no reason to believe, therefore, that
respondent would adopt a different policy as regards the new municipalities involved in this
case, in the absence of an allegation to such effect, and none has been made by him.

WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and
the respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities above
referred to. It is so ordered.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.

Zaldivar, J., took no part.

Separate Opinions

BENGZON, J.P., J., concurring and dissenting:


A sign of progress in a developing nation is the rise of new municipalities. Fostering their rapid
growth has long been the aim pursued by all three branches of our Government.

So it was that the Governor-General during the time of the Jones Law was given authority by the
Legislature (Act No. 1748) to act upon certain details with respect to said local governments,
such as fixing of boundaries, subdivisions and mergers. And the Supreme Court, within the
framework of the Jones Law, ruled in 1917 that the execution or implementation of such details,
did not entail abdication of legislative power (Government vs. Municipality of Binagonan, 34
Phil. 518; Municipality of Cardona vs. Municipality of Binagonan, 36 Phil. 547). Subsequently,
Act No. 1748's aforesaid statutory authorization was embodied in Section 68 of the Revised
Administrative Code. And Chief Executives since then up to the present continued to avail of
said provision, time and again invoking it to issue executive orders providing for the creation of
municipalities.

From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive
orders to create thirty-three municipalities pursuant to Section 68 of the Revised Administrative
Code. Public funds thereby stood to be disbursed in implementation of said executive orders.

Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this Court a
petition for prohibition with preliminary injunction against the Auditor General. It seeks to
restrain the respondent or any person acting in his behalf, from passing in audit any expenditure
of public funds in implementation of the executive orders aforementioned.

Petitioner contends that the President has no power to create a municipality by executive order. It
is argued that Section 68 of the Revised Administrative Code of 1917, so far as it purports to
grant any such power, is invalid or, at the least, already repealed, in light of the Philippine
Constitution and Republic Act 2370 (The Barrio Charter).

Section 68 is again reproduced hereunder for convenience:

SEC. 68. General authority of [Governor-General) President of the Philippines to fix


boundaries and make new subdivisions. The [Governor-General] President of the
Philippines may by executive order define the boundary, or boundaries, of any province,
subprovince, municipality, [township] municipal district, or other political subdivision,
and increase or diminish the territory comprised therein, may divide any province into
one or more subprovinces, separate any political division other than a province, into such
portions as may be required, merge any of such subdivisions or portions with another,
name any new subdivision so created, and may change the seat of government within any
subdivision to such place therein as the public welfare may require: Provided, That the
authorization of the [Philippine Legislature] Congress of the Philippines shall first be
obtained whenever the boundary of any province or subprovince is to be defined or any
province is to be divided into one or more subprovinces. When action by the [Governor-
General] President of the Philippines in accordance herewith makes necessary a change
of the territory under the jurisdiction of any administrative officer or any judicial officer,
the [Governor-General] President of the Philippines, with the recommendation and
advice of the head of the Department having executive control of such officer, shall
redistrict the territory of the several officers to the new districts so formed.

Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions thereby
affected shall be made in such manner as may be recommended by the [Insular Auditor]
Auditor General and approved by the [Governor-General] President of the Philippines.

From such working I believe that power to create a municipality is included: to "separate any
political division other than a province, into such portions as may be required, merge any such
subdivisions or portions with another, name any new subdivision so created." The issue,
however, is whether the legislature can validly delegate to the Executive such power.

The power to create a municipality is legislative in character. American authorities have


therefore favored the view that it cannot be delegated; that what is delegable is not the power to
create municipalities but only the power to determine the existence of facts under which creation
of a municipality will result (37 Am. Jur. 628).

The test is said to lie in whether the statute allows any discretion on the delegate as to whether
the municipal corporation should be created. If so, there is an attempted delegation of legislative
power and the statute is invalid (Ibid.). Now Section 68 no doubt gives the President such
discretion, since it says that the President "may by executive order" exercise the powers therein
granted. Furthermore, Section 5 of the same Code states:

SEC. 5. Exercise of administrative discretion The exercise of the permissive powers of


all executive or administrative officers and bodies is based upon discretion, and when
such officer or body is given authority to do any act but not required to do such act, the
doing of the same shall be dependent on a sound discretion to be exercised for the good
of the service and benefit of the public, whether so expressed in the statute giving the
authority or not.

Under the prevailing rule in the United States and Section 68 is of American origin the
provision in question would be an invalid attempt to delegate purely legislative powers, contrary
to the principle of separation of powers.

It is very pertinent that Section 68 should be considered with the stream of history in mind. A
proper knowledge of the past is the only adequate background for the present. Section 68 was
adopted half a century ago. Political change, two world wars, the recognition of our
independence and rightful place in the family of nations, have since taken place. In 1917 the
Philippines had for its Organic Act the Jones Law. And under the setup ordained therein no strict
separation of powers was adhered to. Consequently, Section 68 was not constitutionally
objectionable at the time of its enactment.

The advent of the Philippine Constitution in 1935 however altered the situation. For not only was
separation of powers strictly ordained, except only in specific instances therein provided, but the
power of the Chief Executive over local governments suffered an explicit reduction.
Formerly, Section 21 of the Jones Law provided that the Governor-General "shall have general
supervision and control of all the departments and bureaus of the government in the Philippine
Islands." Now Section 10 (1), Article VII of the Philippine Constitution provides: "The President
shall have control of all the executive departments, bureaus, or offices, exercise general
supervision over all local governments as may be provided by law, and take care that the laws be
faithfully executed.

In short, the power of control over local governments had now been taken away from the Chief
Executive. Again, to fully understand the significance of this provision, one must trace its
development and growth.

As early as April 7, 1900 President McKinley of the United States, in his Instructions to the
Second Philippine Commission, laid down the policy that our municipal governments should be
"subject to the least degree of supervision and control" on the part of the national government.
Said supervision and control was to be confined within the "narrowest limits" or so much only as
"may be necessary to secure and enforce faithful and efficient administration by local officers."
And the national government "shall have no direct administration except of matters of purely
general concern." (See Hebron v. Reyes, L-9158, July 28, 1958.)

All this had one aim, to enable the Filipinos to acquire experience in the art of self-government,
with the end in view of later allowing them to assume complete management and control of the
administration of their local affairs. Such aim is the policy now embodied in Section 10 (1),
Article VII of the Constitution (Rodriguez v. Montinola, 50 O.G. 4820).

It is the evident decree of the Constitution, therefore, that the President shall have no power of
control over local governments. Accordingly, Congress cannot by law grant him such power
(Hebron v. Reyes, supra). And any such power formerly granted under the Jones Law thereby
became unavoidably inconsistent with the Philippine Constitution.

It remains to examine the relation of the power to create and the power to control local
governments. Said relationship has already been passed upon by this Court in Hebron v. Reyes,
supra. In said case, it was ruled that the power to control is an incident of the power to create or
abolish municipalities. Respondent's view, therefore, that creating municipalities and controlling
their local governments are "two worlds apart," is untenable. And since as stated, the power to
control local governments can no longer be conferred on or exercised by the President, it follows
a fortiori that the power to create them, all the more cannot be so conferred or exercised.

I am compelled to conclude, therefore, that Section 10 (1), Article VII of the Constitution has
repealed Section 68 of the Revised Administrative Code as far as the latter empowers the
President to create local governments. Repeal by the Constitution of prior statutes inconsistent
with it has already been sustained in De los Santos v. MaIlare, 87 Phil. 289. And it was there
held that such repeal differs from a declaration of unconstitutionality of a posterior legislation, so
much so that only a majority vote of the Court is needed to sustain a finding of repeal.

Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask whether
Republic Act 2370 likewise has provisions in conflict with Section 68 so as to repeal it. Suffice it
to state, at any rate, that statutory prohibition on the President from creating a barrio does not, in
my opinion, warrant the inference of statutory prohibition for creating a municipality. For
although municipalities consist of barrios, there is nothing in the statute that would preclude
creation of new municipalities out of pre-existing barrios.

It is not contrary to the logic of local autonomy to be able to create larger political units and
unable to create smaller ones. For as long ago observed in President McKinley's Instructions to
the Second Philippine Commission, greater autonomy is to be imparted to the smaller of the two
political units. The smaller the unit of local government, the lesser is the need for the national
government's intervention in its political affairs. Furthermore, for practical reasons, local
autonomy cannot be given from the top downwards. The national government, in such a case,
could still exercise power over the supposedly autonomous unit, e.g., municipalities, by
exercising it over the smaller units that comprise them, e.g., the barrios. A realistic program of
decentralization therefore calls for autonomy from the bottom upwards, so that it is not
surprising for Congress to deny the national government some power over barrios without
denying it over municipalities. For this reason, I disagree with the majority view that because the
President could not create a barrio under Republic Act 2370, a fortiori he cannot create a
municipality.

It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed Section 68 of
the Revised Administrative Code's provision giving the President authority to create local
governments. And for this reason I agree with the ruling in the majority opinion that the
executive orders in question are null and void.

In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be free and
independent under a republican form of government, and exercising a function derived from the
very sovereignty that it upholds. Executive orders declared null and void.

Makalintal and Regala, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-45685 November 16, 1937

THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG & SHANGHAI


BANKING CORPORATION, petitioners,
vs.
JOSE O. VERA, Judge . of the Court of First Instance of Manila, and MARIANO CU
UNJIENG, respondents.

Office of the Solicitor General Tuason and City Fiscal Diaz for the Government.
De Witt, Perkins and Ponce Enrile for the Hongkong and Shanghai Banking Corporation.
Vicente J. Francisco, Feria and La O, Orense and Belmonte, and Gibbs and McDonough for
respondent Cu Unjieng.
No appearance for respondent Judge.

LAUREL, J.:

This is an original action instituted in this court on August 19, 1937, for the issuance of the writ
of certiorari and of prohibition to the Court of First Instance of Manila so that this court may
review the actuations of the aforesaid Court of First Instance in criminal case No. 42649 entitled
"The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", more particularly the
application of the defendant Mariano Cu Unjieng therein for probation under the provisions of
Act No. 4221, and thereafter prohibit the said Court of First Instance from taking any further
action or entertaining further the aforementioned application for probation, to the end that the
defendant Mariano Cu Unjieng may be forthwith committed to prison in accordance with the
final judgment of conviction rendered by this court in said case (G. R. No. 41200). 1
Petitioners herein, the People of the Philippine and the Hongkong and Shanghai Banking Corporation, are respectively the plaintiff and the
offended party, and the respondent herein Mariano Cu Unjieng is one of the defendants, in the criminal case entitled "The People of the
Philippine Islands vs. Mariano Cu Unjieng, et al.", criminal case No. 42649 of the Court of First Instance of Manila and G.R. No. 41200 of this
court. Respondent herein, Hon. Jose O. Vera, is the Judge ad interim of the seventh branch of the Court of First Instance of Manila, who
heard the application of the defendant Mariano Cu Unjieng for probation in the aforesaid criminal case.

The information in the aforesaid criminal case was filed with the Court of First Instance of Manila on October 15, 1931, petitioner herein
Hongkong and Shanghai Banking Corporation intervening in the case as private prosecutor. After a protracted trial unparalleled in the annals
of Philippine jurisprudence both in the length of time spent by the court as well as in the volume in the testimony and the bulk of the exhibits
presented, the Court of First Instance of Manila, on January 8, 1934, rendered a judgment of conviction sentencing the defendant Mariano
Cu Unjieng to indeterminate penalty ranging from four years and two months of prision correccional to eight years of prision mayor, to pay
the costs and with reservation of civil action to the offended party, the Hongkong and Shanghai Banking Corporation. Upon appeal, the court,
on March 26, 1935, modified the sentence to an indeterminate penalty of from five years and six months of prision correccional to seven
years, six months and twenty-seven days of prision mayor, but affirmed the judgment in all other respects. Mariano Cu Unjieng filed a motion
for reconsideration and four successive motions for new trial which were denied on December 17, 1935, and final judgment was accordingly
entered on December 18, 1935. The defendant thereupon sought to have the case elevated on certiorari to the Supreme Court of the United
States but the latter denied the petition for certiorari in November, 1936. This court, on November 24, 1936, denied the
petition subsequently filed by the defendant for leave to file a second alternative motion for reconsideration or new trial and thereafter
remanded the case to the court of origin for execution of the judgment.

The instant proceedings have to do with the application for probation filed by the herein respondent Mariano Cu Unjieng on
November 27, 1936, before the trial court, under the provisions of Act No. 4221 of the defunct Philippine Legislature. Herein respondent
Mariano Cu Unjieng states in his petition, inter alia, that he is innocent of the crime of which he was convicted, that he has no criminal record
and that he would observe good conduct in the future. The Court of First Instance of Manila, Judge Pedro Tuason presiding, referred the
application for probation of the Insular Probation Office which recommended denial of the same June 18, 1937. Thereafter, the Court of First
Instance of Manila, seventh branch, Judge Jose O. Vera presiding, set the petition for hearing on April 5, 1937.

On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the herein respondent Mariano Cu Unjieng.
The private prosecution also filed an opposition on April 5, 1937, alleging, among other things, that Act No. 4221, assuming that it has not
been repealed by section 2 of Article XV of the Constitution, is nevertheless violative of section 1, subsection (1), Article III of the Constitution
guaranteeing equal protection of the laws for the reason that its applicability is not uniform throughout the Islands and because section 11 of
the said Act endows the provincial boards with the power to make said law effective or otherwise in their respective or otherwise in their
respective provinces. The private prosecution also filed a supplementary opposition on April 19, 1937, elaborating on the alleged
unconstitutionality on Act No. 4221, as an undue delegation of legislative power to the provincial boards of several provinces (sec. 1, Art. VI,
Constitution). The City Fiscal concurred in the opposition of the private prosecution except with respect to the questions raised concerning
the constitutionality of Act No. 4221.

On June 28, 1937, herein respondent Judge Jose O. Vera promulgated a resolution with a finding that "las pruebas no han establecido de
unamanera concluyente la culpabilidad del peticionario y que todos los hechos probados no son inconsistentes o incongrentes con su
inocencia" and concludes that the herein respondent Mariano Cu Unjieng "es inocente por duda racional" of the crime of which he stands
convicted by this court in G.R. No. 41200, but denying the latter's petition for probation for the reason that:
. . . Si este Juzgado concediera la poblacion solicitada por las circunstancias y la historia social que se han expuesto en el cuerpo
de esta resolucion, que hacen al peticionario acreedor de la misma, una parte de la opinion publica, atizada por los recelos y las
suspicacias, podria levantarse indignada contra un sistema de probacion que permite atisbar en los procedimientos ordinarios de
una causa criminal perturbando la quietud y la eficacia de las decisiones ya recaidas al traer a la superficie conclusiones
enteramente differentes, en menoscabo del interes publico que demanda el respeto de las leyes y del veredicto judicial.

On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng filed an exception to the resolution denying probation and a notice of
intention to file a motion for reconsideration. An alternative motion for reconsideration or new trial was filed by counsel on July 13, 1937. This
was supplemented by an additional motion for reconsideration submitted on July 14, 1937. The aforesaid motions were set for hearing on
July 31, 1937, but said hearing was postponed at the petition of counsel for the respondent Mariano Cu Unjieng because a motion for leave
to intervene in the case as amici curiae signed by thirty-three (thirty-four) attorneys had just been filed with the trial court. Attorney Eulalio
Chaves whose signature appears in the aforesaid motion subsequently filed a petition for leave to withdraw his appearance as amicus curiae
on the ground that the motion for leave to intervene as amici curiae was circulated at a banquet given by counsel for Mariano Cu Unjieng on
the evening of July 30, 1937, and that he signed the same "without mature deliberation and purely as a matter of courtesy to the person who
invited me (him)."

On August 6, 1937, the Fiscal of the City of Manila filed a motion with the trial court for the issuance of an order of execution of the judgment
of this court in said case and forthwith to commit the herein respondent Mariano Cu Unjieng to jail in obedience to said judgment.

On August 7, 1937, the private prosecution filed its opposition to the motion for leave to intervene as amici curiae aforementioned, asking
that a date be set for a hearing of the same and that, at all events, said motion should be denied with respect to certain attorneys signing the
same who were members of the legal staff of the several counsel for Mariano Cu Unjieng. On August 10, 1937, herein respondent Judge
Jose O. Vera issued an order requiring all parties including the movants for intervention as amici curiae to appear before the court on August
14, 1937. On the last-mentioned date, the Fiscal of the City of Manila moved for the hearing of his motion for execution of judgment in
preference to the motion for leave to intervene as amici curiae but, upon objection of counsel for Mariano Cu Unjieng, he moved for the
postponement of the hearing of both motions. The respondent judge thereupon set the hearing of the motion for execution on August 21,
1937, but proceeded to consider the motion for leave to intervene as amici curiae as in order. Evidence as to the circumstances under which
said motion for leave to intervene as amici curiae was signed and submitted to court was to have been heard on August 19, 1937. But at this
juncture, herein petitioners came to this court on extraordinary legal process to put an end to what they alleged was an interminable
proceeding in the Court of First Instance of Manila which fostered "the campaign of the defendant Mariano Cu Unjieng for delay in the
execution of the sentence imposed by this Honorable Court on him, exposing the courts to criticism and ridicule because of the apparent
inability of the judicial machinery to make effective a final judgment of this court imposed on the defendant Mariano Cu Unjieng."

The scheduled hearing before the trial court was accordingly suspended upon the issuance of a temporary restraining order by this court on
August 21, 1937.

To support their petition for the issuance of the extraordinary writs of certiorari and prohibition, herein petitioners allege that the respondent
judge has acted without jurisdiction or in excess of his jurisdiction:

I. Because said respondent judge lacks the power to place respondent Mariano Cu Unjieng under probation for the following reason:

(1) Under section 11 of Act No. 4221, the said of the Philippine Legislature is made to apply only to the provinces of the
Philippines; it nowhere states that it is to be made applicable to chartered cities like the City of Manila.

(2) While section 37 of the Administrative Code contains a proviso to the effect that in the absence of a special
provision, the term "province" may be construed to include the City of Manila for the purpose of giving effect to laws of
general application, it is also true that Act No. 4221 is not a law of general application because it is made to apply only
to those provinces in which the respective provincial boards shall have provided for the salary of a probation officer.

(3) Even if the City of Manila were considered to be a province, still, Act No. 4221 would not be applicable to it because
it has provided for the salary of a probation officer as required by section 11 thereof; it being immaterial that there is an
Insular Probation Officer willing to act for the City of Manila, said Probation Officer provided for in section 10 of Act No.
4221 being different and distinct from the Probation Officer provided for in section 11 of the same Act.

II. Because even if the respondent judge originally had jurisdiction to entertain the application for probation of the respondent Mariano Cu
Unjieng, he nevertheless acted without jurisdiction or in excess thereof in continuing to entertain the motion for reconsideration and by failing
to commit Mariano Cu Unjieng to prison after he had promulgated his resolution of June 28, 1937, denying Mariano Cu Unjieng's application
for probation, for the reason that:

(1) His jurisdiction and power in probation proceedings is limited by Act No. 4221 to the granting or denying of
applications for probation.

(2) After he had issued the order denying Mariano Cu Unjieng's petition for probation on June 28, 1937, it became final
and executory at the moment of its rendition.

(3) No right on appeal exists in such cases.


(4) The respondent judge lacks the power to grant a rehearing of said order or to modify or change the same.

III. Because the respondent judge made a finding that Mariano Cu Unjieng is innocent of the crime for which he was convicted by final
judgment of this court, which finding is not only presumptuous but without foundation in fact and in law, and is furthermore in contempt of this
court and a violation of the respondent's oath of office as ad interim judge of first instance.

IV. Because the respondent judge has violated and continues to violate his duty, which became imperative when he issued his order of June
28, 1937, denying the application for probation, to commit his co-respondent to jail.

Petitioners also avers that they have no other plain, speedy and adequate remedy in the ordinary course of law.

In a supplementary petition filed on September 9, 1937, the petitioner Hongkong and Shanghai Banking Corporation further contends that
Act No. 4221 of the Philippine Legislature providing for a system of probation for persons eighteen years of age or over who are convicted of
crime, is unconstitutional because it is violative of section 1, subsection (1), Article III, of the Constitution of the Philippines guaranteeing
equal protection of the laws because it confers upon the provincial board of its province the absolute discretion to make said law operative or
otherwise in their respective provinces, because it constitutes an unlawful and improper delegation to the provincial boards of the several
provinces of the legislative power lodged by the Jones Law (section 8) in the Philippine Legislature and by the Constitution (section 1, Art. VI)
in the National Assembly; and for the further reason that it gives the provincial boards, in contravention of the Constitution (section 2, Art.
VIII) and the Jones Law (section 28), the authority to enlarge the powers of the Court of First Instance of different provinces without
uniformity. In another supplementary petition dated September 14, 1937, the Fiscal of the City of Manila, in behalf of one of the petitioners,
the People of the Philippine Islands, concurs for the first time with the issues raised by other petitioner regarding the constitutionality of Act
No. 4221, and on the oral argument held on October 6, 1937, further elaborated on the theory that probation is a form of reprieve and
therefore Act. No. 4221 is an encroachment on the exclusive power of the Chief Executive to grant pardons and reprieves. On October 7,
1937, the City Fiscal filed two memorandums in which he contended that Act No. 4221 not only encroaches upon the pardoning power to the
executive, but also constitute an unwarranted delegation of legislative power and a denial of the equal protection of the laws. On October 9,
1937, two memorandums, signed jointly by the City Fiscal and the Solicitor-General, acting in behalf of the People of the Philippine Islands,
and by counsel for the petitioner, the Hongkong and Shanghai Banking Corporation, one sustaining the power of the state to impugn the
validity of its own laws and the other contending that Act No. 4221 constitutes an unwarranted delegation of legislative power, were
presented. Another joint memorandum was filed by the same persons on the same day, October 9, 1937, alleging that Act No. 4221 is
unconstitutional because it denies the equal protection of the laws and constitutes an unlawful delegation of legislative power and, further,
that the whole Act is void: that the Commonwealth is not estopped from questioning the validity of its laws; that the private prosecution may
intervene in probation proceedings and may attack the probation law as unconstitutional; and that this court may pass upon the constitutional
question in prohibition proceedings.

Respondents in their answer dated August 31, 1937, as well as in their oral argument and memorandums, challenge each and every one of
the foregoing proposition raised by the petitioners.

As special defenses, respondents allege:

(1) That the present petition does not state facts sufficient in law to warrant the issuance of the writ of certiorari or of
prohibition.

(2) That the aforesaid petition is premature because the remedy sought by the petitioners is the very same remedy
prayed for by them before the trial court and was still pending resolution before the trial court when the present petition
was filed with this court.

(3) That the petitioners having themselves raised the question as to the execution of judgment before the trial court,
said trial court has acquired exclusive jurisdiction to resolve the same under the theory that its resolution denying
probation is unappealable.

(4) That upon the hypothesis that this court has concurrent jurisdiction with the Court of First Instance to decide the
question as to whether or not the execution will lie, this court nevertheless cannot exercise said jurisdiction while the
Court of First Instance has assumed jurisdiction over the same upon motion of herein petitioners themselves.

(5) That upon the procedure followed by the herein petitioners in seeking to deprive the trial court of its jurisdiction over
the case and elevate the proceedings to this court, should not be tolerated because it impairs the authority and dignity
of the trial court which court while sitting in the probation cases is "a court of limited jurisdiction but of great dignity."

(6) That under the supposition that this court has jurisdiction to resolve the question submitted to and pending
resolution by the trial court, the present action would not lie because the resolution of the trial court denying probation
is appealable; for although the Probation Law does not specifically provide that an applicant for probation may appeal
from a resolution of the Court of First Instance denying probation, still it is a general rule in this jurisdiction that a final
order, resolution or decision of an inferior court is appealable to the superior court.

(7) That the resolution of the trial court denying probation of herein respondent Mariano Cu Unjieng being appealable,
the same had not become final and executory for the reason that the said respondent had filed an alternative motion for
reconsideration and new trial within the requisite period of fifteen days, which motion the trial court was able to resolve
in view of the restraining order improvidently and erroneously issued by this court.lawphi1.net

(8) That the Fiscal of the City of Manila had by implication admitted that the resolution of the trial court denying
probation is not final and unappealable when he presented his answer to the motion for reconsideration and agreed to
the postponement of the hearing of the said motion.

(9) That under the supposition that the order of the trial court denying probation is not appealable, it is incumbent upon
the accused to file an action for the issuance of the writ of certiorari with mandamus, it appearing that the trial court,
although it believed that the accused was entitled to probation, nevertheless denied probation for fear of criticism
because the accused is a rich man; and that, before a petition for certiorari grounded on an irregular exercise of
jurisdiction by the trial court could lie, it is incumbent upon the petitioner to file a motion for reconsideration specifying
the error committed so that the trial court could have an opportunity to correct or cure the same.

(10) That on hypothesis that the resolution of this court is not appealable, the trial court retains its jurisdiction within a
reasonable time to correct or modify it in accordance with law and justice; that this power to alter or modify an order or
resolution is inherent in the courts and may be exercise either motu proprio or upon petition of the proper party, the
petition in the latter case taking the form of a motion for reconsideration.

(11) That on the hypothesis that the resolution of the trial court is appealable as respondent allege, said court cannot
order execution of the same while it is on appeal, for then the appeal would not be availing because the doors of
probation will be closed from the moment the accused commences to serve his sentence (Act No. 4221, sec. 1; U.S.
vs. Cook, 19 Fed. [2d], 827).

In their memorandums filed on October 23, 1937, counsel for the respondents maintain that Act No. 4221 is constitutional because, contrary
to the allegations of the petitioners, it does not constitute an undue delegation of legislative power, does not infringe the equal protection
clause of the Constitution, and does not encroach upon the pardoning power of the Executive. In an additional memorandum filed on the
same date, counsel for the respondents reiterate the view that section 11 of Act No. 4221 is free from constitutional objections and contend,
in addition, that the private prosecution may not intervene in probation proceedings, much less question the validity of Act No. 4221; that both
the City Fiscal and the Solicitor-General are estopped from questioning the validity of the Act; that the validity of Act cannot be attacked for
the first time before this court; that probation in unavailable; and that, in any event, section 11 of the Act No. 4221 is separable from the rest
of the Act. The last memorandum for the respondent Mariano Cu Unjieng was denied for having been filed out of time but was admitted by
resolution of this court and filed anew on November 5, 1937. This memorandum elaborates on some of the points raised by the
respondents and refutes those brought up by the petitioners.

In the scrutiny of the pleadings and examination of the various aspects of the present case, we noted that the court below, in passing upon
the merits of the application of the respondent Mariano Cu Unjieng and in denying said application assumed the task not only of considering
the merits of the application, but of passing upon the culpability of the applicant, notwithstanding the final pronouncement of guilt by this
court. (G.R. No. 41200.) Probation implies guilt be final judgment. While a probation case may look into the circumstances attending the
commission of the offense, this does not authorize it to reverse the findings and conclusive of this court, either directly or indirectly, especially
wherefrom its own admission reliance was merely had on the printed briefs, averments, and pleadings of the parties. As already observed by
this court in Shioji vs. Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent cases, "if each and every Court of First Instance could
enjoy the privilege of overruling decisions of the Supreme Court, there would be no end to litigation, and judicial chaos would result." A
becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the
intergrated judicial system of the nation.

After threshing carefully the multifarious issues raised by both counsel for the petitioners and the respondents, this court prefers to cut the
Gordian knot and take up at once the two fundamental questions presented, namely, (1) whether or not the constitutionality of Act No. 4221
has been properly raised in these proceedings; and (2) in the affirmative, whether or not said Act is constitutional. Considerations of these
issues will involve a discussion of certain incidental questions raised by the parties.

To arrive at a correct conclusion on the first question, resort to certain guiding principles is necessary. It is a well-settled rule that the
constitutionality of an act of the legislature will not be determined by the courts unless that question is properly raised and presented
inappropriate cases and is necessary to a determination of the case; i.e., the issue of constitutionality must be the very lis mota presented.
(McGirr vs. Hamilton and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780-782, 783.)

The question of the constitutionality of an act of the legislature is frequently raised in ordinary actions. Nevertheless, resort may be made to
extraordinary legal remedies, particularly where the remedies in the ordinary course of law even if available, are not plain, speedy and
adequate. Thus, in Cu Unjieng vs. Patstone ([1922]), 42 Phil., 818), this court held that the question of the constitutionality of a statute may
be raised by the petitioner in mandamus proceedings (see, also, 12 C. J., p. 783); and in Government of the Philippine Islands vs. Springer
([1927], 50 Phil., 259 [affirmed in Springer vs. Government of the Philippine Islands (1928), 277 U. S., 189; 72 Law. ed., 845]), this court
declared an act of the legislature unconstitutional in an action of quo warranto brought in the name of the Government of the Philippines. It
has also been held that the constitutionality of a statute may be questioned in habeas corpus proceedings (12 C. J., p. 783; Bailey on
Habeas Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on an application for injunction to restrain action under the
challenged statute (mandatory, see Cruz vs. Youngberg [1931], 56 Phil., 234); and even on an application for preliminary injunction where
the determination of the constitutional question is necessary to a decision of the case. (12 C. J., p. 783.) The same may be said as regards
prohibition and certiorari.(Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial
District Court [1905], 28 Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6 Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited). The case of Yu
Cong Eng vs. Trinidad, supra, decided by this court twelve years ago was, like the present one, an original action for certiorari and
prohibition. The constitutionality of Act No. 2972, popularly known as the Chinese Bookkeeping Law, was there challenged by the petitioners,
and the constitutional issue was not met squarely by the respondent in a demurrer. A point was raised "relating to the propriety of the
constitutional question being decided in original proceedings in prohibition." This court decided to take up the constitutional question and,
with two justices dissenting, held that Act No. 2972 was constitutional. The case was elevated on writ of certiorari to the Supreme Court of
the United States which reversed the judgment of this court and held that the Act was invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the
question of jurisdiction, however, the Federal Supreme Court, though its Chief Justice, said:

By the Code of Civil Procedure of the Philippine Islands, section 516, the Philippine supreme court is granted concurrent
jurisdiction in prohibition with courts of first instance over inferior tribunals or persons, and original jurisdiction over courts of first
instance, when such courts are exercising functions without or in excess of their jurisdiction. It has been held by that court that the
question of the validity of the criminal statute must usually be raised by a defendant in the trial court and be carried regularly in
review to the Supreme Court. (Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192). But in this case where a new act
seriously affected numerous persons and extensive property rights, and was likely to cause a multiplicity of actions, the Supreme
Court exercised its discretion to bring the issue to the act's validity promptly before it and decide in the interest of the orderly
administration of justice. The court relied by analogy upon the cases of Ex parte Young (209 U. S., 123;52 Law ed., 714; 13 L. R.
A. [N. S.] 932; 28 Sup. Ct. Rep., 441; 14 Ann. Ca., 764; Traux vs. Raich, 239 U. S., 33; 60 Law. ed., 131; L. R. A. 1916D, 545; 36
Sup. Ct. Rep., 7; Ann. Cas., 1917B, 283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed., 755; L. R. A. 1917E, 938; 37 Sup. Ct.
Rep., 298; Ann. Cas. 1918A, 1024). Although objection to the jurisdiction was raise by demurrer to the petition, this is now
disclaimed on behalf of the respondents, and both parties ask a decision on the merits. In view of the broad powers in prohibition
granted to that court under the Island Code, we acquiesce in the desire of the parties.

The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and directed to an inferior court, for the
purpose of preventing the inferior tribunal from usurping a jurisdiction with which it is not legally vested. (High, Extraordinary Legal Remedies,
p. 705.) The general rule, although there is a conflict in the cases, is that the merit of prohibition will not lie whether the inferior court has
jurisdiction independent of the statute the constitutionality of which is questioned, because in such cases the interior court having jurisdiction
may itself determine the constitutionality of the statute, and its decision may be subject to review, and consequently the complainant in such
cases ordinarily has adequate remedy by appeal without resort to the writ of prohibition. But where the inferior court or tribunal derives its
jurisdiction exclusively from an unconstitutional statute, it may be prevented by the writ of prohibition from enforcing that statute. (50 C. J.,
670; Ex parte Round tree [1874, 51 Ala., 42; In re Macfarland, 30 App. [D. C.], 365; Curtis vs. Cornish [1912], 109 Me., 384; 84 A., 799;
Pennington vs. Woolfolk [1880], 79 Ky., 13; State vs. Godfrey [1903], 54 W. Va., 54; 46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30
Am. Dec., 669.)

Courts of First Instance sitting in probation proceedings derived their jurisdiction solely from Act No. 4221 which prescribes in detailed
manner the procedure for granting probation to accused persons after their conviction has become final and before they have served their
sentence. It is true that at common law the authority of the courts to suspend temporarily the execution of the sentence is recognized and,
according to a number of state courts, including those of Massachusetts, Michigan, New York, and Ohio, the power is inherent in the courts
(Commonwealth vs. Dowdican's Bail [1874], 115 Mass., 133; People vs. Stickel [1909], 156 Mich., 557; 121 N. W., 497; People ex rel.
Forsyth vs. Court of Session [1894], 141 N. Y., 288; Weber vs. State [1898], 58 Ohio St., 616). But, in the leading case of Ex parte United
States ([1916], 242 U. S., 27; 61 Law. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355), the Supreme Court of
the United States expressed the opinion that under the common law the power of the court was limited to temporary suspension, and
brushed aside the contention as to inherent judicial power saying, through Chief Justice White:

Indisputably under our constitutional system the right to try offenses against the criminal laws and upon conviction to impose the
punishment provided by law is judicial, and it is equally to be conceded that, in exerting the powers vested in them on such
subject, courts inherently possess ample right to exercise reasonable, that is, judicial, discretion to enable them to wisely exert
their authority. But these concessions afford no ground for the contention as to power here made, since it must rest upon the
proposition that the power to enforce begets inherently a discretion to permanently refuse to do so. And the effect of the
proposition urged upon the distribution of powers made by the Constitution will become apparent when it is observed that
indisputable also is it that the authority to define and fix the punishment for crime is legislative and includes the right in advance to
bring within judicial discretion, for the purpose of executing the statute, elements of consideration which would be otherwise
beyond the scope of judicial authority, and that the right to relieve from the punishment, fixed by law and ascertained according to
the methods by it provided belongs to the executive department.

Justice Carson, in his illuminating concurring opinion in the case of Director of Prisons vs. Judge of First Instance of Cavite (29 Phil., 265),
decided by this court in 1915, also reached the conclusion that the power to suspend the execution of sentences pronounced in criminal
cases is not inherent in the judicial function. "All are agreed", he said, "that in the absence of statutory authority, it does not lie within the
power of the courts to grant such suspensions." (at p. 278.) Both petitioner and respondents are correct, therefore, when they argue that a
Court of First Instance sitting in probation proceedings is a court of limited jurisdiction. Its jurisdiction in such proceedings is conferred
exclusively by Act No. 4221 of the Philippine Legislature.

It is, of course, true that the constitutionality of a statute will not be considered on application for prohibition where the question has not been
properly brought to the attention of the court by objection of some kind (Hill vs. Tarver [1901], 130 Ala., 592; 30 S., 499; State ex rel. Kelly vs.
Kirby [1914], 260 Mo., 120; 168 S. W., 746). In the case at bar, it is unquestionable that the constitutional issue has been squarely presented
not only before this court by the petitioners but also before the trial court by the private prosecution. The respondent, Hon. Jose O Vera,
however, acting as judge of the court below, declined to pass upon the question on the ground that the private prosecutor, not being a party
whose rights are affected by the statute, may not raise said question. The respondent judge cited Cooley on Constitutional Limitations (Vol. I,
p. 339; 12 C. J., sec. 177, pp. 760 and 762), and McGlue vs. Essex County ([1916], 225 Mass., 59; 113 N. E., 742, 743), as authority for the
proposition that a court will not consider any attack made on the constitutionality of a statute by one who has no interest in defeating it
because his rights are not affected by its operation. The respondent judge further stated that it may not motu proprio take up the
constitutional question and, agreeing with Cooley that "the power to declare a legislative enactment void is one which the judge, conscious of
the fallibility of the human judgment, will shrink from exercising in any case where he can conscientiously and with due regard to duty and
official oath decline the responsibility" (Constitutional Limitations, 8th ed., Vol. I, p. 332), proceeded on the assumption that Act No. 4221 is
constitutional. While therefore, the court a quo admits that the constitutional question was raised before it, it refused to consider the question
solely because it was not raised by a proper party. Respondents herein reiterates this view. The argument is advanced that the private
prosecution has no personality to appear in the hearing of the application for probation of defendant Mariano Cu Unjieng in criminal case No.
42648 of the Court of First Instance of Manila, and hence the issue of constitutionality was not properly raised in the lower court. Although, as
a general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has been
held that since the decree pronounced by a court without jurisdiction is void, where the jurisdiction of the court depends on the validity of the
statute in question, the issue of the constitutionality will be considered on its being brought to the attention of the court by persons interested
in the effect to be given the statute.(12 C. J., sec. 184, p. 766.) And, even if we were to concede that the issue was not properly raised in the
court below by the proper party, it does not follow that the issue may not be here raised in an original action of certiorari and prohibitions. It is
true that, as a general rule, the question of constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings,
ordinarily it may not be raised at the trial, and if not raised in the trial court, it will not considered on appeal. (12 C. J., p. 786. See, also,
Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions.
Courts, in the exercise of sounds discretion, may determine the time when a question affecting the constitutionality of a statute should be
presented. (In re Woolsey [1884], 95 N. Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said
that the question may be raised for the first time at any stage of the proceedings, either in the trial court or on appeal. (12 C. J., p. 786.) Even
in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though raised for the first time on appeal, if it
appears that a determination of the question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co., [1910],
136 ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage Co. [1908], 214 Mo., 685; 113 S. W. 1108; Carmody vs. St. Louis Transit Co.,
[1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question will be considered by an appellate court at any time,
where it involves the jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to
consider the constitutional question raised for the first time before this court in these proceedings, we turn again and point with emphasis to
the case of Yu Cong Eng vs. Trinidad, supra. And on the hypotheses that the Hongkong & Shanghai Banking Corporation, represented by
the private prosecution, is not the proper party to raise the constitutional question here a point we do not now have to decide we are of
the opinion that the People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party
in the present proceedings. The unchallenged rule is 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 sustained, direct injury as a result of its enforcement. It goes without saying
that if Act No. 4221 really violates the constitution, the People of the Philippines, in whose name the present action is brought, has a
substantial interest in having it set aside. Of grater import than the damage caused by the illegal expenditure of public funds is the mortal
wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge
the validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government
of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action
instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkins ([1889], 73 Mich., 303, 311, 312; 41 N. W. 426, 428,
429), the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the respondents to renew a
mining corporation, alleging that the statute under which the respondents base their right was unconstitutional because it impaired the
obligation of contracts. The capacity of the chief law officer of the state to question the constitutionality of the statute was though, as a
general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has been held
that since the decree pronounced by a court without jurisdiction in void, where the jurisdiction of the court depends on the validity of the
statute in question, the issue of constitutionality will be considered on its being brought to the attention of the court by persons interested in
the effect to begin the statute. (12 C.J., sec. 184, p. 766.) And, even if we were to concede that the issue was not properly raised in the court
below by the proper party, it does not follow that the issue may not be here raised in an original action of certiorari and prohibition. It is true
that, as a general rule, the question of constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings,
ordinarily it may not be raised a the trial, and if not raised in the trial court, it will not be considered on appeal. (12 C.J., p. 786. See, also,
Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions.
Courts, in the exercise of sound discretion, may determine the time when a question affecting the constitutionality of a statute should be
presented. (In re Woolsey [19884], 95 N.Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said
that the question may be raised for the first time at any state of the proceedings, either in the trial court or on appeal. (12 C.J., p. 786.) Even
in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though raised for first time on appeal, if it
appears that a determination of the question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co. [1910],
136 Ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis, Cordage Co. [1908], 214 Mo. 685; 113 S. W., 1108; Carmody vs. St. Louis Transit Co.
[1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question will be considered by an appellate court at any time,
where it involves the jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to
consider the constitutional question raised for the first time before this court in these proceedings, we turn again and point with emphasis to
the case of Yu Cong Eng. vs. Trinidad, supra. And on the hypothesis that the Hongkong & Shanghai Banking Corporation, represented by
the private prosecution, is not the proper party to raise the constitutional question here a point we do not now have to decide we are of
the opinion that the People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party
in the present proceedings. The unchallenged rule is 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. It goes without saying
that if Act No. 4221 really violates the Constitution, the People of the Philippines, in whose name the present action is brought, has a
substantial interest in having it set aside. Of greater import than the damage caused by the illegal expenditure of public funds is the mortal
wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge
the validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government
of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action
instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkings([1889], 73 Mich., 303, 311, 312; 41 N.W., 426,
428, 429), the State of Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the respondents to
renew a mining corporation, alleging that the statute under which the respondents base their right was unconstitutional because it impaired
the obligation of contracts. The capacity of the chief law officer of the state to question the constitutionality of the statute was itself
questioned. Said the Supreme Court of Michigan, through Champlin, J.:

. . . The idea seems to be that the people are estopped from questioning the validity of a law enacted by their representatives; that
to an accusation by the people of Michigan of usurpation their government, a statute enacted by the people of Michigan is an
adequate answer. The last proposition is true, but, if the statute relied on in justification is unconstitutional, it is statute only in form,
and lacks the force of law, and is of no more saving effect to justify action under it than if it had never been enacted. The
constitution is the supreme law, and to its behests the courts, the legislature, and the people must bow . . . The legislature and the
respondents are not the only parties in interest upon such constitutional questions. As was remarked by Mr. Justice Story, in
speaking of an acquiescence by a party affected by an unconstitutional act of the legislature: "The people have a deep and vested
interest in maintaining all the constitutional limitations upon the exercise of legislative powers." (Allen vs. Mckeen, 1 Sum., 314.)

In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original action (mandamus) was brought by the Attorney-General of Kansas
to test the constitutionality of a statute of the state. In disposing of the question whether or not the state may bring the action, the Supreme
Court of Kansas said:

. . . the state is a proper party indeed, the proper party to bring this action. The state is always interested where the integrity
of its Constitution or statutes is involved.

"It has an interest in seeing that the will of the Legislature is not disregarded, and need not, as an individual
plaintiff must, show grounds of fearing more specific injury. (State vs. Kansas City 60 Kan., 518 [57 Pac.,
118])." (State vs. Lawrence, 80 Kan., 707; 103 Pac., 839.)

Where the constitutionality of a statute is in doubt the state's law officer, its Attorney-General, or county attorney, may exercise his
bet judgment as to what sort of action he will bring to have the matter determined, either by quo warranto to challenge its validity
(State vs. Johnson, 61 Kan., 803; 60 Pac., 1068; 49 L.R.A., 662), by mandamus to compel obedience to its terms (State vs.
Dolley, 82 Kan., 533; 108 Pac., 846), or by injunction to restrain proceedings under its questionable provisions (State ex rel. vs.
City of Neodesha, 3 Kan. App., 319; 45 Pac., 122).

Other courts have reached the same conclusion (See State vs. St. Louis S. W. Ry. Co. [1917], 197 S. W., 1006; State vs. S.H. Kress & Co.
[1934], 155 S., 823; State vs. Walmsley [1935], 181 La., 597; 160 S., 91; State vs. Board of County Comr's [1934], 39 Pac. [2d], 286; First
Const. Co. of Brooklyn vs. State [1917], 211 N.Y., 295; 116 N.E., 1020; Bush vs. State {1918], 187 Ind., 339; 119 N.E., 417; State vs.
Watkins [1933], 176 La., 837; 147 S., 8, 10, 11). In the case last cited, the Supreme Court of Luisiana said:

It is contended by counsel for Herbert Watkins that a district attorney, being charged with the duty of enforcing the laws, has no
right to plead that a law is unconstitutional. In support of the argument three decisions are cited, viz.: State ex rel. Hall, District
Attorney, vs. Judge of Tenth Judicial District (33 La. Ann., 1222); State ex rel. Nicholls, Governor vs. Shakespeare, Mayor of New
Orleans (41 Ann., 156; 6 So., 592); and State ex rel., Banking Co., etc. vs. Heard, Auditor (47 La. Ann., 1679; 18 So., 746; 47 L.
R. A., 512). These decisions do not forbid a district attorney to plead that a statute is unconstitutional if he finds if in conflict with
one which it is his duty to enforce. In State ex rel. Hall, District Attorney, vs. Judge, etc., the ruling was the judge should not,
merely because he believed a certain statute to be unconstitutional forbid the district attorney to file a bill of information charging a
person with a violation of the statute. In other words, a judge should not judicially declare a statute unconstitutional until the
question of constitutionality is tendered for decision, and unless it must be decided in order to determine the right of a party
litigant. State ex rel. Nicholls, Governor, etc., is authority for the proposition merely that an officer on whom a statute imposes the
duty of enforcing its provisions cannot avoid the duty upon the ground that he considers the statute unconstitutional, and hence in
enforcing the statute he is immune from responsibility if the statute be unconstitutional. State ex rel. Banking Co., etc., is authority
for the proposition merely that executive officers, e.g., the state auditor and state treasurer, should not decline to perform
ministerial duties imposed upon them by a statute, on the ground that they believe the statute is unconstitutional.

It is the duty of a district attorney to enforce the criminal laws of the state, and, above all, to support the Constitution of the state.
If, in the performance of his duty he finds two statutes in conflict with each other, or one which repeals another, and if, in his
judgment, one of the two statutes is unconstitutional, it is his duty to enforce the other; and, in order to do so, he is compelled to
submit to the court, by way of a plea, that one of the statutes is unconstitutional. If it were not so, the power of the Legislature
would be free from constitutional limitations in the enactment of criminal laws.

The respondents do not seem to doubt seriously the correctness of the general proposition that the state may impugn the validity of its laws.
They have not cited any authority running clearly in the opposite direction. In fact, they appear to have proceeded on the assumption that the
rule as stated is sound but that it has no application in the present case, nor may it be invoked by the City Fiscal in behalf of the People of
the Philippines, one of the petitioners herein, the principal reasons being that the validity before this court, that the City Fiscal is estopped
from attacking the validity of the Act and, not authorized challenge the validity of the Act in its application outside said city. (Additional
memorandum of respondents, October 23, 1937, pp. 8,. 10, 17 and 23.)

The mere fact that the Probation Act has been repeatedly relied upon the past and all that time has not been attacked as unconstitutional by
the Fiscal of Manila but, on the contrary, has been impliedly regarded by him as constitutional, is no reason for considering the People of the
Philippines estopped from nor assailing its validity. For courts will pass upon a constitutional questions only when presented before it in bona
fide cases for determination, and the fact that the question has not been raised before is not a valid reason for refusing to allow it to be raised
later. The fiscal and all others are justified in relying upon the statute and treating it as valid until it is held void by the courts in proper cases.

It remains to consider whether the determination of the constitutionality of Act No. 4221 is necessary to the resolution of the instant case.
For, ". . . while the court will meet the question with firmness, where its decision is indispensable, it is the part of wisdom, and just respect for
the legislature, renders it proper, to waive it, if the case in which it arises, can be decided on other points." (Ex parte Randolph [1833], 20 F.
Cas. No. 11, 558; 2 Brock., 447. Vide, also Hoover vs. wood [1857], 9 Ind., 286, 287.) It has been held that the determination of a
constitutional question is necessary whenever it is essential to the decision of the case (12 C. J., p. 782, citing Long Sault Dev. Co. vs.
Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp., 454 [aff. 212 N.Y., 1: 105 N. E., 849; Ann. Cas. 1915D, 56; and app dism 242 U.S.,
272]; Hesse vs. Ledesma, 7 Porto Rico Fed., 520; Cowan vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line Co., vs. Wisconsin R. Commn.,
146 Wis., 523; 129 N. W., 605), as where the right of a party is founded solely on a statute the validity of which is attacked. (12 C.J., p. 782,
citing Central Glass Co. vs. Niagrara F. Ins. Co., 131 La., 513; 59 S., 972; Cheney vs. Beverly, 188 Mass., 81; 74 N.E., 306). There is no
doubt that the respondent Cu Unjieng draws his privilege to probation solely from Act No. 4221 now being assailed.

Apart from the foregoing considerations, that court will also take cognizance of the fact that the Probation Act is a new addition to our statute
books and its validity has never before been passed upon by the courts; that may persons accused and convicted of crime in the City of
Manila have applied for probation; that some of them are already on probation; that more people will likely take advantage of the Probation
Act in the future; and that the respondent Mariano Cu Unjieng has been at large for a period of about four years since his first conviction. All
wait the decision of this court on the constitutional question. Considering, therefore, the importance which the instant case has assumed and
to prevent multiplicity of suits, strong reasons of public policy demand that the constitutionality of Act No. 4221 be now resolved. (Yu Cong
Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U.S., 500; 70 Law. ed., 1059. See 6 R.C.L., pp. 77, 78; People vs. Kennedy [1913], 207
N.Y., 533; 101 N.E., 442, 444; Ann. Cas. 1914C, 616; Borginis vs. Falk Co. [1911], 147 Wis., 327; 133 N.W., 209, 211; 37 L.R.A. [N.S.] 489;
Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil., 304.) In Yu Cong Eng vs. Trinidad, supra, an analogous situation confronted us. We
said: "Inasmuch as the property and personal rights of nearly twelve thousand merchants are affected by these proceedings, and inasmuch
as Act No. 2972 is a new law not yet interpreted by the courts, in the interest of the public welfare and for the advancement of public policy,
we have determined to overrule the defense of want of jurisdiction in order that we may decide the main issue. We have here an
extraordinary situation which calls for a relaxation of the general rule." Our ruling on this point was sustained by the Supreme Court of the
United States. A more binding authority in support of the view we have taken can not be found.

We have reached the conclusion that the question of the constitutionality of Act No. 4221 has been properly raised. Now for the main inquiry:
Is the Act unconstitutional?

Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the Constitution. This court, by clear implication from
the provisions of section 2, subsection 1, and section 10, of Article VIII of the Constitution, may declare an act of the national legislature
invalid because in conflict with the fundamental lay. It will not shirk from its sworn duty to enforce the Constitution. And, in clear cases, it will
not hesitate to give effect to the supreme law by setting aside a statute in conflict therewith. This is of the essence of judicial duty.

This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable doubts should be resolved in favor of the
constitutionality of a statute. An act of the legislature approved by the executive, is presumed to be within constitutional limitations. The
responsibility of upholding the Constitution rests not on the courts alone but on the legislature as well. "The question of the validity of every
statute is first determined by the legislative department of the government itself." (U.S. vs. Ten Yu [1912], 24 Phil., 1, 10; Case vs. Board of
Health and Heiser [1913], 24 Phil., 250, 276; U.S. vs. Joson [1913], 26 Phil., 1.) And a statute finally comes before the courts sustained by
the sanction of the executive. The members of the Legislature and the Chief Executive have taken an oath to support the Constitution and it
must be presumed that they have been true to this oath and that in enacting and sanctioning a particular law they did not intend to violate the
Constitution. The courts cannot but cautiously exercise its power to overturn the solemn declarations of two of the three grand departments
of the governments. (6 R.C.L., p. 101.) Then, there is that peculiar political philosophy which bids the judiciary to reflect the wisdom of the
people as expressed through an elective Legislature and an elective Chief Executive. It follows, therefore, that the courts will not set aside a
law as violative of the Constitution except in a clear case. This is a proposition too plain to require a citation of authorities.

One of the counsel for respondents, in the course of his impassioned argument, called attention to the fact that the President of the
Philippines had already expressed his opinion against the constitutionality of the Probation Act, adverting that as to the Executive the
resolution of this question was a foregone conclusion. Counsel, however, reiterated his confidence in the integrity and independence of this
court. We take notice of the fact that the President in his message dated September 1, 1937, recommended to the National Assembly the
immediate repeal of the Probation Act (No. 4221); that this message resulted in the approval of Bill No. 2417 of the Nationality Assembly
repealing the probation Act, subject to certain conditions therein mentioned; but that said bill was vetoed by the President on September 13,
1937, much against his wish, "to have stricken out from the statute books of the Commonwealth a law . . . unfair and very likely
unconstitutional." It is sufficient to observe in this connection that, in vetoing the bill referred to, the President exercised his constitutional
prerogative. He may express the reasons which he may deem proper for taking such a step, but his reasons are not binding upon us in the
determination of actual controversies submitted for our determination. Whether or not the Executive should express or in any manner
insinuate his opinion on a matter encompassed within his broad constitutional power of veto but which happens to be at the same time
pending determination in this court is a question of propriety for him exclusively to decide or determine. Whatever opinion is expressed by
him under these circumstances, however, cannot sway our judgment on way or another and prevent us from taking what in our opinion is the
proper course of action to take in a given case. It if is ever necessary for us to make any vehement affirmance during this formative period of
our political history, it is that we are independent of the Executive no less than of the Legislative department of our government
independent in the performance of our functions, undeterred by any consideration, free from politics, indifferent to popularity, and unafraid of
criticism in the accomplishment of our sworn duty as we see it and as we understand it.

The constitutionality of Act No. 4221 is challenged on three principal grounds: (1) That said Act encroaches upon the pardoning power of the
Executive; (2) that its constitutes an undue delegation of legislative power and (3) that it denies the equal protection of the laws.

1. Section 21 of the Act of Congress of August 29, 1916, commonly known as the Jones Law, in force at the time of the approval of Act No.
4221, otherwise known as the Probation Act, vests in the Governor-General of the Philippines "the exclusive power to grant pardons and
reprieves and remit fines and forfeitures". This power is now vested in the President of the Philippines. (Art. VII, sec. 11, subsec. 6.) The
provisions of the Jones Law and the Constitution differ in some respects. The adjective "exclusive" found in the Jones Law has been omitted
from the Constitution. Under the Jones Law, as at common law, pardon could be granted any time after the commission of the offense, either
before or after conviction (Vide Constitution of the United States, Art. II, sec. 2; In re Lontok [1922], 43 Phil., 293). The Governor-General of
the Philippines was thus empowered, like the President of the United States, to pardon a person before the facts of the case were fully
brought to light. The framers of our Constitution thought this undesirable and, following most of the state constitutions, provided that the
pardoning power can only be exercised "after conviction". So, too, under the new Constitution, the pardoning power does not extend to
"cases of impeachment". This is also the rule generally followed in the United States (Vide Constitution of the United States, Art. II, sec. 2).
The rule in England is different. There, a royal pardon can not be pleaded in bar of an impeachment; "but," says Blackstone, "after the
impeachment has been solemnly heard and determined, it is not understood that the king's royal grace is further restrained or abridged."
(Vide, Ex parte Wells [1856], 18 How., 307; 15 Law. ed., 421; Com. vs. Lockwood [1872], 109 Mass., 323; 12 Am. Rep., 699; Sterling vs.
Drake [1876], 29 Ohio St., 457; 23 am. Rep., 762.) The reason for the distinction is obvious. In England, Judgment on impeachment is not
confined to mere "removal from office and disqualification to hold and enjoy any office of honor, trust, or profit under the Government" (Art.
IX, sec. 4, Constitution of the Philippines) but extends to the whole punishment attached by law to the offense committed. The House of
Lords, on a conviction may, by its sentence, inflict capital punishment, perpetual banishment, perpetual banishment, fine or imprisonment,
depending upon the gravity of the offense committed, together with removal from office and incapacity to hold office. (Com. vs. Lockwood,
supra.) Our Constitution also makes specific mention of "commutation" and of the power of the executive to impose, in the pardons he may
grant, such conditions, restrictions and limitations as he may deem proper. Amnesty may be granted by the President under the Constitution
but only with the concurrence of the National Assembly. We need not dwell at length on the significance of these fundamental changes. It is
sufficient for our purposes to state that the pardoning power has remained essentially the same. The question is: Has the pardoning power of
the Chief Executive under the Jones Law been impaired by the Probation Act?

As already stated, the Jones Law vests the pardoning power exclusively in the Chief Executive. The exercise of the power may not,
therefore, be vested in anyone else.
". . . The benign prerogative of mercy reposed in the executive cannot be taken away nor fettered by any legislative restrictions, nor can like
power be given by the legislature to any other officer or authority. The coordinate departments of government have nothing to do with the
pardoning power, since no person properly belonging to one of the departments can exercise any powers appertaining to either of the others
except in cases expressly provided for by the constitution." (20 R.C.L., pp., , and cases cited.) " . . . where the pardoning power is conferred
on the executive without express or implied limitations, the grant is exclusive, and the legislature can neither exercise such power itself nor
delegate it elsewhere, nor interfere with or control the proper exercise thereof, . . ." (12 C.J., pp. 838, 839, and cases cited.) If Act No. 4221,
then, confers any pardoning power upon the courts it is for that reason unconstitutional and void. But does it?

In the famous Killitts decision involving an embezzlement case, the Supreme Court of the United States ruled in 1916 that an order
indefinitely suspending sentenced was void. (Ex parte United States [1916], 242 U.S., 27; 61 Law. ed., 129; L.R.A. 1917E, 1178; 37 Sup. Ct.
Rep., 72; Ann. Cas. 1917B, 355.) Chief Justice White, after an exhaustive review of the authorities, expressed the opinion of the court that
under the common law the power of the court was limited to temporary suspension and that the right to suspend sentenced absolutely and
permanently was vested in the executive branch of the government and not in the judiciary. But, the right of Congress to establish probation
by statute was conceded. Said the court through its Chief Justice: ". . . and so far as the future is concerned, that is, the causing of the
imposition of penalties as fixed to be subject, by probation legislation or such other means as the legislative mind may devise, to such judicial
discretion as may be adequate to enable courts to meet by the exercise of an enlarged but wise discretion the infinite variations which may
be presented to them for judgment, recourse must be had Congress whose legislative power on the subject is in the very nature of things
adequately complete." (Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.) This decision led the National Probation Association and
others to agitate for the enactment by Congress of a federal probation law. Such action was finally taken on March 4, 1925 (chap. 521, 43
Stat. L. 159, U.S.C. title 18, sec. 724). This was followed by an appropriation to defray the salaries and expenses of a certain number of
probation officers chosen by civil service. (Johnson, Probation for Juveniles and Adults, p. 14.)

In United States vs. Murray ([1925], 275 U.S., 347; 48 Sup. Ct. Rep., 146; 72 Law. ed., 309), the Supreme Court of the United States,
through Chief Justice Taft, held that when a person sentenced to imprisonment by a district court has begun to serve his sentence, that court
has no power under the Probation Act of March 4, 1925 to grant him probation even though the term at which sentence was imposed had not
yet expired. In this case of Murray, the constitutionality of the probation Act was not considered but was assumed. The court traced the
history of the Act and quoted from the report of the Committee on the Judiciary of the United States House of Representatives (Report No.
1377, 68th Congress, 2 Session) the following statement:

Prior to the so-called Killitts case, rendered in December, 1916, the district courts exercised a form of probation either, by
suspending sentence or by placing the defendants under state probation officers or volunteers. In this case, however (Ex parte
United States, 242 U.S., 27; 61 L. Ed., 129; L.R.A., 1917E, 1178; 37 Sup. Ct. Rep., 72 Ann. Cas. 1917B, 355), the Supreme Court
denied the right of the district courts to suspend sentenced. In the same opinion the court pointed out the necessity for action by
Congress if the courts were to exercise probation powers in the future . . .

Since this decision was rendered, two attempts have been made to enact probation legislation. In 1917, a bill was favorably
reported by the Judiciary Committee and passed the House. In 1920, the judiciary Committee again favorably reported a probation
bill to the House, but it was never reached for definite action.

If this bill is enacted into law, it will bring the policy of the Federal government with reference to its treatment of those convicted of
violations of its criminal laws in harmony with that of the states of the Union. At the present time every state has a probation law,
and in all but twelve states the law applies both to adult and juvenile offenders. (see, also, Johnson, Probation for Juveniles and
Adults [1928], Chap. I.)

The constitutionality of the federal probation law has been sustained by inferior federal courts. In Riggs vs. United States supra, the Circuit
Court of Appeals of the Fourth Circuit said:

Since the passage of the Probation Act of March 4, 1925, the questions under consideration have been reviewed by the Circuit
Court of Appeals of the Ninth Circuit (7 F. [2d], 590), and the constitutionality of the act fully sustained, and the same held in no
manner to encroach upon the pardoning power of the President. This case will be found to contain an able and comprehensive
review of the law applicable here. It arose under the act we have to consider, and to it and the authorities cited therein special
reference is made (Nix vs. James, 7 F. [2d], 590, 594), as is also to a decision of the Circuit Court of Appeals of the Seventh
Circuit (Kriebel vs. U.S., 10 F. [2d], 762), likewise construing the Probation Act.
We have seen that in 1916 the Supreme Court of the United States; in plain and unequivocal language, pointed to Congress as possessing
the requisite power to enact probation laws, that a federal probation law as actually enacted in 1925, and that the constitutionality of the Act
has been assumed by the Supreme Court of the United States in 1928 and consistently sustained by the inferior federal courts in a number
of earlier cases.

We are fully convinced that the Philippine Legislature, like the Congress of the United States, may legally enact a probation law under its
broad power to fix the punishment of any and all penal offenses. This conclusion is supported by other authorities. In Ex parte Bates ([1915],
20 N. M., 542; L.R.A. 1916A, 1285; 151 Pac., 698, the court said: "It is clearly within the province of the Legislature to denominate and define
all classes of crime, and to prescribe for each a minimum and maximum punishment." And in State vs. Abbott ([1910], 87 S.C., 466; 33
L.R.A. [N. S.], 112; 70 S. E., 6; Ann. Cas. 1912B, 1189), the court said: "The legislative power to set punishment for crime is very broad, and
in the exercise of this power the general assembly may confer on trial judges, if it sees fit, the largest discretion as to the sentence to be
imposed, as to the beginning and end of the punishment and whether it should be certain or indeterminate or conditional." (Quoted in State
vs. Teal [1918], 108 S. C., 455; 95 S. E., 69.) Indeed, the Philippine Legislature has defined all crimes and fixed the penalties for their
violation. Invariably, the legislature has demonstrated the desire to vest in the courts particularly the trial courts large discretion in
imposing the penalties which the law prescribes in particular cases. It is believed that justice can best be served by vesting this power in the
courts, they being in a position to best determine the penalties which an individual convict, peculiarly circumstanced, should suffer. Thus,
while courts are not allowed to refrain from imposing a sentence merely because, taking into consideration the degree of malice and the
injury caused by the offense, the penalty provided by law is clearly excessive, the courts being allowed in such case to submit to the Chief
Executive, through the Department of Justice, such statement as it may deem proper (see art. 5, Revised Penal Code), in cases where both
mitigating and aggravating circumstances are attendant in the commission of a crime and the law provides for a penalty composed of two
indivisible penalties, the courts may allow such circumstances to offset one another in consideration of their number and importance, and to
apply the penalty according to the result of such compensation. (Art. 63, rule 4, Revised Penal Code; U.S. vs. Reguera and Asuategui
[1921], 41 Phil., 506.) Again, article 64, paragraph 7, of the Revised Penal Code empowers the courts to determine, within the limits of each
periods, in case the penalty prescribed by law contains three periods, the extent of the evil produced by the crime. In the imposition of fines,
the courts are allowed to fix any amount within the limits established by law, considering not only the mitigating and aggravating
circumstances, but more particularly the wealth or means of the culprit. (Art. 66, Revised Penal Code.) Article 68, paragraph 1, of the same
Code provides that "a discretionary penalty shall be imposed" upon a person under fifteen but over nine years of age, who has not acted
without discernment, but always lower by two degrees at least than that prescribed by law for the crime which he has committed. Article 69 of
the same Code provides that in case of "incomplete self-defense", i.e., when the crime committed is not wholly excusable by reason of the
lack of some of the conditions required to justify the same or to exempt from criminal liability in the several cases mentioned in article 11 and
12 of the Code, "the courts shall impose the penalty in the period which may be deemed proper, in view of the number and nature of the
conditions of exemption present or lacking." And, in case the commission of what are known as "impossible" crimes, "the court, having in
mind the social danger and the degree of criminality shown by the offender," shall impose upon him either arresto mayor or a fine ranging
from 200 to 500 pesos. (Art. 59, Revised Penal Code.)

Under our Revised Penal Code, also, one-half of the period of preventive imprisonment is deducted form the entire term of imprisonment,
except in certain cases expressly mentioned (art. 29); the death penalty is not imposed when the guilty person is more than seventy years of
age, or where upon appeal or revision of the case by the Supreme Court, all the members thereof are not unanimous in their voting as to the
propriety of the imposition of the death penalty (art. 47, see also, sec. 133, Revised Administrative Code, as amended by Commonwealth Act
No. 3); the death sentence is not to be inflicted upon a woman within the three years next following the date of the sentence or while she is
pregnant, or upon any person over seventy years of age (art. 83); and when a convict shall become insane or an imbecile after final sentence
has been pronounced, or while he is serving his sentenced, the execution of said sentence shall be suspended with regard to the personal
penalty during the period of such insanity or imbecility (art. 79).

But the desire of the legislature to relax what might result in the undue harshness of the penal laws is more clearly demonstrated in various
other enactments, including the probation Act. There is the Indeterminate Sentence Law enacted in 1933 as Act No. 4103 and subsequently
amended by Act No. 4225, establishing a system of parole (secs. 5 to 100 and granting the courts large discretion in imposing the penalties
of the law. Section 1 of the law as amended provides; "hereafter, in imposing a prison sentence for an offenses punished by the Revised
Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which shall be that
which, in view of the attending circumstances, could be properly imposed under the rules of the said Code, and to a minimum which shall be
within the range of the penalty next lower to that prescribed by the Code for the offense; and if the offense is punished by any other law, the
court shall sentence the accused to an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by said law
and the minimum shall not be less than the minimum term prescribed by the same." Certain classes of convicts are, by section 2 of the law,
excluded from the operation thereof. The Legislature has also enacted the Juvenile Delinquency Law (Act No. 3203) which was subsequently
amended by Act No. 3559. Section 7 of the original Act and section 1 of the amendatory Act have become article 80 of the Revised Penal
Code, amended by Act No. 4117 of the Philippine Legislature and recently reamended by Commonwealth Act No. 99 of the National
Assembly. In this Act is again manifested the intention of the legislature to "humanize" the penal laws. It allows, in effect, the modification in
particular cases of the penalties prescribed by law by permitting the suspension of the execution of the judgment in the discretion of the trial
court, after due hearing and after investigation of the particular circumstances of the offenses, the criminal record, if any, of the convict, and
his social history. The Legislature has in reality decreed that in certain cases no punishment at all shall be suffered by the convict as long as
the conditions of probation are faithfully observed. It this be so, then, it cannot be said that the Probation Act comes in conflict with the power
of the Chief Executive to grant pardons and reprieves, because, to use the language of the Supreme Court of New Mexico, "the element of
punishment or the penalty for the commission of a wrong, while to be declared by the courts as a judicial function under and within the limits
of law as announced by legislative acts, concerns solely the procedure and conduct of criminal causes, with which the executive can have
nothing to do." (Ex parte Bates, supra.) In Williams vs. State ([1926], 162 Ga., 327; 133 S.E., 843), the court upheld the constitutionality of
the Georgia probation statute against the contention that it attempted to delegate to the courts the pardoning power lodged by the
constitution in the governor alone is vested with the power to pardon after final sentence has been imposed by the courts, the power of the
courts to imposed any penalty which may be from time to time prescribed by law and in such manner as may be defined cannot be
questioned."

We realize, of course, the conflict which the American cases disclose. Some cases hold it unlawful for the legislature to vest in the courts the
power to suspend the operation of a sentenced, by probation or otherwise, as to do so would encroach upon the pardoning power of the
executive. (In re Webb [1895], 89 Wis., 354; 27 L.R.A., 356; 46 Am. St. Rep., 846; 62 N.W., 177; 9 Am. Crim., Rep., 702; State ex rel.
Summerfield vs. Moran [1919], 43 Nev., 150; 182 Pac., 927; Ex parte Clendenning [1908], 22 Okla., 108; 1 Okla. Crim. Rep., 227; 19 L.R.A.
[N.S.], 1041; 132 Am. St. Rep., 628; 97 Pac., 650; People vs. Barrett [1903], 202 Ill, 287; 67 N.E., 23; 63 L.R.A., 82; 95 Am. St. Rep., 230;
Snodgrass vs. State [1912], 67 Tex. Crim. Rep., 615; 41 L. R. A. [N. S.], 1144; 150 S. W., 162; Ex parte Shelor [1910], 33 Nev., 361;111
Pac., 291; Neal vs. State [1898], 104 Ga., 509; 42 L. R. A., 190; 69 Am. St. Rep., 175; 30 S. E. 858; State ex rel. Payne vs. Anderson [1921],
43 S. D., 630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571; States vs. Dalton [1903], 109 Tenn., 544; 72 S. W., 456.)

Other cases, however, hold contra. (Nix vs. James [1925; C. C. A., 9th], 7 F. [2d], 590; Archer vs. Snook [1926; D. C.], 10 F. [2d], 567; Riggs.
vs. United States [1926; C. C. A. 4th], 14]) [2d], 5; Murphy vs. States [1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re Giannini
[1912], 18 Cal. App., 166; 122 Pac., 831; Re Nachnaber [1928], 89 Cal. App., 530; 265 Pac., 392; Ex parte De Voe [1931], 114 Cal. App.,
730; 300 Pac., 874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac., 425; Martin vs. People [1917], 69 Colo., 60; 168 Pac., 1171; Belden
vs. Hugo [1914], 88 Conn., 50; 91 A., 369, 370, 371; Williams vs. State [1926], 162 Ga., 327; 133 S. E., 843; People vs. Heise [1913], 257
Ill., 443; 100 N. E., 1000; Parker vs. State [1893], 135 Ind., 534; 35 N. E., 179; 23 L. R. A., 859; St. Hillarie, Petitioner [1906], 101 Me., 522;
64 Atl., 882; People vs. Stickle [1909], 156 Mich., 557; 121 N. W., 497; State vs. Fjolander [1914], 125 Minn., 529; State ex rel. Bottomnly vs.
District Court [1925], 73 Mont., 541; 237 Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79 S. E., 274; 47 L. R. A. [N. S.], 848; State ex
rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl., 875; State vs. Osborne [1911], 79 N. J. Eq., 430; 82 Atl. 424; Ex parte Bates [1915], 20
N. M., 542; L. R. A., 1916 A. 1285; 151 Pac., 698; People vs. ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; 23 L. R. A., 856; 36
N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907], 55 Misc., 639; 106 N. Y. Supp., 928; People vs. Goodrich
[1914], 149 N. Y. Supp., 406; Moore vs. Thorn [1935], 245 App. Div., 180; 281 N. Y. Supp., 49; Re Hart [1914], 29 N. D., 38; L. R. A., 1915C,
1169; 149 N. W., 568; Ex parte Eaton [1925], 29 Okla., Crim. Rep., 275; 233 P., 781; State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69;
State vs. Abbot [1910], 87 S. C., 466; 33 L.R.A., [N. S.], 112; 70 S. E., 6; Ann. Cas., 1912B, 1189; Fults vs. States [1854],34 Tenn., 232;
Woods vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1913],70
Tex., Crim. Rep., 618; 158 S. W., 998; Cook vs. State [1914], 73 Tex. Crim. Rep., 548; 165 S. W., 573; King vs. State [1914], 72 Tex. Crim.
Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep.,
211; 54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136 A., 24; Richardson vs. Com. [1921], 131 Va., 802; 109 S.E., 460; State vs.
Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex rel. Tingstand vs. Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393;
396.) We elect to follow this long catena of authorities holding that the courts may be legally authorized by the legislature to suspend
sentence by the establishment of a system of probation however characterized. State ex rel. Tingstand vs. Starwich ([1922], 119 Wash., 561;
206 Pac., 29; 26 A. L. R., 393), deserved particular mention. In that case, a statute enacted in 1921 which provided for the suspension of the
execution of a sentence until otherwise ordered by the court, and required that the convicted person be placed under the charge of a parole
or peace officer during the term of such suspension, on such terms as the court may determine, was held constitutional and as not giving the
court a power in violation of the constitutional provision vesting the pardoning power in the chief executive of the state. (Vide, also, Re
Giannini [1912], 18 Cal App., 166; 122 Pac., 831.)

Probation and pardon are not coterminous; nor are they the same. They are actually district and different from each other, both in origin and
in nature. In People ex rel. Forsyth vs. Court of Sessions ([1894], 141 N. Y., 288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am. Crim.
Rep., 675), the Court of Appeals of New York said:

. . . The power to suspend sentence and the power to grant reprieves and pardons, as understood when the constitution was
adopted, are totally distinct and different in their nature. The former was always a part of the judicial power; the latter was always a
part of the executive power. The suspension of the sentence simply postpones the judgment of the court temporarily or
indefinitely, but the conviction and liability following it, and the civil disabilities, remain and become operative when judgment is
rendered. A pardon reaches both the punishment prescribed for the offense and the guilt of the offender. It releases the
punishment, and blots out of existence the guilt, so that in the eye of the law, the offender is as innocent as if he had never
committed the offense. It removes the penalties and disabilities, and restores him to all his civil rights. It makes him, as it were, a
new man, and gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4 Wall., 333; 18 Law. ed., 366; U. S. vs. Klein, 80
U. S., 13 Wall., 128; 20 Law. ed., 519; Knote vs. U. S., 95 U. S., 149; 24 Law. ed., 442.)

The framers of the federal and the state constitutions were perfectly familiar with the principles governing the power to grant
pardons, and it was conferred by these instruments upon the executive with full knowledge of the law upon the subject, and the
words of the constitution were used to express the authority formerly exercised by the English crown, or by its representatives in
the colonies. (Ex parte Wells, 59 U. S., 18 How., 307; 15 Law. ed., 421.) As this power was understood, it did not comprehend any
part of the judicial functions to suspend sentence, and it was never intended that the authority to grant reprieves and pardons
should abrogate, or in any degree restrict, the exercise of that power in regard to its own judgments, that criminal courts has so
long maintained. The two powers, so distinct and different in their nature and character, were still left separate and distinct, the
one to be exercised by the executive, and the other by the judicial department. We therefore conclude that a statute which, in
terms, authorizes courts of criminal jurisdiction to suspend sentence in certain cases after conviction, a power inherent in such
courts at common law, which was understood when the constitution was adopted to be an ordinary judicial function, and which,
ever since its adoption, has been exercised of legislative power under the constitution. It does not encroach, in any just sense,
upon the powers of the executive, as they have been understood and practiced from the earliest times. (Quoted with approval in
Directors of Prisons vs. Judge of First Instance of Cavite [1915], 29 Phil., 265, Carson, J., concurring, at pp. 294, 295.)

In probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and completely exonerated. He is not exempt from
the entire punishment which the law inflicts. Under the Probation Act, the probationer's case is not terminated by the mere fact that he is
placed on probation. Section 4 of the Act provides that the probation may be definitely terminated and the probationer finally discharged from
supervision only after the period of probation shall have been terminated and the probation officer shall have submitted a report, and the
court shall have found that the probationer has complied with the conditions of probation. The probationer, then, during the period of
probation, remains in legal custody subject to the control of the probation officer and of the court; and, he may be rearrested upon the
non-fulfillment of the conditions of probation and, when rearrested, may be committed to prison to serve the sentence originally imposed
upon him. (Secs. 2, 3, 5 and 6, Act No. 4221.)
The probation described in the act is not pardon. It is not complete liberty, and may be far from it. It is really a new mode of
punishment, to be applied by the judge in a proper case, in substitution of the imprisonment and find prescribed by the criminal
laws. For this reason its application is as purely a judicial act as any other sentence carrying out the law deemed applicable to the
offense. The executive act of pardon, on the contrary, is against the criminal law, which binds and directs the judges, or rather is
outside of and above it. There is thus no conflict with the pardoning power, and no possible unconstitutionality of the Probation Act
for this cause. (Archer vs. Snook [1926], 10 F. [2d], 567, 569.)

Probation should also be distinguished from reprieve and from commutation of the sentence. Snodgrass vs. State ([1912], 67 Tex. Crim.
Rep., 615;41 L. R. A. [N. S.], 1144; 150 S. W., 162), is relied upon most strongly by the petitioners as authority in support of their contention
that the power to grant pardons and reprieves, having been vested exclusively upon the Chief Executive by the Jones Law, may not be
conferred by the legislature upon the courts by means of probation law authorizing the indefinite judicial suspension of sentence. We have
examined that case and found that although the Court of Criminal Appeals of Texas held that the probation statute of the state in terms
conferred on the district courts the power to grant pardons to persons convicted of crime, it also distinguished between suspensions
sentence on the one hand, and reprieve and commutation of sentence on the other. Said the court, through Harper, J.:

That the power to suspend the sentence does not conflict with the power of the Governor to grant reprieves is settled by the
decisions of the various courts; it being held that the distinction between a "reprieve" and a suspension of sentence is that a
reprieve postpones the execution of the sentence to a day certain, whereas a suspension is for an indefinite time. (Carnal vs.
People, 1 Parker, Cr. R., 262; In re Buchanan, 146 N. Y., 264; 40 N. E., 883), and cases cited in 7 Words & Phrases, pp. 6115,
6116. This law cannot be hold in conflict with the power confiding in the Governor to grant commutations of punishment, for a
commutations is not but to change the punishment assessed to a less punishment.

In State ex rel. Bottomnly vs. District Court ([1925], 73 Mont., 541; 237 Pac., 525), the Supreme Court of Montana had under consideration
the validity of the adult probation law of the state enacted in 1913, now found in sections 12078-12086, Revised Codes of 1921. The court
held the law valid as not impinging upon the pardoning power of the executive. In a unanimous decision penned by Justice Holloway, the
court said:

. . . . the term "pardon", "commutation", and "respite" each had a well understood meaning at the time our Constitution was
adopted, and no one of them was intended to comprehend the suspension of the execution of the judgment as that phrase is
employed in sections 12078-12086. A "pardon" is an act of grace, proceeding from the power intrusted with the execution of the
laws which exempts the individual on whom it is bestowed from the punishment the law inflicts for a crime he has committed
(United States vs. Wilson, 7 Pet., 150; 8 Law. ed., 640); It is a remission of guilt (State vs. Lewis, 111 La., 693; 35 So., 816), a
forgiveness of the offense (Cook vs. Middlesex County, 26 N. J. Law, 326; Ex parte Powell, 73 Ala., 517; 49 Am. Rep., 71).
"Commutation" is a remission of a part of the punishment; a substitution of a less penalty for the one originally imposed (Lee vs.
Murphy, 22 Grat. [Va.] 789; 12 Am. Rep., 563; Rich vs. Chamberlain, 107 Mich., 381; 65 N. W., 235). A "reprieve" or "respite" is
the withholding of the sentence for an interval of time (4 Blackstone's Commentaries, 394), a postponement of execution (Carnal
vs. People, 1 Parker, Cr. R. [N. Y.], 272), a temporary suspension of execution (Butler vs. State, 97 Ind., 373).

Few adjudicated cases are to be found in which the validity of a statute similar to our section 12078 has been determined; but the
same objections have been urged against parole statutes which vest the power to parole in persons other than those to whom the
power of pardon is granted, and these statutes have been upheld quite uniformly, as a reference to the numerous cases cited in
the notes to Woods vs. State (130 Tenn., 100; 169 S. W.,558, reported in L. R. A., 1915F, 531), will disclose. (See, also, 20 R. C.
L., 524.)

We conclude that the Probation Act does not conflict with the pardoning power of the Executive. The pardoning power, in respect to those
serving their probationary sentences, remains as full and complete as if the Probation Law had never been enacted. The President may yet
pardon the probationer and thus place it beyond the power of the court to order his rearrest and imprisonment. (Riggs vs. United States
[1926],
14 F. [2d], 5, 7.)

2. But while the Probation Law does not encroach upon the pardoning power of the executive and is not for that reason void, does section 11
thereof constitute, as contended, an undue delegation of legislative power?

Under the constitutional system, the powers of government are distributed among three coordinate and substantially independent organs: the
legislative, the executive and the judicial. Each of these departments of the government derives its authority from the Constitution which, in
turn, is the highest expression of popular will. Each has exclusive cognizance of the matters within its jurisdiction, and is supreme within its
own sphere.

The power to make laws the legislative power is vested in a bicameral Legislature by the Jones Law (sec. 12) and in a unicamiral
National Assembly by the Constitution (Act. VI, sec. 1, Constitution of the Philippines). The Philippine Legislature or the National Assembly
may not escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the power is
unconstitutional and void, on the principle that potestas delegata non delegare potest. This principle is said to have originated with the
glossators, was introduced into English law through a misreading of Bracton, there developed as a principle of agency, was established by
Lord Coke in the English public law in decisions forbidding the delegation of judicial power, and found its way into America as an enlightened
principle of free government. It has since become an accepted corollary of the principle of separation of powers. (5 Encyc. of the Social
Sciences, p. 66.) The classic statement of the rule is that of Locke, namely: "The legislative neither must nor can transfer the power of
making laws to anybody else, or place it anywhere but where the people have." (Locke on Civil Government, sec. 142.) Judge Cooley
enunciates the doctrine in the following oft-quoted language: "One of the settled maxims in constitutional law is, that the power conferred
upon the legislature to make laws cannot be delegated by that department to any other body or authority. Where the sovereign power of the
state has located the authority, there it must remain; and by the constitutional agency alone the laws must be made until the Constitution
itself is charged. The power to whose judgment, wisdom, and patriotism this high prerogative has been intrusted cannot relieve itself of the
responsibilities by choosing other agencies upon which the power shall be devolved, nor can it substitute the judgment, wisdom, and
patriotism of any other body for those to which alone the people have seen fit to confide this sovereign trust." (Cooley on Constitutional
Limitations, 8th ed., Vol. I, p. 224. Quoted with approval in U. S. vs. Barrias [1908], 11 Phil., 327.) This court posits the doctrine "on the
ethical principle that such a delegated power constitutes not only a right but a duty to be performed by the delegate by the instrumentality of
his own judgment acting immediately upon the matter of legislation and not through the intervening mind of another. (U. S. vs. Barrias, supra,
at p. 330.)

The rule, however, which forbids the delegation of legislative power is not absolute and inflexible. It admits of exceptions. An exceptions
sanctioned by immemorial practice permits the central legislative body to delegate legislative powers to local authorities. (Rubi vs. Provincial
Board of Mindoro [1919], 39 Phil., 660; U. S. vs. Salaveria [1918], 39 Phil., 102; Stoutenburgh vs. Hennick [1889], 129 U. S., 141; 32 Law.
ed., 637; 9 Sup. Ct. Rep., 256; State vs. Noyes [1855], 30 N. H., 279.) "It is a cardinal principle of our system of government, that local affairs
shall be managed by local authorities, and general affairs by the central authorities; and hence while the rule is also fundamental that the
power to make laws cannot be delegated, the creation of the municipalities exercising local self government has never been held to trench
upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribed
local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity."
(Stoutenburgh vs. Hennick, supra.) On quite the same principle, Congress is powered to delegate legislative power to such agencies in the
territories of the United States as it may select. A territory stands in the same relation to Congress as a municipality or city to the state
government. (United States vs. Heinszen [1907], 206 U. S., 370; 27 Sup. Ct. Rep., 742; 51 L. ed., 1098; 11 Ann. Cas., 688; Dorr vs. United
States [1904], 195 U.S., 138; 24 Sup. Ct. Rep., 808; 49 Law. ed., 128; 1 Ann. Cas., 697.) Courts have also sustained the delegation of
legislative power to the people at large. Some authorities maintain that this may not be done (12 C. J., pp. 841, 842; 6 R. C. L., p. 164, citing
People vs. Kennedy [1913], 207 N. Y., 533; 101 N. E., 442; Ann. Cas., 1914C, 616). However, the question of whether or not a state has
ceased to be republican in form because of its adoption of the initiative and referendum has been held not to be a judicial but a political
question (Pacific States Tel. & Tel. Co. vs. Oregon [1912], 223 U. S., 118; 56 Law. ed., 377; 32 Sup. Cet. Rep., 224), and as the
constitutionality of such laws has been looked upon with favor by certain progressive courts, the sting of the decisions of the more
conservative courts has been pretty well drawn. (Opinions of the Justices [1894], 160 Mass., 586; 36 N. E., 488; 23 L. R. A., 113; Kiernan vs.
Portland [1910], 57 Ore., 454; 111 Pac., 379; 1132 Pac., 402; 37 L. R. A. [N. S.], 332; Pacific States Tel. & Tel. Co. vs. Oregon, supra.)
Doubtless, also, legislative power may be delegated by the Constitution itself. Section 14, paragraph 2, of article VI of the Constitution of the
Philippines provides that "The National Assembly may by law authorize the President, subject to such limitations and restrictions as it may
impose, to fix within specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues." And section 16 of the same article
of the Constitution provides that "In times of war or other national emergency, the National Assembly may by law authorize the President, for
a limited period and subject to such restrictions as it may prescribed, to promulgate rules and regulations to carry out a declared national
policy." It is beyond the scope of this decision to determine whether or not, in the absence of the foregoing constitutional provisions, the
President could be authorized to exercise the powers thereby vested in him. Upon the other hand, whatever doubt may have existed has
been removed by the Constitution itself.

The case before us does not fall under any of the exceptions hereinabove mentioned.

The challenged section of Act No. 4221 in section 11 which reads as follows:

This Act shall apply only in those provinces in which the respective provincial boards have provided for the salary of a probation
officer at rates not lower than those now provided for provincial fiscals. Said probation officer shall be appointed by the Secretary
of Justice and shall be subject to the direction of the Probation Office. (Emphasis ours.)

In testing whether a statute constitute an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete
in all its terms and provisions when it left the hands of the legislature so that nothing was left to the judgment of any other appointee or
delegate of the legislature. (6 R. C. L., p. 165.) In the United States vs. Ang Tang Ho ([1922], 43 Phil., 1), this court adhered to the foregoing
rule when it held an act of the legislature void in so far as it undertook to authorize the Governor-General, in his discretion, to issue a
proclamation fixing the price of rice and to make the sale of it in violation of the proclamation a crime. (See and cf. Compaia General de
Tabacos vs. Board of Public Utility Commissioners [1916], 34 Phil., 136.) The general rule, however, is limited by another rule that to a
certain extent matters of detail may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers and
administrative boards. (6 R. C. L., pp. 177-179.)

For the purpose of Probation Act, the provincial boards may be regarded as administrative bodies endowed with power to determine when
the Act should take effect in their respective provinces. They are the agents or delegates of the legislature in this respect. The rules
governing delegation of legislative power to administrative and executive officers are applicable or are at least indicative of the rule which
should be here adopted. An examination of a variety of cases on delegation of power to administrative bodies will show that the ratio
decidendi is at variance but, it can be broadly asserted that the rationale revolves around the presence or absence of a standard or rule of
action or the sufficiency thereof in the statute, to aid the delegate in exercising the granted discretion. In some cases, it is held that the
standard is sufficient; in others that is insufficient; and in still others that it is entirely lacking. As a rule, an act of the legislature is incomplete
and hence invalid if it does not lay down any rule or definite standard by which the administrative officer or board may be guided in the
exercise of the discretionary powers delegated to it. (See Schecter vs. United States [1925], 295 U. S., 495; 79 L. ed., 1570; 55 Sup. Ct.
Rep., 837; 97 A.L.R., 947; People ex rel. Rice vs. Wilson Oil Co. [1936], 364 Ill., 406; 4 N. E. [2d], 847; 107 A.L.R., 1500 and cases cited.
See also R. C. L., title "Constitutional Law", sec 174.) In the case at bar, what rules are to guide the provincial boards in the exercise of their
discretionary power to determine whether or not the Probation Act shall apply in their respective provinces? What standards are fixed by the
Act? We do not find any and none has been pointed to us by the respondents. The probation Act does not, by the force of any of its
provisions, fix and impose upon the provincial boards any standard or guide in the exercise of their discretionary power. What is granted, if
we may use the language of Justice Cardozo in the recent case of Schecter, supra, is a "roving commission" which enables the provincial
boards to exercise arbitrary discretion. By section 11 if the Act, the legislature does not seemingly on its own authority extend the benefits of
the Probation Act to the provinces but in reality leaves the entire matter for the various provincial boards to determine. In other words, the
provincial boards of the various provinces are to determine for themselves, whether the Probation Law shall apply to their provinces or not at
all. The applicability and application of the Probation Act are entirely placed in the hands of the provincial boards. If the provincial board does
not wish to have the Act applied in its province, all that it has to do is to decline to appropriate the needed amount for the salary of a
probation officer. The plain language of the Act is not susceptible of any other interpretation. This, to our minds, is a virtual surrender of
legislative power to the provincial boards.

"The true distinction", says Judge Ranney, "is between the delegation of power to make the law, which necessarily involves a discretion as to
what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first
cannot be done; to the latter no valid objection can be made." (Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St., 77,
88. See also, Sutherland on Statutory Construction, sec 68.) To the same effect are the decision of this court in Municipality of Cardona vs.
Municipality of Binangonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of Mindoro ([1919],39 Phil., 660) and Cruz vs. Youngberg
([1931], 56 Phil., 234). In the first of these cases, this court sustained the validity of the law conferring upon the Governor-General authority
to adjust provincial and municipal boundaries. In the second case, this court held it lawful for the legislature to direct non-Christian
inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor and approved by the provincial board. In
the third case, it was held proper for the legislature to vest in the Governor-General authority to suspend or not, at his discretion, the
prohibition of the importation of the foreign cattle, such prohibition to be raised "if the conditions of the country make this advisable or if
deceased among foreign cattle has ceased to be a menace to the agriculture and livestock of the lands."

It should be observed that in the case at bar we are not concerned with the simple transference of details of execution or the promulgation by
executive or administrative officials of rules and regulations to carry into effect the provisions of a law. If we were, recurrence to our own
decisions would be sufficient. (U. S. vs. Barrias [1908], 11 Phil., 327; U.S. vs. Molina [1914], 29 Phil., 119; Alegre vs. Collector of Customs
[1929], 53 Phil., 394; Cebu Autobus Co. vs. De Jesus [1931], 56 Phil., 446; U. S. vs. Gomez [1915], 31 Phil., 218; Rubi vs. Provincial Board
of Mindoro [1919], 39 Phil., 660.)

It is connected, however, that a legislative act may be made to the effect as law after it leaves the hands of the legislature. It is true that laws
may be made effective on certain contingencies, as by proclamation of the executive or the adoption by the people of a particular community
(6 R. C. L., 116, 170-172; Cooley, Constitutional Limitations, 8th ed., Vol. I, p. 227). In Wayman vs. Southard ([1825], 10 Wheat. 1; 6 Law.
ed., 253), the Supreme Court of the United State ruled that the legislature may delegate a power not legislative which it may itself rightfully
exercise.(Vide, also, Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N. W., 738; 31 L. R. A., 112.) The power to ascertain facts is
such a power which may be delegated. There is nothing essentially legislative in ascertaining the existence of facts or conditions as the basis
of the taking into effect of a law. That is a mental process common to all branches of the government. (Dowling vs. Lancashire Ins. Co.,
supra; In re Village of North Milwaukee [1896], 93 Wis., 616; 97 N.W., 1033; 33 L.R.A., 938; Nash vs. Fries [1906], 129 Wis., 120; 108 N.W.,
210; Field vs. Clark [1892], 143 U.S., 649; 12 Sup. Ct., 495; 36 Law. ed., 294.) Notwithstanding the apparent tendency, however, to relax the
rule prohibiting delegation of legislative authority on account of the complexity arising from social and economic forces at work in this modern
industrial age (Pfiffner, Public Administration [1936] ch. XX; Laski, "The Mother of Parliaments", foreign Affairs, July, 1931, Vol. IX, No. 4, pp.
569-579; Beard, "Squirt-Gun Politics", in Harper's Monthly Magazine, July, 1930, Vol. CLXI, pp. 147, 152), the orthodox pronouncement of
Judge Cooley in his work on Constitutional Limitations finds restatement in Prof. Willoughby's treatise on the Constitution of the United States
in the following language speaking of declaration of legislative power to administrative agencies: "The principle which permits the
legislature to provide that the administrative agent may determine when the circumstances are such as require the application of a law is
defended upon the ground that at the time this authority is granted, the rule of public policy, which is the essence of the legislative act, is
determined by the legislature. In other words, the legislature, as it its duty to do, determines that, under given circumstances, certain
executive or administrative action is to be taken, and that, under other circumstances, different of no action at all is to be taken. What is thus
left to the administrative official is not the legislative determination of what public policy demands, but simply the ascertainment of what the
facts of the case require to be done according to the terms of the law by which he is governed." (Willoughby on the Constitution of the United
States, 2nd ed., Vol. II, p. 1637.) In Miller vs. Mayer, etc., of New York [1883], 109 U.S., 3 Sup. Ct. Rep., 228; 27 Law. ed., 971, 974), it was
said: "The efficiency of an Act as a declaration of legislative will must, of course, come from Congress, but the ascertainment of the
contingency upon which the Act shall take effect may be left to such agencies as it may designate." (See, also, 12 C.J., p. 864; State vs.
Parker [1854], 26 Vt., 357; Blanding vs. Burr [1859], 13 Cal., 343, 258.) The legislature, then may provide that a contingencies leaving to
some other person or body the power to determine when the specified contingencies has arisen. But, in the case at bar, the legislature has
not made the operation of the Prohibition Act contingent upon specified facts or conditions to be ascertained by the provincial board. It
leaves, as we have already said, the entire operation or non-operation of the law upon the provincial board. the discretion vested is arbitrary
because it is absolute and unlimited. A provincial board need not investigate conditions or find any fact, or await the happening of any
specified contingency. It is bound by no rule, limited by no principle of expendiency announced by the legislature. It may take into
consideration certain facts or conditions; and, again, it may not. It may have any purpose or no purpose at all. It need not give any reason
whatsoever for refusing or failing to appropriate any funds for the salary of a probation officer. This is a matter which rest entirely at its
pleasure. The fact that at some future time we cannot say when the provincial boards may appropriate funds for the salaries of
probation officers and thus put the law into operation in the various provinces will not save the statute. The time of its taking into effect, we
reiterate, would yet be based solely upon the will of the provincial boards and not upon the happening of a certain specified contingency, or
upon the ascertainment of certain facts or conditions by a person or body other than legislature itself.

The various provincial boards are, in practical effect, endowed with the power of suspending the operation of the Probation Law in their
respective provinces. In some jurisdiction, constitutions provided that laws may be suspended only by the legislature or by its authority. Thus,
section 28, article I of the Constitution of Texas provides that "No power of suspending laws in this state shall be exercised except by the
legislature"; and section 26, article I of the Constitution of Indiana provides "That the operation of the laws shall never be suspended, except
by authority of the General Assembly." Yet, even provisions of this sort do not confer absolute power of suspension upon the legislature.
While it may be undoubted that the legislature may suspend a law, or the execution or operation of a law, a law may not be suspended as to
certain individuals only, leaving the law to be enjoyed by others. The suspension must be general, and cannot be made for individual cases
or for particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec., 174, 177, 178), it was said:

By the twentieth article of the declaration of rights in the constitution of this commonwealth, it is declared that the power of
suspending the laws, or the execution of the laws, ought never to be exercised but by the legislature, or by authority derived from
it, to be exercised in such particular cases only as the legislature shall expressly provide for. Many of the articles in that
declaration of rights were adopted from the Magna Charta of England, and from the bill of rights passed in the reign of William and
Mary. The bill of rights contains an enumeration of the oppressive acts of James II, tending to subvert and extirpate the protestant
religion, and the laws and liberties of the kingdom; and the first of them is the assuming and exercising a power of dispensing with
and suspending the laws, and the execution of the laws without consent of parliament. The first article in the claim or declaration
of rights contained in the statute is, that the exercise of such power, by legal authority without consent of parliament, is illegal. In
the tenth section of the same statute it is further declared and enacted, that "No dispensation by non obstante of or to any statute,
or part thereof, should be allowed; but the same should be held void and of no effect, except a dispensation be allowed of in such
statute." There is an implied reservation of authority in the parliament to exercise the power here mentioned; because, according
to the theory of the English Constitution, "that absolute despotic power, which must in all governments reside somewhere," is
intrusted to the parliament: 1 Bl. Com., 160.

The principles of our government are widely different in this particular. Here the sovereign and absolute power resides in the
people; and the legislature can only exercise what is delegated to them according to the constitution. It is obvious that the exercise
of the power in question would be equally oppressive to the subject, and subversive of his right to protection, "according to
standing laws," whether exercised by one man or by a number of men. It cannot be supposed that the people when adopting this
general principle from the English bill of rights and inserting it in our constitution, intended to bestow by implication on the general
court one of the most odious and oppressive prerogatives of the ancient kings of England. It is manifestly contrary to the first
principles of civil liberty and natural justice, and to the spirit of our constitution and laws, that any one citizen should enjoy
privileges and advantages which are denied to all others under like circumstances; or that ant one should be subject to losses,
damages, suits, or actions from which all others under like circumstances are exempted.

To illustrate the principle: A section of a statute relative to dogs made the owner of any dog liable to the owner of domestic animals wounded
by it for the damages without proving a knowledge of it vicious disposition. By a provision of the act, power was given to the board of
supervisors to determine whether or not during the current year their county should be governed by the provisions of the act of which that
section constituted a part. It was held that the legislature could not confer that power. The court observed that it could no more confer such a
power than to authorize the board of supervisors of a county to abolish in such county the days of grace on commercial paper, or to suspend
the statute of limitations. (Slinger vs. Henneman [1875], 38 Wis., 504.) A similar statute in Missouri was held void for the same reason in
State vs. Field ([1853, 17 Mo., 529;59 Am. Dec., 275.) In that case a general statute formulating a road system contained a provision that "if
the county court of any county should be of opinion that the provisions of the act should not be enforced, they might, in their discretion,
suspend the operation of the same for any specified length of time, and thereupon the act should become inoperative in such county for the
period specified in such order; and thereupon order the roads to be opened and kept in good repair, under the laws theretofore in force." Said
the court: ". . . this act, by its own provisions, repeals the inconsistent provisions of a former act, and yet it is left to the county court to say
which act shall be enforce in their county. The act does not submit the question to the county court as an original question, to be decided by
that tribunal, whether the act shall commence its operation within the county; but it became by its own terms a law in every county not
excepted by name in the act. It did not, then, require the county court to do any act in order to give it effect. But being the law in the county,
and having by its provisions superseded and abrogated the inconsistent provisions of previous laws, the county court is . . . empowered, to
suspend this act and revive the repealed provisions of the former act. When the question is before the county court for that tribunal to
determine which law shall be in force, it is urge before us that the power then to be exercised by the court is strictly legislative power, which
under our constitution, cannot be delegated to that tribunal or to any other body of men in the state. In the present case, the question is not
presented in the abstract; for the county court of Saline county, after the act had been for several months in force in that county, did by order
suspend its operation; and during that suspension the offense was committed which is the subject of the present indictment . . . ." (See
Mitchell vs. State [1901], 134 Ala., 392; 32 S., 687.)

True, the legislature may enact laws for a particular locality different from those applicable to other localities and, while recognizing the force
of the principle hereinabove expressed, courts in may jurisdiction have sustained the constitutionality of the submission of option laws to the
vote of the people. (6 R.C.L., p. 171.) But option laws thus sustained treat of subjects purely local in character which should receive different
treatment in different localities placed under different circumstances. "They relate to subjects which, like the retailing of intoxicating drinks, or
the running at large of cattle in the highways, may be differently regarded in different localities, and they are sustained on what seems to us
the impregnable ground, that the subject, though not embraced within the ordinary powers of municipalities to make by-laws and ordinances,
is nevertheless within the class of public regulations, in respect to which it is proper that the local judgment should control." (Cooley on
Constitutional Limitations, 5th ed., p. 148.) So that, while we do not deny the right of local self-government and the propriety of leaving
matters of purely local concern in the hands of local authorities or for the people of small communities to pass upon, we believe that in
matters of general of general legislation like that which treats of criminals in general, and as regards the general subject of probation,
discretion may not be vested in a manner so unqualified and absolute as provided in Act No. 4221. True, the statute does not expressly state
that the provincial boards may suspend the operation of the Probation Act in particular provinces but, considering that, in being vested with
the authority to appropriate or not the necessary funds for the salaries of probation officers, they thereby are given absolute discretion to
determine whether or not the law should take effect or operate in their respective provinces, the provincial boards are in reality empowered
by the legislature to suspend the operation of the Probation Act in particular provinces, the Act to be held in abeyance until the provincial
boards should decide otherwise by appropriating the necessary funds. The validity of a law is not tested by what has been done but by what
may be done under its provisions. (Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. J., p. 786.)

It in conceded that a great deal of latitude should be granted to the legislature not only in the expression of what may be termed legislative
policy but in the elaboration and execution thereof. "Without this power, legislation would become oppressive and yet imbecile." (People vs.
Reynolds, 5 Gilman, 1.) It has been said that popular government lives because of the inexhaustible reservoir of power behind it. It is
unquestionable that the mass of powers of government is vested in the representatives of the people and that these representatives are no
further restrained under our system than by the express language of the instrument imposing the restraint, or by particular provisions which
by clear intendment, have that effect. (Angara vs. Electoral Commission [1936], 35 Off. Ga., 23; Schneckenburger vs. Moran [1936], 35 Off.
Gaz., 1317.) But, it should be borne in mind that a constitution is both a grant and a limitation of power and one of these time-honored
limitations is that, subject to certain exceptions, legislative power shall not be delegated.

We conclude that section 11 of Act No. 4221 constitutes an improper and unlawful delegation of legislative authority to the provincial boards
and is, for this reason, unconstitutional and void.
3. It is also contended that the Probation Act violates the provisions of our Bill of Rights which prohibits the denial to any person of the equal
protection of the laws (Act. III, sec. 1 subsec. 1. Constitution of the Philippines.)

This basic individual right sheltered by the Constitution is a restraint on all the tree grand departments of our government and on the
subordinate instrumentalities and subdivision thereof, and on many constitutional power, like the police power, taxation and eminent domain.
The equal protection of laws, sententiously observes the Supreme Court of the United States, "is a pledge of the protection of equal laws."
(Yick Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup. Ct. Rep., 10464; Perley vs. North Carolina, 249 U. S., 510; 39 Sup. Ct.
Rep., 357; 63 Law. ed., 735.) Of course, what may be regarded as a denial of the equal protection of the laws in a question not always easily
determined. No rule that will cover every case can be formulated. (Connolly vs. Union Sewer Pipe Co. [1902], 184, U. S., 540; 22 Sup. Ct.,
Rep., 431; 46 Law. ed., 679.) Class legislation discriminating against some and favoring others in prohibited. But classification on a
reasonable basis, and nor made arbitrarily or capriciously, is permitted. (Finely vs. California [1911], 222 U. S., 28; 56 Law. ed., 75; 32 Sup.
Ct. Rep., 13; Gulf. C. & S. F. Ry Co. vs. Ellis [1897], 165 U. S., 150; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255; Smith, Bell & Co. vs. Natividad
[1919], 40 Phil., 136.) The classification, however, to be reasonable must be based on substantial distinctions which make real differences; it
must be germane to the purposes of the law; it must not be limited to existing conditions only, and must apply equally to each member of the
class. (Borgnis vs. Falk. Co. [1911], 147 Wis., 327, 353; 133 N. W., 209; 3 N. C. C. A., 649; 37 L. R. A. [N. S.], 489; State vs. Cooley, 56
Minn., 540; 530-552; 58 N. W., 150; Lindsley vs. Natural Carbonic Gas Co.[1911], 220 U. S., 61, 79, 55 Law. ed., 369, 377; 31 Sup. Ct. Rep.,
337; Ann. Cas., 1912C, 160; Lake Shore & M. S. R. Co. vs. Clough [1917], 242 U.S., 375; 37 Sup. Ct. Rep., 144; 61 Law. ed., 374; Southern
Ry. Co. vs. Greene [1910], 216 U. S., 400; 30 Sup. Ct. Rep., 287; 54 Law. ed., 536; 17 Ann. Cas., 1247; Truax vs. Corrigan [1921], 257 U.
S., 312; 12 C. J., pp. 1148, 1149.)

In the case at bar, however, the resultant inequality may be said to flow from the unwarranted delegation of legislative power, although
perhaps this is not necessarily the result in every case. Adopting the example given by one of the counsel for the petitioners in the course of
his oral argument, one province may appropriate the necessary fund to defray the salary of a probation officer, while another province may
refuse or fail to do so. In such a case, the Probation Act would be in operation in the former province but not in the latter. This means that a
person otherwise coming within the purview of the law would be liable to enjoy the benefits of probation in one province while another person
similarly situated in another province would be denied those same benefits. This is obnoxious discrimination. Contrariwise, it is also possible
for all the provincial boards to appropriate the necessary funds for the salaries of the probation officers in their respective provinces, in which
case no inequality would result for the obvious reason that probation would be in operation in each and every province by the affirmative
action of appropriation by all the provincial boards. On that hypothesis, every person coming within the purview of the Probation Act would be
entitled to avail of the benefits of the Act. Neither will there be any resulting inequality if no province, through its provincial board, should
appropriate any amount for the salary of the probation officer which is the situation now and, also, if we accept the contention that, for
the purpose of the Probation Act, the City of Manila should be considered as a province and that the municipal board of said city has not
made any appropriation for the salary of the probation officer. These different situations suggested show, indeed, that while inequality may
result in the application of the law and in the conferment of the benefits therein provided, inequality is not in all cases the necessary result.
But whatever may be the case, it is clear that in section 11 of the Probation Act creates a situation in which discrimination and inequality are
permitted or allowed. There are, to be sure, abundant authorities requiring actual denial of the equal protection of the law before court should
assume the task of setting aside a law vulnerable on that score, but premises and circumstances considered, we are of the opinion that
section 11 of Act No. 4221 permits of the denial of the equal protection of the law and is on that account bad. We see no difference between
a law which permits of such denial. A law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and illegal
discrimination, it is within the constitutional prohibitions. (By analogy, Chy Lung vs. Freeman [1876], 292 U. S., 275; 23 Law. ed., 550;
Henderson vs. Mayor [1876], 92 U. S., 259; 23 Law. ed., 543; Ex parte Virginia [1880], 100 U. S., 339; 25 Law. ed., 676; Neal vs. Delaware
[1881], 103 U. S., 370; 26 Law. ed., 567; Soon Hing vs. Crowley [1885], 113 U. S., 703; 28 Law. ed., 1145, Yick Wo vs. Hopkins [1886],118
U. S., 356; 30 Law. ed., 220; Williams vs. Mississippi [1897], 170 U. S., 218; 18 Sup. Ct. Rep., 583; 42 Law. ed., 1012; Bailey vs. Alabama
[1911], 219 U. S., 219; 31 Sup. Ct. Rep. 145; 55 Law. ed., Sunday Lake Iron Co. vs. Wakefield [1918], 247 U. S., 450; 38 Sup. Ct. Rep., 495;
62 Law. ed., 1154.) In other words, statutes may be adjudged unconstitutional because of their effect in operation (General Oil Co. vs. Clain
[1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law. ed., 754; State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944; Ann. Cas.,
1912D, 22). If the law has the effect of denying the equal protection of the law it is unconstitutional. (6 R. C. L. p. 372; Civil Rights Cases, 109
U. S., 3; 3 Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra; State vs. Montgomery, 94 Me., 192; 47 Atl., 165; 80 A. S. R.,
386; State vs. Dering, 84 Wis., 585; 54 N. W., 1104; 36 A. S. R., 948; 19 L. R. A., 858.) Under section 11 of the Probation Act, not only may
said Act be in force in one or several provinces and not be in force in other provinces, but one province may appropriate for the salary of the
probation officer of a given year and have probation during that year and thereafter decline to make further appropriation, and have no
probation is subsequent years. While this situation goes rather to the abuse of discretion which delegation implies, it is here indicated to
show that the Probation Act sanctions a situation which is intolerable in a government of laws, and to prove how easy it is, under the Act, to
make the guaranty of the equality clause but "a rope of sand". (Brewer, J. Gulf C. & S. F. Ry. Co. vs. Ellis [1897], 165 U. S., 150 154; 41
Law. ed., 666; 17 Sup. Ct. Rep., 255.)lawph!1.net

Great reliance is placed by counsel for the respondents on the case of Ocampo vs. United States ([1914], 234 U. S., 91; 58 Law. ed., 1231).
In that case, the Supreme Court of the United States affirmed the decision of this court (18 Phil., 1) by declining to uphold the contention that
there was a denial of the equal protection of the laws because, as held in Missouri vs. Lewis (Bowman vs. Lewis) decided in 1880 (101 U. S.,
220; 25 Law. ed., 991), the guaranty of the equality clause does not require territorial uniformity. It should be observed, however, that this
case concerns the right to preliminary investigations in criminal cases originally granted by General Orders No. 58. No question of legislative
authority was involved and the alleged denial of the equal protection of the laws was the result of the subsequent enactment of Act No. 612,
amending the charter of the City of Manila (Act No. 813) and providing in section 2 thereof that "in cases triable only in the court of first
instance of the City of Manila, the defendant . . . shall not be entitled as of right to a preliminary examination in any case where the
prosecuting attorney, after a due investigation of the facts . . . shall have presented an information against him in proper form . . . ." Upon the
other hand, an analysis of the arguments and the decision indicates that the investigation by the prosecuting attorney although not in the
form had in the provinces was considered a reasonable substitute for the City of Manila, considering the peculiar conditions of the city as
found and taken into account by the legislature itself.

Reliance is also placed on the case of Missouri vs. Lewis, supra. That case has reference to a situation where the constitution of Missouri
permits appeals to the Supreme Court of the state from final judgments of any circuit court, except those in certain counties for which
counties the constitution establishes a separate court of appeals called St. Louis Court of Appeals. The provision complained of, then, is
found in the constitution itself and it is the constitution that makes the apportionment of territorial jurisdiction.

We are of the opinion that section 11 of the Probation Act is unconstitutional and void because it is also repugnant to equal-protection clause
of our Constitution.

Section 11 of the Probation Act being unconstitutional and void for the reasons already stated, the next inquiry is whether or not the entire
Act should be avoided.

In seeking the legislative intent, the presumption is against any mutilation of a statute, and the courts will resort to elimination only
where an unconstitutional provision is interjected into a statute otherwise valid, and is so independent and separable that its
removal will leave the constitutional features and purposes of the act substantially unaffected by the process. (Riccio vs. Hoboken,
69 N. J. Law., 649, 662; 63 L. R. A., 485; 55 Atl., 1109, quoted in Williams vs. Standard Oil Co. [1929], 278 U.S., 235, 240; 73
Law. ed., 287, 309; 49 Sup. Ct. Rep., 115; 60 A. L. R., 596.) In Barrameda vs. Moir ([1913], 25 Phil., 44, 47), this court stated the
well-established rule concerning partial invalidity of statutes in the following language:

. . . where part of the a statute is void, as repugnant to the Organic Law, while another part is valid, the valid portion, if separable
from the valid, may stand and be enforced. But in order to do this, the valid portion must be in so far independent of the invalid
portion that it is fair to presume that the Legislative would have enacted it by itself if they had supposed that they could not
constitutionally enact the other. (Mutual Loan Co. vs. Martell, 200 Mass., 482; 86 N. E., 916; 128 A. S. R., 446; Supervisors of
Holmes Co. vs. Black Creek Drainage District, 99 Miss., 739; 55 Sou., 963.) Enough must remain to make a complete, intelligible,
and valid statute, which carries out the legislative intent. (Pearson vs. Bass. 132 Ga., 117; 63 S. E., 798.) The void provisions
must be eliminated without causing results affecting the main purpose of the Act, in a manner contrary to the intention of the
Legislature. (State vs. A. C. L. R., Co., 56 Fla., 617, 642; 47 Sou., 969; Harper vs. Galloway, 58 Fla., 255; 51 Sou., 226; 26 L. R.
A., N. S., 794; Connolly vs. Union Sewer Pipe Co., 184 U. S., 540, 565; People vs. Strassheim, 240 Ill., 279, 300; 88 N. E., 821;
22 L. R. A., N. S., 1135; State vs. Cognevich, 124 La., 414; 50 Sou., 439.) The language used in the invalid part of a statute can
have no legal force or efficacy for any purpose whatever, and what remains must express the legislative will, independently of the
void part, since the court has no power to legislate. (State vs. Junkin, 85 Neb., 1; 122 N. W., 473; 23 L. R. A., N. S., 839; Vide,
also,. U. S., vs. Rodriguez [1918], 38 Phil., 759; Pollock vs. Farmers' Loan and Trust Co. [1895], 158 U. S., 601, 635; 39 Law. ed.,
1108, 1125; 15 Sup. Ct. Rep., 912; 6 R.C.L., 121.)

It is contended that even if section 11, which makes the Probation Act applicable only in those provinces in which the respective provincial
boards provided for the salaries of probation officers were inoperative on constitutional grounds, the remainder of the Act would still be valid
and may be enforced. We should be inclined to accept the suggestions but for the fact that said section is, in our opinion, is inseparably
linked with the other portions of the Act that with the elimination of the section what would be left is the bare idealism of the system, devoid of
any practical benefit to a large number of people who may be deserving of the intended beneficial result of that system. The clear policy of
the law, as may be gleaned from a careful examination of the whole context, is to make the application of the system dependent entirely
upon the affirmative action of the different provincial boards through appropriation of the salaries for probation officers at rates not lower than
those provided for provincial fiscals. Without such action on the part of the various boards, no probation officers would be appointed by the
Secretary of Justice to act in the provinces. The Philippines is divided or subdivided into provinces and it needs no argument to show that if
not one of the provinces and this is the actual situation now appropriate the necessary fund for the salary of a probation officer,
probation under Act No. 4221 would be illusory. There can be no probation without a probation officer. Neither can there be a probation
officer without the probation system.

Section 2 of the Acts provides that the probation officer shall supervise and visit the probationer. Every probation officer is given, as to the
person placed in probation under his care, the powers of the police officer. It is the duty of the probation officer to see that the conditions
which are imposed by the court upon the probationer under his care are complied with. Among those conditions, the following are
enumerated in section 3 of the Act:

That the probationer (a) shall indulge in no injurious or vicious habits;

(b) Shall avoid places or persons of disreputable or harmful character;

(c) Shall report to the probation officer as directed by the court or probation officers;

(d) Shall permit the probation officer to visit him at reasonable times at his place of abode or elsewhere;

(e) Shall truthfully answer any reasonable inquiries on the part of the probation officer concerning his conduct or condition; "(f)
Shall endeavor to be employed regularly; "(g) Shall remain or reside within a specified place or locality;

(f) Shall make reparation or restitution to the aggrieved parties for actual damages or losses caused by his offense;

(g) Shall comply with such orders as the court may from time to time make; and

(h) Shall refrain from violating any law, statute, ordinance, or any by-law or regulation, promulgated in accordance with law.
The court is required to notify the probation officer in writing of the period and terms of probation. Under section 4, it is only after the period of
probation, the submission of a report of the probation officer and appropriate finding of the court that the probationer has complied with the
conditions of probation that probation may be definitely terminated and the probationer finally discharged from supervision. Under section 5,
if the court finds that there is non-compliance with said conditions, as reported by the probation officer, it may issue a warrant for the arrest of
the probationer and said probationer may be committed with or without bail. Upon arraignment and after an opportunity to be heard, the court
may revoke, continue or modify the probation, and if revoked, the court shall order the execution of the sentence originally imposed. Section
6 prescribes the duties of probation officers: "It shall be the duty of every probation officer to furnish to all persons placed on probation under
his supervision a statement of the period and conditions of their probation, and to instruct them concerning the same; to keep informed
concerning their conduct and condition; to aid and encourage them by friendly advice and admonition, and by such other measures, not
inconsistent with the conditions imposed by court as may seem most suitable, to bring about improvement in their conduct and condition; to
report in writing to the court having jurisdiction over said probationers at least once every two months concerning their conduct and condition;
to keep records of their work; make such report as are necessary for the information of the Secretary of Justice and as the latter may require;
and to perform such other duties as are consistent with the functions of the probation officer and as the court or judge may direct. The
probation officers provided for in this Act may act as parole officers for any penal or reformatory institution for adults when so requested by
the authorities thereof, and, when designated by the Secretary of Justice shall act as parole officer of persons released on parole under Act
Number Forty-one Hundred and Three, without additional compensation."

It is argued, however, that even without section 11 probation officers maybe appointed in the provinces under section 10 of Act which
provides as follows:

There is hereby created in the Department of Justice and subject to its supervision and control, a Probation Office under the
direction of a Chief Probation Officer to be appointed by the Governor-General with the advise and consent of the Senate who
shall receive a salary of four eight hundred pesos per annum. To carry out this Act there is hereby appropriated out of any funds in
the Insular Treasury not otherwise appropriated, the sum of fifty thousand pesos to be disbursed by the Secretary of Justice, who
is hereby authorized to appoint probation officers and the administrative personnel of the probation officer under civil service
regulations from among those who possess the qualifications, training and experience prescribed by the Bureau of Civil Service,
and shall fix the compensation of such probation officers and administrative personnel until such positions shall have been
included in the Appropriation Act.

But the probation officers and the administrative personnel referred to in the foregoing section are clearly not those probation officers
required to be appointed for the provinces under section 11. It may be said, reddendo singula singulis, that the probation officers referred to
in section 10 above-quoted are to act as such, not in the various provinces, but in the central office known as the Probation Office
established in the Department of Justice, under the supervision of the Chief Probation Officer. When the law provides that "the probation
officer" shall investigate and make reports to the court (secs. 1 and 4); that "the probation officer" shall supervise and visit the probationer
(sec. 2; sec. 6, par. d); that the probationer shall report to the "probationer officer" (sec. 3, par. c.), shall allow "the probationer officer" to visit
him (sec. 3, par. d), shall truthfully answer any reasonable inquiries on the part of "the probation officer" concerning his conduct or condition
(sec. 3, par. 4); that the court shall notify "the probation officer" in writing of the period and terms of probation (sec. 3, last par.), it means the
probation officer who is in charge of a particular probationer in a particular province. It never could have been intention of the legislature, for
instance, to require the probationer in Batanes, to report to a probationer officer in the City of Manila, or to require a probation officer in
Manila to visit the probationer in the said province of Batanes, to place him under his care, to supervise his conduct, to instruct him
concerning the conditions of his probation or to perform such other functions as are assigned to him by law.

That under section 10 the Secretary of Justice may appoint as many probation officers as there are provinces or groups of provinces is, of
course possible. But this would be arguing on what the law may be or should be and not on what the law is. Between is and ought there is a
far cry. The wisdom and propriety of legislation is not for us to pass upon. We may think a law better otherwise than it is. But much as has
been said regarding progressive interpretation and judicial legislation we decline to amend the law. We are not permitted to read into the law
matters and provisions which are not there. Not for any purpose not even to save a statute from the doom of invalidity.

Upon the other hand, the clear intention and policy of the law is not to make the Insular Government defray the salaries of probation officers
in the provinces but to make the provinces defray them should they desire to have the Probation Act apply thereto. The sum of P50,000,
appropriated "to carry out the purposes of this Act", is to be applied, among other things, for the salaries of probation officers in the central
office at Manila. These probation officers are to receive such compensations as the Secretary of Justice may fix "until such positions shall
have been included in the Appropriation Act". It was the intention of the legislature to empower the Secretary of Justice to fix the salaries of
the probation officers in the provinces or later on to include said salaries in an appropriation act. Considering, further, that the sum of
P50,000 appropriated in section 10 is to cover, among other things, the salaries of the administrative personnel of the Probation Office, what
would be left of the amount can hardly be said to be sufficient to pay even nominal salaries to probation officers in the provinces. We take
judicial notice of the fact that there are 48 provinces in the Philippines and we do not think it is seriously contended that, with the fifty
thousand pesos appropriated for the central office, there can be in each province, as intended, a probation officer with a salary not lower than
that of a provincial fiscal. If this a correct, the contention that without section 11 of Act No. 4221 said act is complete is an impracticable thing
under the remainder of the Act, unless it is conceded that in our case there can be a system of probation in the provinces without probation
officers.

Probation as a development of a modern penology is a commendable system. Probation laws have been enacted, here and in other
countries, to permit what modern criminologist call the "individualization of the punishment", the adjustment of the penalty to the character of
the criminal and the circumstances of his particular case. It provides a period of grace in order to aid in the rehabilitation of a penitent
offender. It is believed that, in any cases, convicts may be reformed and their development into hardened criminals aborted. It, therefore,
takes advantage of an opportunity for reformation and avoids imprisonment so long as the convicts gives promise of reform. (United States
vs. Murray [1925], 275 U. S., 347 357, 358; 72 Law. ed., 309; 312, 313; 48 Sup. Ct. Rep., 146; Kaplan vs. Hecht, 24 F. [2d], 664, 665.) The
Welfare of society is its chief end and aim. The benefit to the individual convict is merely incidental. But while we believe that probation is
commendable as a system and its implantation into the Philippines should be welcomed, we are forced by our inescapable duty to set the
law aside because of the repugnancy to our fundamental law.
In arriving at this conclusion, we have endeavored to consider the different aspects presented by able counsel for both parties, as well in
their memorandums as in their oral argument. We have examined the cases brought to our attention, and others we have been able to reach
in the short time at our command for the study and deliberation of this case. In the examination of the cases and in then analysis of the legal
principles involved we have inclined to adopt the line of action which in our opinion, is supported better reasoned authorities and is more
conducive to the general welfare. (Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) Realizing the conflict of authorities, we have declined
to be bound by certain adjudicated cases brought to our attention, except where the point or principle is settled directly or by clear implication
by the more authoritative pronouncements of the Supreme Court of the United States. This line of approach is justified because:

(a) The constitutional relations between the Federal and the State governments of the United States and the dual character of the
American Government is a situation which does not obtain in the Philippines;

(b) The situation of s state of the American Union of the District of Columbia with reference to the Federal Government of the
United States is not the situation of the province with respect to the Insular Government (Art. I, sec. 8 cl. 17 and 10th Amendment,
Constitution of the United States; Sims vs. Rives, 84 Fed. [2d], 871),

(c) The distinct federal and the state judicial organizations of the United States do not embrace the integrated judicial system of
the Philippines (Schneckenburger vs. Moran [1936], 35 Off. Gaz., p. 1317);

(d) "General propositions do not decide concrete cases" (Justice Holmes in Lochner vs. New York [1904], 198 U. S., 45, 76; 49
Law. ed., 937, 949) and, "to keep pace with . . . new developments of times and circumstances" (Chief Justice Waite in Pensacola
Tel. Co. vs. Western Union Tel. Co. [1899], 96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX, No. 2, Dec. 1919, 141,
142), fundamental principles should be interpreted having in view existing local conditions and environment.

Act No. 4221 is hereby declared unconstitutional and void and the writ of prohibition is, accordingly, granted. Without any pronouncement
regarding costs. So ordered.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-49112 February 2, 1979

LEOVILLO C. AGUSTIN, petitioner,


vs.
HON. ROMEO F. EDU, in his capacity as Land Transportation Commissioner;
HON. JUAN PONCE ENRILE, in his capacity as Minister of National Defense; HON.
ALFREDO L. JUINIO, in his capacity as Minister Of Public Works, Transportation
and Communications; and HON: BALTAZAR AQUINO, in his capacity as Minister
of Public Highways, respondents.

Leovillo C. Agustin Law Office for petitioner.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and
Solicitor Amado D. Aquino for respondents.

FERNANDO, J.:

The validity of a letter of Instruction 1 providing for an early seaming device for motor
vehicles is assailed in this prohibition proceeding as being violative of the constitutional
guarantee of due process and, insofar as the rules and regulations for its
implementation are concerned, for transgressing the fundamental principle of non-
delegation of legislative power. The Letter of Instruction is stigmatized by petitioner who
is possessed of the requisite standing, as being arbitrary and oppressive. A temporary
restraining order as issued and respondents Romeo F. Edu, Land Transportation
Commissioner Juan Ponce Enrile, Minister of National Defense; Alfredo L. Juinio,
Minister of Public Works, Transportation and Communications; and Baltazar Aquino,
Minister of Public Highways; were to answer. That they did in a pleading submitted by
Solicitor General Estelito P. Mendoza. 2 Impressed with a highly persuasive quality, it
makes devoid clear that the imputation of a constitutional infirmity is devoid of
justification The Letter of Instruction on is a valid police power measure. Nor could the
implementing rules and regulations issued by respondent Edu be considered as
amounting to an exercise of legislative power. Accordingly, the petition must be
dismissed.

The facts are undisputed. The assailed Letter of Instruction No. 229 of President
Marcos, issued on December 2, 1974, reads in full: "[Whereas], statistics show that one
of the major causes of fatal or serious accidents in land transportation is the presence of
disabled, stalled or parked motor vehicles along streets or highways without any
appropriate early warning device to signal approaching motorists of their presence;
[Whereas], the hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna Convention on Road
Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said
Vienna Convention which was ratified by the Philippine Government under P.D. No.
207, recommended the enactment of local legislation for the installation of road safety
signs and devices; [Now, therefore, I, Ferdinand E. Marcos], President of the
Philippines, in the interest of safety on all streets and highways, including expressways
or limited access roads, do hereby direct: 1. That all owners, users or drivers of motor
vehicles shall have at all times in their motor vehicles at least one (1) pair of early
warning device consisting of triangular, collapsible reflectorized plates in red and yellow
colors at least 15 cms. at the base and 40 cms. at the sides. 2. Whenever any motor
vehicle is stalled or disabled or is parked for thirty (30) minutes or more on any street or
highway, including expressways or limited access roads, the owner, user or driver
thereof shall cause the warning device mentioned herein to be installed at least four
meters away to the front and rear of the motor vehicle staged, disabled or parked. 3.
The Land Transportation Commissioner shall cause Reflectorized Triangular Early
Warning Devices, as herein described, to be prepared and issued to registered owners
of motor vehicles, except motorcycles and trailers, charging for each piece not more
than 15 % of the acquisition cost. He shall also promulgate such rules and regulations
as are appropriate to effectively implement this order. 4. All hereby concerned shall
closely coordinate and take such measures as are necessary or appropriate to carry
into effect then instruction. 3 Thereafter, on November 15, 1976, it was amended by
Letter of Instruction No. 479 in this wise. "Paragraph 3 of Letter of Instruction No. 229 is
hereby amended to read as follows: 3. The Land transportation Commissioner shall
require every motor vehicle owner to procure from any and present at the registration of
his vehicle, one pair of a reflectorized early warning device, as d bed of any brand or
make chosen by mid motor vehicle . The Land Transportation Commissioner shall also
promulgate such rule and regulations as are appropriate to effectively implement this
order.'" 4 There was issued accordingly, by respondent Edu, the implementing rules and
regulations on December 10, 1976. 5 They were not enforced as President Marcos on
January 25, 1977, ordered a six-month period of suspension insofar as the installation
of early warning device as a pre-registration requirement for motor vehicle was
concerned. 6 Then on June 30, 1978, another Letter of Instruction 7 the lifting of such
suspension and directed the immediate implementation of Letter of Instruction No. 229
as amended. 8 It was not until August 29, 1978 that respondent Edu issued
Memorandum Circular No. 32, worded thus: "In pursuance of Letter of Instruction No.
716, dated June 30, 1978, the implementation of Letter of Instruction No. 229, as
amended by Letter of Instructions No. 479, requiring the use of Early Warning Devices
(EWD) on motor vehicle, the following rules and regulations are hereby issued: 1. LTC
Administrative Order No. 1, dated December 10, 1976; shall now be implemented
provided that the device may come from whatever source and that it shall have
substantially complied with the EWD specifications contained in Section 2 of said
administrative order; 2. In order to insure that every motor vehicle , except motorcycles,
is equipped with the device, a pair of serially numbered stickers, to be issued free of
charge by this Commission, shall be attached to each EWD. The EWD. serial number
shall be indicated on the registration certificate and official receipt of payment of current
registration fees of the motor vehicle concerned. All Orders, Circulars, and Memoranda
in conflict herewith are hereby superseded, This Order shall take effect immediately. 9 It
was for immediate implementation by respondent Alfredo L. Juinio, as Minister of Public
Works, transportation, and Communications. 10

Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model
13035, already properly equipped when it came out from the assembly lines with
blinking lights fore and aft, which could very well serve as an early warning device in
case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as
well as the implementing rules and regulations in Administrative Order No. 1 issued by
the land transportation Commission," 11 alleged that said Letter of Instruction No. 229,
as amended, "clearly violates the provisions and delegation of police power, [sic] * * *: "
For him they are "oppressive, unreasonable, arbitrary, confiscatory, nay unconstitutional
and contrary to the precepts of our compassionate New Society." 12 He contended that
they are "infected with arbitrariness because it is harsh, cruel and unconscionable to the
motoring public;" 13 are "one-sided, onerous and patently illegal and immoral because
[they] will make manufacturers and dealers instant millionaires at the expense of car
owners who are compelled to buy a set of the so-called early warning device at the rate
of P 56.00 to P72.00 per set." 14 are unlawful and unconstitutional and contrary to the
precepts of a compassionate New Society [as being] compulsory and confiscatory on
the part of the motorists who could very well provide a practical alternative road safety
device, or a better substitute to the specified set of EWD's." 15 He therefore prayed for
a judgment both the assailed Letters of Instructions and Memorandum Circular void and
unconstitutional and for a restraining order in the meanwhile.

A resolution to this effect was handed down by this Court on October 19, 1978: "L-
49112 (Leovillo C. Agustin v. Hon. Romeo F. Edu, etc., et al.) Considering the
allegations contained, the issues raised and the arguments adduced in the petition for
prohibition with writ of p prohibitory and/or mandatory injunction, the Court Resolved to
(require) the respondents to file an answer thereto within ton (10) days from notice and
not to move to dismiss the petition. The Court further Resolved to [issue] a [temporary
restraining order] effective as of this date and continuing until otherwise ordered by this
Court.16

Two motions for extension were filed by the Office of the Solicitor General and granted.
Then on November 15, 1978, he Answer for respondents was submitted. After admitting
the factual allegations and stating that they lacked knowledge or information sufficient to
form a belief as to petitioner owning a Volkswagen Beetle car," they "specifically deny
the allegations and stating they lacked knowledge or information sufficient to form a
belief as to petitioner owning a Volkswagen Beetle Car, 17 they specifically deny the
allegations in paragraphs X and XI (including its subparagraphs 1, 2, 3, 4) of Petition to
the effect that Letter of Instruction No. 229 as amended by Letters of Instructions Nos.
479 and 716 as well as Land transportation Commission Administrative Order No. 1 and
its Memorandum Circular No. 32 violates the constitutional provisions on due process of
law, equal protection of law and undue delegation of police power, and that the same
are likewise oppressive, arbitrary, confiscatory, one-sided, onerous, immoral
unreasonable and illegal the truth being that said allegations are without legal and
factual basis and for the reasons alleged in the Special and Affirmative Defenses of this
Answer."18 Unlike petitioner who contented himself with a rhetorical recital of his litany
of grievances and merely invoked the sacramental phrases of constitutional litigation,
the Answer, in demonstrating that the assailed Letter of Instruction was a valid exercise
of the police power and implementing rules and regulations of respondent Edu not
susceptible to the charge that there was unlawful delegation of legislative power, there
was in the portion captioned Special and Affirmative Defenses, a citation of what
respondents believed to be the authoritative decisions of this Tribunal calling for
application. They are Calalang v. Williams, 19 Morfe v. Mutuc, 20 and Edu v. Ericta. 21
Reference was likewise made to the 1968 Vienna Conventions of the United Nations on
road traffic, road signs, and signals, of which the Philippines was a signatory and which
was duly ratified. 22 Solicitor General Mendoza took pains to refute in detail, in
language calm and dispassionate, the vigorous, at times intemperate, accusation of
petitioner that the assailed Letter of Instruction and the implementing rules and
regulations cannot survive the test of rigorous scrutiny. To repeat, its highly-persuasive
quality cannot be denied.

This Court thus considered the petition submitted for decision, the issues being clearly
joined. As noted at the outset, it is far from meritorious and must be dismissed.

1. The Letter of Instruction in question was issued in the exercise of the police power.
That is conceded by petitioner and is the main reliance of respondents. It is the
submission of the former, however, that while embraced in such a category, it has
offended against the due process and equal protection safeguards of the Constitution,
although the latter point was mentioned only in passing. The broad and expansive
scope of the police power which was originally Identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision as "nothing more or less than the powers
of government inherent in every sovereignty" 23 was stressed in the aforementioned
case of Edu v. Ericta thus: "Justice Laurel, in the first leading decision after the
Constitution came into force, Calalang v. Williams, Identified police power with state
authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare. Persons and property could thus 'be subjected to all
kinds of restraints and burdens in order to we the general comfort, health and prosperity
of the state.' Shortly after independence in 1948, Primicias v. Fugoso reiterated the
doctrine, such a competence being referred to as 'the power to prescribe regulations to
promote the health, morals, peace, education, good order or safety, and general welfare
of the people. The concept was set forth in negative terms by Justice Malcolm in a pre-
Commonwealth decision as 'that inherent and plenary power in the State which enables
it to prohibit all things hurtful to the comfort, safety and welfare of society. In that sense
it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc with the
totality of legislative power. It is in the above sense the greatest and most powerful at.
tribute of government. It is, to quote Justice Malcolm anew, 'the most essential,
insistent, and at least table powers, I extending as Justice Holmes aptly pointed out 'to
all the great public needs.' Its scope, ever-expanding to meet the exigencies of the
times, even to anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits. In the language of Justice Cardozo: 'Needs that were narrow or
parochial in the past may be interwoven in the present with the well-being of the nation.
What is critical or urgent changes with the time.' The police power is thus a dynamic
agency, suitably vague and far from precisely defined, rooted in the conception that
men in organizing the state and imposing upon its government limitations to safeguard
constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated
to communal peace, safety, good order, and welfare." 24

2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact


that the particular police power measure challenged was clearly intended to promote
public safety. It would be a rare occurrence indeed for this Court to invalidate a
legislative or executive act of that character. None has been called to our attention, an
indication of its being non-existent. The latest decision in point, Edu v. Ericta, sustained
the validity of the Reflector Law, 25 an enactment conceived with the same end in view.
Calalang v. Williams found nothing objectionable in a statute, the purpose of which was:
"To promote safe transit upon, and. avoid obstruction on roads and streets designated
as national roads * * *. 26 As a matter of fact, the first law sought to be nullified after the
effectivity of the 1935 Constitution, the National Defense Act, 27 with petitioner failing in
his quest, was likewise prompted by the imperative demands of public safety.

3. The futility of petitioner's effort to nullify both the Letter of Instruction and the
implementing rules and regulations becomes even more apparent considering his
failure to lay the necessary factual foundation to rebut the presumption of validity. So it
was held in Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila. 28 The rationale was clearly set forth in an excerpt from a decision of Justice
Branders of the American Supreme Court, quoted in the opinion: "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 in overthrowing the statute. 29

4. Nor did the Solicitor General as he very well could, rely solely on such rebutted
presumption of validity. As was pointed out in his Answer "The President certainly had
in his possession the necessary statistical information and data at the time he issued
said letter of instructions, and such factual foundation cannot be defeated by petitioner's
naked assertion that early warning devices 'are not too vital to the prevention of
nighttime vehicular accidents' because allegedly only 390 or 1.5 per cent of the
supposed 26,000 motor vehicle accidents that in 1976 involved rear-end collisions (p.
12 of petition). Petitioner's statistics is not backed up by demonstrable data on record.
As aptly stated by this Honorable Court: Further: "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"' * * *. But even as g the verity of petitioner's statistics, is that not reason enough to
require the installation of early warning devices to prevent another 390 rear-end
collisions that could mean the death of 390 or more Filipinos and the deaths that could
likewise result from head-on or frontal collisions with stalled vehicles?" 30 It is quite
manifest then that the issuance of such Letter of Instruction is encased in the armor of
prior, careful study by the Executive Department. To set it aside for alleged repugnancy
to the due process clause is to give sanction to conjectural claims that exceeded even
the broadest permissible limits of a pleader's well known penchant for exaggeration.

5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of
Instruction was exposed in the Answer of the Solicitor General thus: "Such early
warning device requirement is not an expensive redundancy, nor oppressive, for car
owners whose cars are already equipped with 1) blinking lights in the fore and aft of
said motor vehicles,' 2) "battery-powered blinking lights inside motor vehicles," 3) "built-
in reflectorized tapes on front and rear bumpers of motor vehicles," or 4) "well-lighted
two (2) petroleum lamps (the Kinke) * * * because: Being universal among the signatory
countries to the said 1968 Vienna Conventions, and visible even under adverse
conditions at a distance of at least 400 meters, any motorist from this country or from
any part of the world, who sees a reflectorized rectangular early seaming device
installed on the roads, highways or expressways, will conclude, without thinking, that
somewhere along the travelled portion of that road, highway, or expressway, there is a
motor vehicle which is stationary, stalled or disabled which obstructs or endangers
passing traffic. On the other hand, a motorist who sees any of the aforementioned other
built in warning devices or the petroleum lamps will not immediately get adequate
advance warning because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such confusion or
uncertainty in the mind of the motorist will thus increase, rather than decrease, the
danger of collision. 31

6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in


the Answer of the Solicitor General "There is nothing in the questioned Letter of
Instruction No. 229, as amended, or in Administrative Order No. 1, which requires or
compels motor vehicle owners to purchase the early warning device prescribed thereby.
All that is required is for motor vehicle owners concerned like petitioner, to equip their
motor vehicles with a pair of this early warning device in question, procuring or obtaining
the same from whatever source. In fact, with a little of industry and practical ingenuity,
motor vehicle owners can even personally make or produce this early warning device so
long as the same substantially conforms with the specifications laid down in said letter
of instruction and administrative order. Accordingly the early warning device
requirement can neither be oppressive, onerous, immoral, nor confiscatory, much less
does it make manufacturers and dealers of said devices 'instant millionaires at the
expense of car owners' as petitioner so sweepingly concludes * * *. Petitioner's fear that
with the early warning device requirement 'a more subtle racket may be committed by
those called upon to enforce it * * * is an unfounded speculation. Besides, that
unscrupulous officials may try to enforce said requirement in an unreasonable manner
or to an unreasonable degree, does not render the same illegal or immoral where, as in
the instant case, the challenged Letter of Instruction No. 229 and implementing order
disclose none of the constitutional defects alleged against it.32

7 It does appear clearly that petitioner's objection to this Letter of Instruction is not
premised on lack of power, the justification for a finding of unconstitutionality, but on the
pessimistic, not to say negative, view he entertains as to its wisdom. That approach, it
put it at its mildest, is distinguished, if that is the appropriate word, by its unorthodoxy. It
bears repeating "that this Court, in the language of Justice Laurel, 'does not pass upon
questions of wisdom justice or expediency of legislation.' As expressed by Justice
Tuason: 'It is not the province of the courts to supervise legislation and keep it within the
bounds of propriety and common sense. That is primarily and exclusively a legislative
concern.' There can be no possible objection then to the observation of Justice
Montemayor. 'As long as laws do not violate any Constitutional provision, the Courts
merely interpret and apply them regardless of whether or not they are wise or salutary.
For they, according to Justice Labrador, 'are not supposed to override legitimate policy
and * * * never inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief
Justice Concepcion in Gonzales v. Commission on Elections, that only congressional
power or competence, not the wisdom of the action taken, may be the basis for
declaring a statute invalid. This is as it ought to be. The principle of separation of
powers has in the main wisely allocated the respective authority of each department
and confined its jurisdiction to such a sphere. There would then be intrusion not
allowable under the Constitution if on a matter left to the discretion of a coordinate
branch, the judiciary would substitute its own. If there be adherence to the rule of law,
as there ought to be, the last offender should be courts of justice, to which rightly
litigants submit their controversy precisely to maintain unimpaired the supremacy of
legal norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent on is wisdom
cannot be sustained. 33

8. The alleged infringement of the fundamental principle of non-delegation of legislative


power is equally without any support well-settled legal doctrines. Had petitioner taken
the trouble to acquaint himself with authoritative pronouncements from this Tribunal, he
would not have the temerity to make such an assertion. An exempt from the aforecited
decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of unlawful
delegation, there must be a standard, which implies at the very least that the legislature
itself determines matters of principle and lays down fundamental policy. Otherwise, the
charge of complete abdication may be hard to repel A standard thus defines legislative
policy, marks its maps out its boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative command is to be effected. It is
the criterion by which legislative purpose may be carried out. Thereafter, the executive
or administrative office designated may in pursuance of the above guidelines
promulgate supplemental rules and regulations. The standard may be either express or
implied. If the former, the non-delegation objection is easily met. The standard though
does not have to be spelled out specifically. It could be implied from the policy and
purpose of the act considered as a whole. In the Reflector Law clearly, the legislative
objective is public safety. What is sought to be attained as in Calalang v. Williams is
"safe transit upon the roads.' This is to adhere to the recognition given expression by
Justice Laurel in a decision announced not too long after the Constitution came into
force and effect that the principle of non-delegation "has been made to adapt itself to
the complexities of modern governments, giving rise to the adoption, within certain
limits, of the principle of "subordinate legislation" not only in the United States and
England but in practically all modern governments.' He continued: 'Accordingly, with the
growing complexity of modern life, the multiplication of the subjects of governmental
regulation, and the increased difficulty of administering the laws, there is a constantly
growing tendency toward the delegation of greater powers by the legislature and toward
the approval of the practice by the courts.' Consistency with the conceptual approach
requires the reminder that what is delegated is authority non-legislative in character, the
completeness of the statute when it leaves the hands of Congress being assumed." 34

9. The conclusion reached by this Court that this petition must be dismissed is
reinforced by this consideration. The petition itself quoted these two whereas clauses of
the assailed Letter of Instruction: "[Whereas], the hazards posed by such obstructions to
traffic have been recognized by international bodies concerned with traffic safety, the
1968 Vienna Convention on Road Signs and Signals and the United Nations
Organization (U.N.); [Whereas], the said Vionna Convention, which was ratified by the
Philippine Government under P.D. No. 207, recommended the enactment of local
legislation for the installation of road safety signs and devices; * * * " 35 It cannot be
disputed then that this Declaration of Principle found in the Constitution possesses
relevance: "The Philippines * * * adopts the generally accepted principles of
international law as part of the law of the land * * *." 36 The 1968 Vienna Convention on
Road Signs and Signals is impressed with such a character. It is not for this country to
repudiate a commitment to which it had pledged its word. The concept of Pacta sunt
servanda stands in the way of such an attitude, which is, moreover, at war with the
principle of international morality.

10. That is about all that needs be said. The rather court reference to equal protection
did not even elicit any attempt on the Part of Petitioner to substantiate in a manner
clear, positive, and categorical why such a casual observation should be taken
seriously. In no case is there a more appropriate occasion for insistence on what was
referred to as "the general rule" in Santiago v. Far Eastern Broadcasting Co., 37
namely, "that the constitutionality of a law wig not be considered unless the point is
specially pleaded, insisted upon, and adequately argued." 38 "Equal protection" is not a
talismanic formula at the mere invocation of which a party to a lawsuit can rightfully
expect that success will crown his efforts. The law is anything but that.

WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is
immediately executory. No costs.

Castro, C.J., Barredo, Antonio, Santos, Fernandez, Guerrero, Abad Santos, De Castro
and Melencio-Herrera, concur.

AGUSTIN VS EDU

Generally Accepted Principles of International Law Police Power

Agustin is the owner of a Volkswagen Beetle Car. He is assailing the validity of Letter of
Instruction No 229 which requires all motor vehicles to have early warning devices particularly
to equip them with a pair of reflectorized triangular early warning devices. Agustin is arguing
that this order is unconstitutional, harsh, cruel and unconscionable to the motoring public. Cars
are already equipped with blinking lights which is already enough to provide warning to other
motorists. And that the mandate to compel motorists to buy a set of reflectorized early warning
devices is redundant and would only make manufacturers and dealers instant millionaires.

ISSUE: Whether or not the said is EO is valid.

HELD: Such early warning device requirement is not an expensive redundancy, nor oppressive,
for car owners whose cars are already equipped with 1) blinking-lights in the fore and aft of said
motor vehicles, 2) battery-powered blinking lights inside motor vehicles, 3) built-in
reflectorized tapes on front and rear bumpers of motor vehicles, or 4) well-lighted two (2)
petroleum lamps (the Kinke) . . . because: Being universal among the signatory countries to the
said 1968 Vienna Conventions, and visible even under adverse conditions at a distance of at least
400 meters, any motorist from this country or from any part of the world, who sees a
reflectorized rectangular early warning device installed on the roads, highways or expressways,
will conclude, without thinking, that somewhere along the travelled portion of that road,
highway, or expressway, there is a motor vehicle which is stationary, stalled or disabled which
obstructs or endangers passing traffic. On the other hand, a motorist who sees any of the
aforementioned other built-in warning devices or the petroleum lamps will not immediately get
adequate advance warning because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such confusion or
uncertainty in the mind of the motorist will thus increase, rather than decrease, the danger of
collision.

On Police Power

The Letter of Instruction in question was issued in the exercise of the police power. That is
conceded by petitioner and is the main reliance of respondents. It is the submission of the former,
however, that while embraced in such a category, it has offended against the due process and
equal protection safeguards of the Constitution, although the latter point was mentioned only in
passing. The broad and expansive scope of the police power which was originally identified by
Chief Justice Taney of the American Supreme Court in an 1847 decision, as nothing more or
less than the powers of government inherent in every sovereignty was stressed in the
aforementioned case of Edu v. Ericta thus: Justice Laurel, in the first leading decision after the
Constitution came into force, Calalang v. Williams, identified police power with state authority
to enact legislation that may interfere with personal liberty or property in order to promote the
general welfare. Persons and property could thus be subjected to all kinds of restraints and
burdens in order to secure the general comfort, health and prosperity of the state. Shortly after
independence in 1948, Primicias v. Fugoso reiterated the doctrine, such a competence being
referred to as the power to prescribe regulations to promote the health, morals, peace, education,
good order or safety, and general welfare of the people. The concept was set forth in negative
terms by Justice Malcolm in a pre-Commonwealth decision as that inherent and plenary power
in the State which enables it to prohibit all things hurtful to the comfort, safety and welfare of
society. In that sense it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc
with the totality of legislative power. It is in the above sense the greatest and most powerful
attribute of government. It is, to quote Justice Malcolm anew, the most essential, insistent, and
at least illimitable powers, extending as Justice Holmes aptly pointed out to all the great public
needs. Its scope, ever expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest benefits. In the language of Justice
Cardozo: Needs that were narrow or parochial in the past may be interwoven in the present with
the well-being of the nation. What is critical or urgent changes with the time. The police power
is thus a dynamic agency, suitably vague and far from precisely defined, rooted in the conception
that men in organizing the state and imposing upon its government limitations to safeguard
constitutional rights did not intend thereby to enable an individual citizen or a group of citizens
to obstruct unreasonably the enactment of such salutary measures calculated to insure communal
peace, safety, good order, and welfare.

It was thus a heavy burden to be shouldered by Agustin, compounded by the fact that the
particular police power measure challenged was clearly intended to promote public safety. It
would be a rare occurrence indeed for this Court to invalidate a legislative or executive act of
that character. None has been called to our attention, an indication of its being non-existent. The
latest decision in point, Edu v. Ericta, sustained the validity of the Reflector Law, an enactment
conceived with the same end in view. Calalang v. Williams found nothing objectionable in a
statute, the purpose of which was: To promote safe transit upon, and avoid obstruction on roads
and streets designated as national roads . . . As a matter of fact, the first law sought to be
nullified after the effectivity of the 1935 Constitution, the National Defense Act, with petitioner
failing in his quest, was likewise prompted by the imperative demands of public safety.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. 92646-47 October 4, 1991

AUGUSTO TOLEDO, petitioner,


vs.
CIVIL SERVICE COMMISSION and COMMISSION ON ELECTIONS, respondents.

Toledo & Toledo for petitioner.

Itaas-Fetalino, Limare and Huerta for CSC.

PARAS, J.:

Petitioner Atty. Augusto Toledo was appointed by then Comelec Chairman Ramon Felipe as
Manager of the Education and Information Department of the Comelec, on May 21, 1986. At the
time of his appointment, petitioner, having been born on July 8, 1927 was already more than
fifty-seven (57) years old. It was the first time petitioner joined the government service as he was
then engaged in active private practice prior to said appointment.

Petitioner's appointment papers, particularly Civil Service Form No. 333 and his oath of office
were endorsed by the Comelec to the Civil Service Commission (CSC, for brevity) on June 11,
1986, for approval and attestation. However, no prior request for exemption from the provisions
of Section 22, Rule III of the Civil Service Rules on Personnel Action and Policies (CSRPAP,
for brevity) was secured. Said provision prohibits the appointment of persons 57 years old or
above into the government service without prior approval by the Civil Service Commission
(CSC Memorandum Circular No. 5, Series of 1983).

Petitioner officially reported for work and assumed the functions of his office on June 16, 1986.

On January 29, 1989, public respondent Comelec, upon discovery of the lack of authority
required under Section 22, Rule III of the CSRPAP, and CSC Memorandum Circular No. 5,
Series of 1983 issued Resolution No. 2066, the pertinent portion of which is hereinbelow quoted,
to wit:
WHEREAS, for the validity then of the appointment of Atty. Toledo as Manager of the
Education and Information Department it was necessary that not only must prior
authority from the Civil Service Commission be obtained considering that he was more
than fifty-seven (57) years old at the time, it must as well be shown that (a) the exigencies
of the service so required, (b) Atty. Toledo possesses special qualification not possessed
by other officers or employees in the Commission, and (c) the vacancy cannot be filled
by promotion of qualified officers or employees in the Commission;

WHEREAS, there is nothing in the 120 File of Atty. Toledo that indicates that such
authority was even obtained from the Civil Service Commission or from the President of
the Philippines; moreover, conditions (a), (b) and (c) stated in the immediately preceding
clause did not then exist;

WHEREAS, the appointment then of Atty. Toledo was made in violation of law and
pursuant to Section 7, Rule III of the Civil Service Rules on Personnel Action, the
appointment was void from the beginning.

NOW, THEREFORE, be it resolved, as it is hereby resolved, to DECLARE as VOID


from the beginning the appointment of Atty. Augusto Toledo as Manager of the
Education and Information Department of this Commission. (pp. 49-50, Rollo)

Petitioner appealed the foregoing Comelec Resolution No. 2066 to public respondent CSC on
February 4, 1989.

On July 12, 1989, public respondent CSC promulgated Resolution No. 89-468 which disposed of
the appeal, thus:

WHEREFORE, foregoing premises considered, the Commission resolved to declare, as it


hereby declares the appointment of Augusto V. Toledo as Manager, Information and
Education Department, Commission on Elections, there being no basis in law, merely
voidable and not void ab initio. Hence, Atty. Toledo is considered a de facto officer from
the time he assumed office on June 16, 1986, until and up to the promulgation of
COMELEC Resolution No. 2066 on January 29, 1989. (pp. 35-36, Rollo)

Unable to obtain a reconsideration from the aforesaid Resolution, petitioner filed the present
petition for certiorari.

It is first contended by petitioner that CSC Resolution No. 89-468 is without legal basis because
the CSRPAP is invalid and unenforceable for not having been published in the Official Gazette
or in any newspaper of general circulation as required under Section 9(b) of P.D. 807. This being
the case, petitioner argues that the requirement of prior CSC authority to appoint persons 57
years or older under Section 22, Rule III of the CSRPAP has not "become effective" and cannot
be invoked against him.

It will be recalled that the Civil Service Act of 1959 (Republic Act No. 2260) took effect on June
19, 1959. That act, among other things, established a Civil Service Commission one of the
functions of which was, "with the approval by the President, to prescribe, amend, and enforce
suitable rules and regulations for carrying into effect the provisions of ... the Civil Service Law,"
said rules "to become effective thirty days after publication in the Official Gazette" [Sec. 16 (e)].

The Commission subsequently adopted and promulgated rules intended to carry the law into
effect, known as the Revised Civil Service Rules. Those rules were published in the supplement
to Vol. 58, No. 49 of the Official Gazette, dated December 3, 1962.

Section 5, Rule VI of those Revised Civil Service Rules provided that:

SEC. 5. No person shall be appointed or reinstated in the service if he is already 57 years


old, unless the President of the Philippines, President of the Senate, Speaker of the House
of Representatives, or the Chief Justice of the Supreme Court, as the case may be,
determines that he possesses special qualifications and his services are needed.

It is worthy of note, however, that the statute itself (RA 2260) contained no provision prohibiting
appointment or reinstatement in the Government service of any person who was already 57 years
old, or otherwise requiring that some limitation as regards to age be placed on employment in the
Government service. This prohibition was purely a creation of the Civil Service Commission.

On October 6, 1975, pursuant to the 1973 Constitution, Presidential Decree No. 807 was issued
by President Marcos, establishing "an independent Civil Service Commission." The decree,
known as the "Civil Service Decree of the Philippines," repealed or accordingly modified all
laws, rules, and regulations or parts thereof inconsistent" with its provisions (Sec. 59), although
it declared that "the former Civil Service Commission created under Republic Act No. 2260, as
amended, and as organized under the Integrated Reorganization Plan may serve as the nucleus of
the Civil Service Commission" (Fourth Whereas Clause, Preamble). Like RA 2260 which it
superseded, PD 807 empowered the Commission to "prescribe, amend, and enforce suitable rules
and regulations for carrying into effect the provisions of the Decree," and also provided that said
"rules and regulations shall become effective thirty (30) days after publication in the Official
Gazette or in any newspaper of general circulation."

The new Civil Service Commission adopted "rules and regulations for carrying into effect the
provisions" of the Civil Service Decree on November 20, 1983. The rules were named, "Civil
Service Rules on Personnel Actions and Policies" (CSRPAP). Section 22, Rule III of the
CSRPAP is substantially the same as Section 5, Rule VI of the quondam "Revised Civil Service
Rules" and it reads as follows:

SEC. 22. No person shall be appointed, reinstated, or re-employed in the service if he is


already 57 years old, unless the President, or the Chief Justice of the Supreme Court, in
the case of employees in the judiciary, determines that he possesses special qualifications
urgently needed by the hiring agency.

Omitted, it will be observed, was reference to the "President of the Senate" and the "Speaker of
the House of Representatives," both of whom were expressly mentioned in the counterpart
provision in the former rules (Section 5, Rule VI, supra).
Noteworthy, too, is that there is no provision at all in PD 807 dealing in any manner with the
appointment, reinstatement or re-employment in the Government service of any person already
57 years or any particular age, for that matter. Again, the provision regarding persons 57 years of
age was purely a creation of the Commission, having no reference to any provision in the decree
intended to be implemented.

It was this provision of the CSRPAP (Sec. 22, Rule III) which was applied to Toledo. According
to the CSC, since prior authority for Toledo's appointment had never been obtained indeed, it
would appear that the appointment papers were not transmitted by the COMELEC to the CSC
until February, 1989 at which time Toledo's appointment was "approved as permanent" by the
Executive Director of said CSCthe appointment had to be struck down.

Now, these rules and regulations (CSRPAP) were never published either in the Official Gazette
or any newspaper of general circulation, at least as of the time that Section 22, Rule III thereof
was applied to Toledo to the latter's prejudice. As much was admitted by the Chairman of the
Commission, Hon. Patricia A. Sto. Tomas in a letter written by her to Toledo dated February 2,
1989. In that letter, the Chairman stated that (a) the Commission had "no record of the
publication of said Rules ("Rules on Personnel Actions and Policies") in newspapers of general
circulation" although said Rules were "published and distributed by the National Media
Production Center in 1975," and that (b) only "the Rule on Promotion embodied in CSC
Resolution No. 83-343 repealing Rule V of the said Rules was published on August 15, 1983 in
Volume 79 No. 33 of the Official Gazette" (Annex I, petition). The lack of publication is also
attested by the Director of the National Printing Office who, in a Certification issued by him on
January 30, 1989, stated that "the RULES ON PERSONNEL ACTIONS AND POLICIES'
promulgated on November 20, 1975 by the Civil Service Commission implementing Presidential
Decree No. 807 was not submitted to this office for publication" (Annex J, petition).

The Revised Civil Service Rules implementing R.A. No. 2260 cannot be considered valid and
effective after RA 2260 was repealed and superseded by PD 807. PD 807 was obviously
intended to take the place of RA 2260. In all matters dealt with by both laws, the provisions of
PD 807 were obviously intended to be controlling. So, also, the rules promulgated by the Civil
Service Commission to carry the provisions of PD 807 into effect were meant to supersede or
take the place of the rules implementing RA 2260. In other words, PD 807 and the CSRPAP
were intended to make RA 2260 and its implementing rules functus officio, render them without
force and effect except only as regards any provision, if at all, not dealt with by PD 807 or the
CSRPAP.

Now, it may reasonably be assumed that the law-making authority at the time, the President, was
aware of the provision on 57-year old persons in the Revised Civil Service Rules promulgated
under RA 2260. Yet when he promulgated PD 807 the President did not see fit to incorporate
therein any provision regarding 57-year old persons or for that matter, to prescribe any age
beyond which persons could become ineligible for appointment, reintatement or re-employment.
This surely is an indication of an intention not to continue the provision in effect.

In any event, the provision on 57-year old persons in the Revised Civil Service Rules (under said
RA 2260) cannot be accorded validity. As already pointed out, it is entirely a creation of the
Civil Service Commission, having no basis in the law itself which it was meant to implement. It
cannot be related to or connected with any specific provision of the law which it is meant to
carry into effect, such as a requirement, for instance, that age should be reckoned as a factor in
the employment or reinstatement of an individual, or a direction that there be a determination of
some point in a person's life at which he becomes unemployable, or employable only under
specific conditions. It was therefore an unauthorized act of legislation on the part of the Civil
Service Commission. It cannot be justified as a valid exercise of its function of promulgating
rules and regulations for that function, to repeat, may legitimately be exercised only for the
purpose of carrying the provisions of the law into effect; and since there is no prohibition or
restriction on the employment of 57-year old persons in the statuteor any provision respecting
age as a factor in employmentthere was nothing to carry into effect through an implementing
rule on the matter.

The power vested in the Civil Service Commission was to implement the law or put it into effect,
not to add to it; to carry the law into effect or execution, not to supply perceived omissions in it.
"By its administrative regulations, of course, the law itself can not be extended; said regulations
'cannot amend an act of Congress.' " (Teoxon v. Members of the Board of Administrators,
Philippine Veterans Administration, 33 SCRA 585, 589 [1970], citing Santos v. Estenzo, 109
Phil. 419 [1960]; see also, Animos v. Philippine Veterans Affairs Office, 174 SCRA 214, 223-
224 [1989] in turn citing Teoxon).

The considerations just expounded also conduce to the conclusion of the invalidity of Section 22,
Rule III of the CSRPAP. The enactment of said section, relative to 57-year old persons, was also
an act of supererogation on the part of the Civil Service Commission since the rule has no
relation to or connection with any provision of the law supposed to be carried into effect. The
section was an addition to or extension of the law, not merely a mode of carrying it into effect.

Apart from this, the CSRPAP cannot be considered effective as of the time of the application to
Toledo of a provision thereof, for the reason that said rules were never published, as is admitted
on all sides. The argument that the CSRPAP need not be published, because they were "a mere
reiteration of existing law" and had been "circularized," flies in the teeth of the explicit and
categorical requirement of PD 807 that rules and regulations for carrying into effect the
provisions of the Decree shall become effective thirty (30) days after publication in the Official
Gazette or in any newspaper of general circulation. Moreover, the CSRPAP cannot properly be
considered a mere reiteration of existing law, for as already discussed, the implementing rule
governing 57-year old persons is invalid and cannot in any sense be considered "existing law."

Assuming without conceding that the rule regarding employment of 57-year old persons is valid
and enforceable, it can only apply, according to its express terms, to employees under the
supervision of the Chief Justice of the Supreme Court, or of the President of the Philippines,
these two being the only officials mentioned as having to give consent to the employment of said
persons. It cannot be construed as applying to employees over whom neither the President nor
the Chief Justice exercises supervision, such as the Senate or the House of Representatives, or
the COMELEC or other Constitutional Commissions.
One last word. There is absolutely no question about the fact that the only reason for Toledo's
separation from the service was the fact that he was already more than 57 years old when he was
invited to work in the COMELEC by its former Chairman, but through no fault of his own, not
all the conditions for his employment appear to have been satisfied. There is no question that it
was not Toledo's fault that his papers were tardily submitted to the Civil Service Commission
and approval of his appointment was made only by the Executive Director of the Commission
and not by the Chairman thereof (to whom the function of the President of approving
appointments like those of Toledo had been delegated under LOI 47, CSC Memo Circular No. 5,
Series of 1983). There is no question, too, that he was actively engaged in law practice when
taken into the COMELEC. There is absolutely no question about the fact that he was otherwise a
competent and efficient officer of the COMELEC and had not given the remotest cause for
dismissal. These are equitable considerations proscribing application to him of the provision in
question, assuming its validity, or impelling at least a restrictive application thereof so that it
may not work to his prejudice.

Premises considered, the petition is hereby GRANTED.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-32096 October 24, 1970

ROMEO F. EDU, in his capacity as Land Transportation Commissioner, petitioner,


vs.
HON. VICENTE G. ERICTA in his capacity as Judge of the Court of First Instance of
Rizal, Br. XVIII, Quezon City, and TEDDY C. GALO respondents.

Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General Hector C.
Fule and Solicitor Vicente A. Torres for petitioner.

Teddy C. Galo in his own behalf.

Judge Vicente Ericta in his own behalf.

FERNANDO, J.:.

Petitioner Romeo F. Edu, the Land Transportation Commissioner, would have us rule squarely
on the constitutionality of the Reflector Law1 in this proceeding for certiorari and prohibition against
respondent Judge, the Honorable Vicente G. Ericta of the Court of First Instance of Rizal, Quezon City
Branch, to annul and set aside his order for the issuance of a writ of preliminary injunction directed
against Administrative Order No. 2 of petitioner for the enforcement of the aforesaid statute, in a pending
suit in his court for certiorari and prohibition, filed by the other respondent Teddy C. Galo assailing; the
validity of such enactment as well as such administrative order. Respondent Judge, in his answer, would
join such a plea asking that the constitutional and legal questions raised be decided "once and for all."
Respondent Teddy C. Galo who was quite categorical in his assertion that both the challenged legislation
and the administrative order transgress the constitutional requirements of due process and non-
delegation, is not averse either to such a definitive ruling. Considering the great public interest involved
and the reliance by respondent Galo and the allegation that the repugnancy to the fundamental law could
be discerned on the face of the statute as enacted and the executive order as promulgated, this Court,
sees no obstacle to the determination in this proceeding of the constitutional questions raised. For
reasons to be hereafter stated, we sustain the validity of the Reflector Law and Administrative Order No.
2 issued in the implementation thereof, the imputation of constitutional infirmity being at best flimsy and
insubstantial.

As noted in the answer of respondent Judge, respondent Galo on his behalf and that of other motorist
filed on May 20, 1970 a suit for certiorari and prohibition with preliminary injunction assailing the validity of
the challenged Act as an invalid exercise of the police power, for being violative of the due process
clause. This he followed on May 28, 1970 with a manifestation wherein he sought as an alternative
remedy that, in the event that respondent Judge would hold said statute constitutional, Administrative
Order No. 2 of the Land Transportation Commissioner, now petitioner, implementing such legislation be
nullified as an undue exercise of legislative power. There was a hearing on the plea for the issuance of a
writ of preliminary injunction held on May 27. 1970 where both parties were duly represented, but no
evidence was presented. The next day, on May 28, 1970, respondent Judge ordered the issuance of a
preliminary injunction directed against the enforcement of such administrative order. There was the day
after, a motion for its reconsideration filed by the Solicitor General representing petitioner. In the
meanwhile, the clerk of court of respondent Judge issued, on June 1, 1970 the writ of preliminary
injunction upon the filing of the required bond. The answer before the lower court was filed by petitioner
Edu on June 4, 1970. Thereafter, on June 9, 1970, respondent Judge denied the motion for
reconsideration of the order of injunction. Hence this petition for certiorari and prohibition filed with this
court on June 18, 1970.

In a resolution of June 22, 1970, this Court required respondents to file an answer to the petition for
certiorari and prohibition. Respondent Judge, the Honorable Vicente G. Ericta, did file his answer on June
30, 1970 explaining why he restrained the enforcement of Administrative Order No. 2 and, as noted at the
outset, joining the Solicitor General in seeking that the legal questions raised namely the constitutionality
of the Reflector Law and secondly the validity of Administrative Order No. 2 alleged to be in excess of the
authority conferred on petitioner and therefore violative of the principle of non-delegation of legislative
power be definitely decided. It was on until July 6, 1970 that respondent Galo filed his answer seeking the
dismissal of this petition concentrating on what he considered to be the patent invalidity of Administrative
Order No. 2 as it went beyond the authority granted by the Reflector Law, even assuming that it is
constitutional. In the meanwhile, on July 2, 1970, the petition was called for hearing with Solicitor Vicente
Torres appearing for petitioner and respondent Galo for himself. It was made clear during the course of
such argumentation that the matter of the constitutionality of the Reflector Law was likewise under
consideration by this Court. The case is thus ripe for decision.

We repeat that we find for petitioner and sustain the Constitutionality of the Reflector Law as well as the
validity of Administrative Order No. 2.

1. The threshold question is whether on the basis of the petition, the answers, and the oral argument, it
would be proper for this Court to resolve the issue of the constitutionality of the Reflector Law. Our
answer, as indicated, is in the affirmative. It is to be noted that the main thrust of the petition before us is
to demonstrate in a rather convincing fashion that the challenged legislation does not suffer from the
alleged constitutional infirmity imputed to it by the respondent Galo. Since the special civil action for
certiorari and prohibition filed before him before respondent Judge would seek a declaration of nullity of
such enactment by the attribution of the violation the face thereof of the due process guarantee in the
deprivation of property rights, it would follow that there is sufficient basis for us to determine which view
should prevail. Moreover, any further hearing by respondent Judge would likewise to limited to a
discussion of the constitutional issues raised, no allegations of facts having made. This is one case then
where the question of validity is ripe for determination. If we do so, further effort need not be wasted and
time is saved moreover, the officials concerned as well as the public, both vitally concerned with a final
resolution of questions of validity, could know the definitive answer and could act accordingly. There is a
great public interest, as was mentioned, to be served by the final disposition of such crucial issue,
petitioner praying that respondent Galo be declared having no cause of action with respondent Judge
being accordingly directed to dismiss his suit.

There is another reinforcement to this avenue of approach. We have done so before in a suit, Climaco v.
Macadaeg, 2 involving the legality of a presidential directive. That was a petition for the review and reversal of a writ of preliminary
injunction issued by the then Judge Macadaeg. We there announced that we "have decided to pass upon the question of the validity of the
presidential directive ourselves, believing that by doing so we would be putting an end to a dispute, a delay in the disposition of which has
caused considerable damage and injury to the Government and to the tobacco planters themselves."

There is no principle of constitutional adjudication that bars this Court from similarly passing upon the question of the validity of a legislative
enactment in a proceeding before it to test the propriety of the issuance of a preliminary injunction. The same felt need for resolving once and
for all the vexing question as to the constitutionality of a challenged enactment and thus serve public interest exists. What we have done in
the case of an order proceeding from one of the coordinate branches, the executive, we can very well do in the matter before us involving the
alleged nullity of a legislative act. Accordingly, there is nothing to preclude the grant of the writs prayed for, the burden of showing the
constitutionality of the act having proved to be as will now be shown too much for respondent Galo.

2. The Reflector Law reads in full: "(g) Lights and reflector when parked or disabled. Appropriate parking lights or flares visible one
hundred meters away shall be displayed at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not
well-lighted or is placed in such manner as to endanger passing traffic. Furthermore, every motor vehicle shall be provided at all times with
built-in reflectors or other similar warning devices either pasted, painted or attached to its front and back which shall likewise be visible at
light at least one hundred meters away. No vehicle not provided with any of the requirements mentioned in this subsection shall be
registered."3 It is thus obvious that the challenged statute is a legislation enacted under the police power to
promote public safety.

Justice Laurel, in the first leading decision after the Constitution came to force, Calalang v. Williams,4
identified police power with state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare. Persons and property could thus "be subjected to all
kinds of restraints and burdens in order to secure the general comfort, health and prosperity of the state."
Shortly after independence in 1948, Primicias v. Fugoso,5 reiterated the doctrine, such a competence
being referred to as "the power to prescribe regulations to promote the health, morals, peace, education,
good order or safety, and general welfare of the people." The concept was set forth in negative terms by
Justice Malcolm in a pre-Commonwealth decision as "that inherent and plenary power in the State which
enables it to prohibit all things hurtful to the comfort, safety and welfare of society." 6 In that sense it could
be hardly distinguishable as noted by this Court in Morfe v. Mutuc7 with the totality of legislative power.

It is in the above sense the greatest and most powerful attribute of government. It is to quote Justice
Malcolm anew "the most essential, insistent, and at least illimitable of powers," 8 extending as Justice Holmes
aptly pointed out "to all the great public needs." 9 Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits. In the language of Justice Cardozo: "Needs that were narrow or parochial in the past may be interwoven in the present with
the well-being of the nation. What is critical or urgent changes with the
time." 10 The police power is thus a dynamic agency, suitably vague and far from precisely defined, rooted
in the conception that men in organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of citizens
to obstruct unreasonably the enactment of such salutary measures calculated to insure communal peace,
safety, good order, and welfare.

It would then be to overturn a host of decisions impressive for their number and unanimity were this Court
to sustain respondent Galo. 11 That we are not disposed to do, especially so as the attack on the
challenged statute ostensibly for disregarding the due process safeguard is angularly unpersuasive. It
would be to close one's eyes to the hazards of traffic in the evening to condemn a statute of this
character. Such an attitude betrays lack of concern for public safety. How can it plausibly alleged then
that there was no observance of due process equated as it has always been with that is reasonable? The
statute assailed is not infected with arbitrariness. It is not the product of whim or caprice. It is far from
oppressive. It is a legitimate response to a felt public need. It can stand the test of the most
unsymphatetic appraisal.

Respondent Galo is of a different mind, having been unable to resist the teaching of many American
State Court decisions referred to in the secondary source, American Jurisprudence principally relied upon
by him. He ought to have been cautioned against an indiscriminate acceptance of such doctrines
predicated on what was once a fundamental postulate in American public law, laissez faire.

It is to be admitted that there was a period when such a concept did influence American court decisions
on constitutional law. As was explicitly stated by Justice Cardozo speaking of that era: "Laissez-faire was
not only a counsel of caution which would do well to heed. It was a categorical imperative which
statesmen as well as judges must obey." 12 For a long time legislation tending to reduce economic
inequality foundered on the rock that was the due process clause, enshrining as it did the liberty of
contract, based on such a basic assumption.

The New Deal administration of President Roosevelt more responsive to the social and economic forces
at work changed matters greatly. By 1937, there was a greater receptivity by the American Supreme
Court to an approach not too reverential of property rights. Even earlier, in 1935, Professor Coker of Yale,
speaking as a historian, could already discern a contrary drift. He did note the expending range of
governmental activity in the United States. 13 What is undeniable is that by 1943, laissez-faire was no
longer the dominant theory. In the language of Justice Jackson in the leading case of West Virginia State
Board of Education v. Barnette: 14 "We must, transplant these rights to a soil in which the laissez-faire
concept or non-interference has withered at least as to economic affairs, and social advancements are
increasingly sought through closer integration of society and through expanded and strengthened
governmental controls."

While authoritative precedents from the United States federal and state jurisdictions were deferred to
when the Philippines was still under American rule, it cannot be said that the laissez-faire principle was
invariably adhered to by us even then As early as 1919, in the leading case of Rubi v. Provincial Board of
Mindoro, 15 Justice Malcolm already had occasion to affirm: "The doctrines of laissez-faire and of
unrestricted freedom of the individual, as axioms of economic and political theory, are of the past. The
modern period has shown a widespread belief in the amplest possible demonstration of government
activity. The Courts unfortunately have sometimes seemed to trail after the other two branches of the
Government in this progressive march." People v. Pomar, 16 a 1924 decision which held invalid under the
due process clause a provision providing for maternity leave with pay thirty days before and thirty days
after confinement could be cited to show that such a principle did have its day. It is to be remembered
though that our Supreme Court had no other choice as the Philippines was then under the United States,
and only recently the year before, the American Supreme Court in Adkins v. Children's Hospital, 17 in line
with the laissez-faire theory, did hold that a statute providing for minimum wages was constitutionally
infirm.

What is more, to erase any doubts, the Constitutional Convention saw to it that the concept of laissez-
faire was rejected. It entrusted to our government the responsibility of coping with social and economic
problems with the commensurate power of control over economic affairs. Thereby it could live up to its
commitment to promote the general welfare through state action. No constitutional objection to regulatory
measures adversely affecting property rights, especially so when public safety is the aim, is likely to be
heeded, unless of course on the clearest and most satisfactory proof of invasion of rights guaranteed by
the Constitution. On such a showing, there may be a declaration of nullity, but not because the laissez-
faire principle was disregarded but because the due process, equal protection, or non-impairment
guarantees would call for vindication.

To repeat, our Constitution which took effect in 1935 erased whatever doubts there might be on that
score. Its philosophy is a repudiation of laissez-faire. One of the leading members of the Constitutional
Convention, Manuel A. Roxas, later the first President of the Republic, made it clear when he disposed of
the objection of Delegate Jose Reyes of Sorsogon, who noted the "vast extensions in the sphere of
governmental functions" and the "almost unlimited power to interfere in the affairs of industry and
agriculture as well as to compete with existing business" as "reflections of the fascination exerted by [the
then] current tendencies" in other jurisdictions. 18 He spoke thus: "My answer is that this constitution has
definite and well defined philosophy not only political but social and economic. ... If in this Constitution the
gentlemen will find declarations of economic policy they are there because they are necessary to
safeguard the interests and welfare of the Filipino people because we believe that the days have come
when in self-defense, a nation may provide in its constitution those safeguards, the patrimony, the
freedom to grow, the freedom to develop national aspirations and national interests, not to be hampered
by the artificial boundaries which a constitutional provision automatically imposes. 19

It was not expected then when in a concurring opinion, Justice Laurel, who likewise sat in the
Constitutional Convention and was one of its leading lights, explicitly affirmed in a concurring opinion,
later quoted with approval in the leading case of Antamok Goldfields Mining Co. v. Court of Industrial
Relations, 20 that the Constitution did away with the laissez-faire doctrine. In the course of such concurring opinion and after noting the
changes that have taken place calling for a more affirmative role by the government and its undeniable power to curtail property rights, he
categorically declared the doctrine in People v. Pomar no longer retains "its virtuality as a living principle." 21

It is in the light of such rejection of the laissez-faire principle that during the Commonwealth era, no constitutional infirmity was found to have
attached to legislation covering such subjects as collective bargaining, 22 security of tenure, 23 minimum wages, 24 compulsory arbitration,
25 the regulation of tenancy 26 as well as the issuance of
securities, 27 and control of public services. 28 So it is likewise under the Republic this Court having given the seal of approval to more
favorable tenancy laws, 29 nationalization of the retail trade, 30 limitation of the hours of labor, 31 imposition of price
control, 32 requirement of separation pay for one month, 33 and social security scheme. 34

Respondent Galo thus could have profited by a little more diligence in the scrutiny of Philippine decisions
rendered with not unexpected regularity, during all the while our Constitution has been in force attesting
to the demise of such a shibboleth as laissez-faire. It was one of those fighting faiths that time and
circumstances had upset, to paraphrase Holmes. Yet respondent Galo would seek to vivify and resurrect
it. That, it would appear, is a vain quest, a futile undertaking. The Reflector Law is thus immune from the
attack so recklessly hurled against it. It can survive, and quite easily too, the constitutional test.

3. The same lack of success marks the effort of respondent Galo to impugn the validity of Administrative
Order No. 2 issued by petitioner in his official capacity, duly approved by the Secretary of Public Works
and Communications, for being contrary to the principle of non-delegation of legislative power. Such
administrative order, which took effect on April 17, 1970, has a provision on reflectors in effect
reproducing what was set forth in the Act. Thus: "No motor vehicles of whatever style, kind, make, class
or denomination shall be registered if not equipped with reflectors. Such reflectors shall either be factory
built-in-reflector commercial glass reflectors, reflection tape or luminous paint. The luminosity shall have
an intensity to be maintained visible and clean at all times such that if struck by a beam of light shall be
visible 100 meters away at night." 35 Then came a section on dimensions, placement and color. As to
dimensions the following is provided for: "Glass reflectors Not less than 3 inches in diameter or not
less than 3 inches square; Reflectorized Tape At least 3 inches wide and 12 inches long. The painted
or taped area may be bigger at the discretion of the vehicle owner." 36 Provision is then made as to how
such reflectors are to be "placed, installed, pasted or painted." 37 There is the further requirement that in
addition to such reflectors there shall be installed, pasted or painted four reflectors on each side of the
motor vehicle parallel to those installed, pasted or painted in front and those in the rear end of the body
thereof. 38 The color required of each reflectors, whether built-in, commercial glass, reflectorized tape or
reflectorized paint placed in the front part of any motor vehicle shall be amber or yellow and those placed
on the sides and in the rear shall all be red. 39

Penalties resulting from a violation thereof could be imposed. Thus: "Non-compliance with the
requirements contained in this Order shall be sufficient cause to refuse registration of the motor vehicle
affected and if already registered, its registration maybe suspended in pursuance of the provisions of
Section 16 of RA 4136; [Provided], However, that in the case of the violation of Section 1(a) and (b) and
paragraph (8) Section 3 hereof, a fine of not less than ten nor more than fifty pesos shall be imposed. 40 It
is not to be lost sight of that under Republic Act No. 4136, of which the Reflector Law is an amendment,
petitioner, as the Land Transportation Commissioner, may, with the approval of the Secretary of Public
Works and Communications, issue rules and regulations for its implementation as long as they do not
conflict with its provisions. 41 It is likewise an express provision of the above statute that for a violation of
any of its provisions or regulations promulgated pursuant thereto a fine of not less than P10 nor not less
than P50 could be imposed. 42

It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of the government, subject to the exception that
local governments may over local affairs participate in its exercise. What cannot be delegated is the
authority under the Constitution to make laws and to alter and repeal them; the test is the completeness
of the statute in all its term and provisions when it leaves the hands of the legislature. To determine
whether or not there is an undue delegation of legislative power the inquiry must be directed to the scope
and definiteness of the measure enacted. The legislature does not abdicate its functions when it
describes what job must be done, who is to do it, and what is the scope of his authority. For a complex
economy, that may indeed be the only way in which the legislative process can go forward. A distinction
has rightfully been made between delegation of power to make the laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or
discretion as to its execution to exercised under and in pursuance of the law, to which no valid objection
call be made. The Constitution is thus not to be regarded as denying the legislature the necessary
resources of flexibility and practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lay down fundamental policy. Otherwise, the charge
of complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, its
maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under
which the legislative command is to be effected. It is the criterion by which legislative purpose may be
carried out. Thereafter, the executive or administrative office designated may in pursuance of the above
guidelines promulgate supplemental rules and regulations.

The standard may be either express or implied. If the former, the non-delegation objection is easily met.
The standard though does not have to be spelled out specifically. It could be implied from the policy and
purpose of the act considered as a whole. In the Reflector Law, clearly the legislative objective is public
safety. That is sought to be attained as in Calalang v. Williams is "safe transit upon the roads." 43

This is to adhere to the recognition given expression by Justice Laurel in a decision announced not long
after the Constitution came into force and effect that the principle of non-delegation "has been made to
adapt itself the complexities of modern governments, giving rise to the adoption, within certain limits, of
the principle of "subordinate legislation" not only in the United States and England but in practically all
modern governments." 44 He continued: "Accordingly, with the growing complexity of modern life, the
multiplication of the subjects of governmental regulation, and the increased difficulty of administering the
laws, there is a constantly growing tendency toward the delegation of greater powers by the legislature
and toward the approval of the practice by the courts." 45 Consistency with the conceptual approach
requires the reminder that what is delegated is authority non-legislative in character, the completeness of
the statute when it leaves the hands of Congress being assumed.

Our later decisions speak to the same effect. Thus from, Justice J. B. L. Reyes in People vs. Exconde: 46
"It is well establish in this jurisdiction that, while the making of laws is a non-delegable activity that
corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority to
promulgate rules and regulations to implement a given legislation and effectuate its policies, for the
reason that the legislature often finds it impracticable (if not impossible) to anticipate and proved for the
multifarious and complex situations that may be met in carrying the law in effect. All that is required is that
the regulation should germane to the objects and purposes of the law; that the regulation be not in
contradiction with it; but conform to the standards that the law prescribes ... " 47
An even more explicit formulation of the controlling principle comes from the pen of the then Justice, now
Chief Justice, Concepcion: "Lastly, the legality of Circular No. 21 is assailed upon the ground that the
grant of authority to issue the same constitutes an undue delegation of legislative power. It is true that,
under our system of government, said power may not be delegated except to local governments.
However, one thing is to delegate the power to determine what the law shall be, and another thing to
delegate the authority to fix the details in the execution of enforcement of a policy set out in the law itself.
Briefly stated, the rule is that the delegated powers fall under the second category, if the law authorizing
the, delegation furnishes a reasonable standard which "sufficiently marks the field within which the
Administrator is to act so that it may be known whether he has kept within it in compliance with the
legislative will." (Yakus vs. United States, 88 L. ed.
848) ... It should be noted, furthermore, that these powers must be construed and exercised in relation to
the objectives of the law creating the Central Bank, which are, among others, "to maintain monetary
stability in the Philippines," and "to promote a rising level of production, employment and real income in
the Philippines." (Section 2, Rep. Act No. 265). These standards are sufficiently concrete and definite to
vest in the delegated authority, the character of administrative details in the enforcement of the law and to
place the grant said authority beyond the category of a delegation of legislative powers ... " 48

It bears repeating that the Reflector Law construed together with the Land Transportation Code. Republic
Act No. 4136, of which it is an amendment, leaves no doubt as to the stress and emphasis on public
safety which is the prime consideration in statutes of this character. There is likewise a categorical
affirmation Of the power of petitioner as Land Transportation Commissioner to promulgate rules and
regulations to give life to and translate into actuality such fundamental purpose. His power is clear. There
has been no abuse. His Administrative Order No. 2 can easily survive the attack, far-from-formidable,
launched against it by respondent Galo.

WHEREFORE, the writs of certiorari and prohibition prayed for are granted, the orders of May 28, 1970 of
respondent Judge for the issuance of a writ of preliminary injunction, the writ of preliminary injunction of
June 1, 1970 and his order of June 9, 1970 denying reconsideration are annulled and set aside.
Respondent Judge is likewise directed to dismiss the petition for certiorari and prohibition filed by
respondent Teddy C. Galo, there being no cause of action as the Reflector Law and Administrative Order
No. 2 of petitioner have not been shown to be tainted by invalidity. Without pronouncement as to costs.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Barredo and Makasiar, JJ.,
concur.

Concepcion, C.J. and Villamor, J., took no part.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-17821 November 29, 1963

PRIMITIVO LOVINA, and NELLY MONTILLA, plaintiffs-appellees,


vs.
HON. FLORENCIO MORENO, as Secretary of Public Works and Communications, and
BENJAMIN YONZON, defendants-appellants.
Gil R. Carlos and Associates for plaintiffs-appellees.
Office of the Solicitor General for defendants-appellants.

REYES, J.B.L., J.:

This is an appeal from a decision of the Court of First Instance of Manila (Branch X), in its Civil
Case No. 41639, enjoining the Secretary of Public Works and Communications from causing the
removal of certain dams and dikes in a fishpond owned by Primitivo and Nelly Lovina in the
Municipality of Macabebe Province of Pampanga, covered by T.C.T. No. 15905.

The cause started by a petition of numerous residents of the said municipality to the Secretary of
Public Works and Communications, complaining that appellees had blocked the "Sapang
Bulati", a navigable river in Macabebe, Pampanga, and asking that the obstructions be ordered
removed, under the provisions of Republic Act No. 2056. After notice and hearing to the parties,
the said Secretary found the constructions to be a public nuisance in navigable waters, and, in his
decision dated 11 August 1959, ordered the land owners, spouses Lovina, to remove five (5)
closures of Sapang Bulati; otherwise, the Secretary would order their removal at the expense of
the respondent. After receipt of the decision, the respondent filed a petition in the Court of First
Instance of Manila to restrain the Secretary from enforcing his decision. The trial court, after due
hearing, granted a permanent injunction, which is now the subject of the present appeal.

The respondents-appellants, Florencio Moreno, Secretary of Public Works and Communications,


and Benjamin Yonzon, investigator, question the jurisdiction of the trial court, and attribute to it
the following errors:

1. The trial court erred in holding in effect, that Republic Act No. 2056 is
unconstitutional:

2. The trial court erred in receiving evidence de novo at the trial of the case;

3. The trial court erred in substituting its judgment for that of defendant Secretary of
Public Works and Communications and in reversing the latter's finding that the stream in
question is a navigable river which was illegally closed by plaintiffs;

4. The trial court erred in holding that the Sapang Bulati is a private stream; and

5. The lower court erred in not holding that plaintiffs should first exhaust administrative
remedy before filing the instant petition.

The position of the plaintiffs-appellees in the court below was that Republic Act No. 2056 is
unconstitutional because it invests the Secretary of Public Works and Communications with
sweeping, unrestrained, final and unappealable authority to pass upon the issues of whether a
river or stream is public and navigable, whether a dam encroaches upon such waters and is
constitutive as a public nuisance, and whether the law applies to the state of facts, thereby
Constituting an alleged unlawful delegation of judicial power to the Secretary of Public Works
and Communications.
Sections 1 and 2 of Republic Act 2056 provides:

Section 1. Any provision or provisions of law to the contrary notwithstanding, the


construction or building of dams, dikes or any other works which encroaches into any
public navigable river, stream, coastal waters and any other navigable public waters or
waterways as well as the construction or building of dams, dikes or any other works in
areas declared as communal fishing grounds, shall be ordered removed as public
nuisances or a prohibited constructions as herein provided: Provided, however, That the
Secretary of Public Works and Communications may authorize the construction of any
such work when public interest or safety so requires or when it is absolutely necessary for
the protection of private property.

Section 2. When it is found by the Secretary of Public Works and Communications, after
due notice and hearing, that any dam, dike or any other works now existing or may there
after be constructed encroaches into any public navigable waters, or that they are
constructed in areas declared as communal fishing grounds, he shall have the authority to
order the removal of any such works and shall give the party concerned a period not to
exceed thirty days for the removal of the same: Provided, That fishpond constructions or
works on communal fishing grounds introduced in good faith before the areas we
proclaimed as fishing grounds shall be exempted from the provisions of this Act,
provided such constructions or works do not obstruct or impede the free passage of any
navigable river, stream, or would not cause inundations of agricultural areas: Provided,
further, That should the party concerned fail to comply with the order of the Secretary of
Public Works and Communications within the period so stated in the order, such removal
shall be effected by the Secretary of Public Works and Communications at the expense of
the said party within ten days following the expiration of the period given the party
concerned: Provided, furthermore, That the investigation and hearing to be conducted by
the Secretary of Public Works and Communications under this section shall be terminated
and decided by him within a period which shall not exceed ninety days from the time he
shall have been notified in writing or a written complaint shall have been filed with him
by any interested party apprising him of the existence of a dam, dike or any other works
that encroaches into any other public navigable river, stream, coastal waters or any other
public navigable waters or waterways and in areas declared as communal fishing
grounds: Provided, still furthermore, That the failure on the part of the Secretary of
Public Works and Communications without justifiable or valid reason to terminate and
decide a case or effect the removal of any such works, as provided for in this section,
shall constitute an offense punishable under section three of this Act: And provided,
finally, That the removal of any such works shall not impair fishponds completed or
about to be completed which do not encroach or obstruct any public navigable river or
stream and/or which would not cause inundations of agricultural areas and which have
been constructed in good faith before the area was declared communal fishing grounds.

The objections of the appellees to the constitutionality of Republic Act No. 2056, not only as an
undue delegation of judicial power to the Secretary of Public Works but also for being
unreasonable and arbitrary, are not tenable. It will be noted that the Act (R.A. 2056) merely
empowers the Secretary to remove unauthorized obstructions or encroachments upon public
streams, constructions that no private person was anyway entitled to make, because the bed of
navigable streams is public property, and ownership thereof is not acquirable by adverse
possession (Palanca vs. Commonwealth, 69 Phil. 449).

It is true that the exercise of the Secretary's power under the Act necessarily involves the
determination of some questions of fact, such as the existence of the stream and its previous
navigable character; but these functions, whether judicial or quasi-judicial, are merely incidental
to the exercise of the power granted by law to clear navigable streams of unauthorized
obstructions or encroachments, and authorities are clear that they are, validly conferable upon
executive officials provided the party affected is given opportunity to be heard, as is expressly
required by Republic Act No. 2056, section 2.

It thus appears that the delegation by Congress to executive or administrative agencies of


functions of judicial, or at least, quasi-judicial functions is incidental to the exercise by
such agencies of their executive or administrative powers, is not in violation of the
Separation of Powers so far as that principle is recognized by the Federal Constitution nor
is it in violation of due process of law. (3 Willoughby on the Const. of the U.S., pp. 1654-
1655)

The mere fact that an officer is required by law to inquire the existence of certain facts
and to apply the law thereto in order to determine what his official conduct shall be and
the fact that these acts may affect private, rights do not constitute an exercise of judicial
powers. Accordingly, a statute may give to non-judicial officers the power to declare the
existence of facts which call into operation its provisions, and similarly may grant to
commissioners and other subordinate officer, power to ascertain and determine
appropriate facts as a basis for procedure in the enforcement of particular laws. (11 Am.
Jur., Const. Law, p. 950, sec. 235)

s. 237. Powers to determine cases within Statute. One important class of cases in
which discretion may properly be vested in administrative officers, which class is almost
an operation of the general rule relating to the ascertainment of facts, consists of those
cases in which a general rule or prohibition is laid down and power is vested in an
executive officer to determine when particular cases do or do not fall within such rule or
prohibition. Power exercised under such statutes, calling for the exercise of judgment in
the execution of a ministerial act, is never judicial in nature within the sense prohibited
by the Constitution. (11 Am. Jur., Const. Law, sec. 237, p. 952)

A direct precedent can be found in the "Bridge cases" upholding the constitutionality of the U.S.
River and Harbor Act of March 3, 1899, that empowered (sec. 18) the Secretary of War to take
action, after hearing, for the removal or alteration of bridges unreasonably obstructing
navigation. On the issue of undue delegation of power, the U.S. Supreme Court ruled as follows:

Congress thereby declared that whenever the Secretary of War should find any bridge
theretofore or thereafter constructed over any of the navigable waterways of the United
States to be an unreasonable obstruction to the free navigation of such waters on account
of insufficient height, width of span, or otherwise, it should be the duty of the Secretary,
after hearing the parties concerned, to take action looking to the removal or alteration of
the bridge, so as to render navigation through or under it reasonably free, easy, and
unobstructed. As this court repeatedly has held, this is not an unconstitutional delegation
of legislative or judicial power to the Secretary. Union Bridge Co. vs. United States, 204
U.S. 364, 385, 51 L. ed. 523, 533, 27 Sup. Ct. Rep. 367; Monongahela Bridge Co. v.
United States, 216 U.S. 177, 192,54 L. ed. 435, 441, 30 Sup. Ct. Rep. 356; Hannibal
Bridge Co. v. United States, 221 U.S. 194. 205, 55 L. ed. 699, 703, 31 Sup. Ct. Rep. 603.
The statute itself prescribes the general rule applicable to all navigable waters, and
merely charged the Secretary of War with the duty of ascertaining in each case, upon
notice to the parties concerned, whether the particular bridge came within the general
rule. Of course, the Secretary's finding must be based upon the conditions as they exist at
the time he acts. But the law imposing this duty upon him speaks from the time of its
enactment. (Louisville Bridge Co. v. U.S., 61 L. ed. 395). (Emphasis supplied)

Appellees invoke American rulings that abatement as nuisances of properties of great value can
not be done except through court proceedings; but these rulings refer to summary abatements
without previous hearing, and are inapplicable to the case before us where the law provides, and
the investigator actually held, a hearing with notice to the complainants and the, appellees, who
appeared therein. It is noteworthy that Republic Act 2605 authorizes removal of the unauthorized
dikes either as "public nuisances or as prohibited constructions" on public navigable streams, and
those of appellees clearly are in the latter class.

It may not be amiss to state that the power of the Secretary of Public Works to investigate and
clear public streams free from unauthorized encroachments and obstructions was granted as far
back as Act 3208 of the old Philippine Legislature, and has been upheld by this Court (Palanca
vs. Commonwealth, supra; Meneses vs. Commonwealth, 69 Phil. 647). We do not believe that
the absence of an express appeal to the courts under the present Republic Act 2056 is a
substantial difference, so far as the Constitution is concerned, for it is a well-known rule that due
process does not have to be judicial process; and moreover, the judicial review of the Secretary's
decision would always remain, even if not expressly granted, whenever his act violates the law
or the Constitution, or imports abuse of discretion amounting to excess of jurisdiction.

The argument that the action of the Secretary amounts to a confiscation of private property leads
us directly to the issue of fact whether a navigable portion of the Bulati creek had once traversed
the registered lot of the appellees Lovina and connected with Manampil creek that borders said
lot on the northwest before it was closed by Jose de Leon, Lovina's predecessor. The Secretary of
Public Works has found from the evidence before him that, originally, the sapang (creek) Bulati
flowed across the property in question, and connected the Nasi river with sapang Manampil; that
in 1926 or thereabouts, the Bulati creek was 2 meters deep at high tide and 1/2 meter deep at low
tide, and the people used it as fishing grounds and as a communication way, navigating along its
length in bancas; that former registered owner, Jose de Jesus, closed about meters of the course
of the sapang Bulati that lay within the lot in question by constructing dams or dikes at both
sides and converting the lot into a fishpond.

The appellees, on the other hand, rely on the 1916 registration plan of the property (Exh. C),
showing it to be merely bounded by the Bulati creek on the southeast, as well as on the testimony
introduced at the hearing of prohibition case (over the objection of the Government counsel) that
the Bulati creek did not enter the property.

The Court of First Instance found that "according to the location plan, Exhibit "C", the "Bulati
creek, on which dikes and dams in question were constructed was a mere estero and could not be
considered a navigable stream then." It is not explained how such fact could appear solely from
the plan Exhibit "C" (no other proof being referred to), unless indeed the court below so
concluded from the fact that in said plan the Bulati creek does not appear to run within the
registered lot. The conclusion of lower court is not supported by its premises, because by law,
the issuance of a Torrens title does not confer title navigable streams (which are fluvial
highways) within registered property, nor is it conclusive on their non-existence, unless the
boundaries of such streams had been expressly delimited in the registration plan (Act 496, sec.
39 cf. Palanca vs. Commonwealth, 69 Phil. 449; Meneses Commonwealth, 69 Phil. 647), so that
delimitation of their course may be made even after the decree of registration has become final.
In the present case, in truth the very plan of the appellees, Exhibit "C", shows parallel reentrant
lines, around its point 65 and between points 44 and that indicate the existence of a stream
connecting the sapang Bulati on the southeast and the sapang Manampil on the northwest, and
which the surveyor apparently failed delimit for some undisclosed reason. That the stream was
the prolongation of the sapang Bulati, that formerly flow across the registered lot, is also shown
by the fact that appellees' plan Exhibit "C", the westward continuation the Bulati creek (west of
point 65), which bounds the registered lot, is labelled "Etero Mabao". The plan thus corroborates
the previously summarized testimony laid before investigator Yonzon and relied upon by the
Secretary in his administrative decision. Even more, appellees' own caretaker, Yambao, showed
investigator Yonzon the old course of the Bulati within the fishpond itself; and this evidence is,
likewise, confirmed by the cross-section profile of the ground near the dams in question (See
plan Annex "AA" of Yonzon's Report), where the old channel of the creek is clearly discernible.
To be sure, appellees contend that they were not shown this plan; but in their evidence before the
court of first instance, they never attempted, or offered, to prove that said plan is incorrect.

That the creek was navigable in fact before it was closed was also testified to by the government
witnesses, whose version is corroborated as we have seen.

Considering the well-established rule that findings of fact in executive decisions in matters
within their jurisdiction are entitled to respect from the courts in the absence of fraud, collusion,
or grave abuse of discretion (Com. of Customs vs. Valencia, 54 O.G. 3505), none of which has
been shown to exist in this case, we agree with appellant that the court below erred in rejecting
the findings of fact of the Secretary of Public Works.

The findings of the Secretary can not be enervated by new evidence not laid down before him,
for that would be tantamount to holding a new investigation, and to substitute for the discretion
and judgment of the Secretary the discretion and judgment of the court, to whom the statute had
entrusted the case. It is immaterial that the present action should be one for prohibition or
injunction and not one for certiorari, in either event the case must be resolved upon the evidence
submitted to the Secretary, since a judicial review of executive decisions does not import a trial
de novo, but only an ascertainment of whether the executive findings are not in violation of the
constitution or of the laws, and are free from fraud or imposition, and whether they find
reasonable support in the evidence.1 Here, the proof preponderates in favor of the Secretary's
decision.

Nevertheless, we, agree with appellees that they can not be charged with failure to exhaust
administrative remedies, for the Secretary's decision is that of the President, in the absence of
disapproval (Villena vs. Secretary of the interior, 67 Phil. 451).

Finally, there being a possibility that when they purchased the property in question the appellees
Lovina were not informed of the illegal closure of the Bulati creek, their action, if any, against
their vendor, should be, and is hereby, reserved.

In resume, we rule:

(1) That Republic Act No. 2056 does not constitute an unlawful delegation of judicial power to
the Secretary of Public Works;

(2) That absence of any mention of a navigable stream within a property covered by Torrens title
does not confer title to it nor preclude a subsequent investigation and determination of its
existence;

(3) That the findings of fact of the Secretary of Public Works under Republic Act No. 2056
should be respected in the absence of illegality, error of law, fraud, or imposition, so long as the
said, findings are supported by substantial evidence submitted to him.

(4) That ownership of a navigable stream or of its bed is not acquirable by prescription.

WHEREFORE, the decision appealed from is reversed, and the writs of injunction issued therein
are annulled and set aside. Costs against appellees Lovina.

Bengzon, C.J., Padilla, Bautista Angelo, Barrera, Paredes, Regala and Makalintal, JJ., concur.
Dizon, J., took no part.

Today is Friday, December 01, 2017

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 124360 November 5, 1997

FRANCISCO S. TATAD, petitioner,

vs.

THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE DEPARTMENT OF
FINANCE, respondents.

G.R. No. 127867 November 5, 1997

EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA, WIGBERTO TANADA, FLAG HUMAN RIGHTS
FOUNDATION, INC., FREEDOM FROM DEBT COALITION (FDC), SANLAKAS, petitioners,

vs.

HON. RUBEN TORRES in his capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his
capacity as the Secretary of Energy, CALTEX Philippines, Inc., PETRON Corporation and PILIPINAS SHELL
Corporation, respondents.

PUNO, J.:

The petitions at bar challenge the constitutionality of Republic Act No. 8180 entitled "An Act
Deregulating the Downstream Oil Industry and For Other Purposes".1 R.A. No. 8180 ends twenty six (26)
years of government regulation of the downstream oil industry. Few cases carry a surpassing
importance on the life of every Filipino as these petitions for the upswing and downswing of our
economy materially depend on the oscillation of oil.
First, the facts without the fat. Prior to 1971, there was no government agency regulating the oil
industry other than those dealing with ordinary commodities. Oil companies were free to enter and exit
the market without any government interference. There were four (4) refining companies (Shell, Caltex,
Bataan Refining Company and Filoil Refining) and six (6) petroleum marketing companies (Esso, Filoil,
Caltex, Getty, Mobil and Shell), then operating in the country.2

In 1971, the country was driven to its knees by a crippling oil crisis. The government, realizing that
petroleum and its products are vital to national security and that their continued supply at reasonable
prices is essential to the general welfare, enacted the Oil Industry Commission Act.3 It created the Oil
Industry Commission (OIC) to regulate the business of importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing and selling crude oil, gasoline,
kerosene, gas and other refined petroleum products. The OIC was vested with the power to fix the
market prices of petroleum products, to regulate the capacities of refineries, to license new refineries
and to regulate the operations and trade practices of the industry.4

In addition to the creation of the OIC, the government saw the imperious need for a more active role
of Filipinos in the oil industry. Until the early seventies, the downstream oil industry was controlled by
multinational companies. All the oil refineries and marketing companies were owned by foreigners
whose economic interests did not always coincide with the interest of the Filipino. Crude oil was
transported to the country by foreign-controlled tankers. Crude processing was done locally by foreign-
owned refineries and petroleum products were marketed through foreign-owned retail outlets. On
November 9, 1973, President Ferdinand E. Marcos boldly created the Philippine National Oil Corporation
(PNOC) to break the control by foreigners of our oil industry.5 PNOC engaged in the business of refining,
marketing, shipping, transporting, and storing petroleum. It acquired ownership of ESSO Philippines and
Filoil to serve as its marketing arm. It bought the controlling shares of Bataan Refining Corporation, the
largest refinery in the country.6 PNOC later put up its own marketing subsidiary Petrophil. PNOC
operated under the business name PETRON Corporation. For the first time, there was a Filipino presence
in the Philippine oil market.

In 1984, President Marcos through Section 8 of Presidential Decree No. 1956, created the Oil Price
Stabilization Fund (OPSF) to cushion the effects of frequent changes in the price of oil caused by
exchange rate adjustments or increase in the world market prices of crude oil and imported petroleum
products. The fund is used (1) to reimburse the oil companies for cost increases in crude oil and
imported petroleum products resulting from exchange rate adjustment and/or increase in world market
prices of crude oil, and (2) to reimburse oil companies for cost underrecovery incurred as a result of the
reduction of domestic prices of petroleum products. Under the law, the OPSF may be sourced from:
1. any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum
products subject to tax under P.D. No. 1956 arising from exchange rate adjustment,

2. any increase in the tax collection as a result of the lifting of tax exemptions of government
corporations, as may be determined by the Minister of Finance in consultation with the Board of Energy,

3. any additional amount to be imposed on petroleum products to augment the resources of the fund
through an appropriate order that may be issued by the Board of Energy requiring payment of persons
or companies engaged in the business of importing, manufacturing and/or marketing petroleum
products, or

4. any resulting peso costs differentials in case the actual peso costs paid by oil companies in the
importation of crude oil and petroleum products is less than the peso costs computed using the
reference foreign exchange rate as fixed by the Board of Energy.7

By 1985, only three (3) oil companies were operating in the country Caltex, Shell and the
government-owned PNOC.

In May, 1987, President Corazon C. Aquino signed Executive Order No. 172 creating the Energy
Regulatory Board to regulate the business of importing, exporting, re-exporting, shipping, transporting,
processing, refining, marketing and distributing energy resources "when warranted and only when
public necessity requires." The Board had the following powers and functions:

1. Fix and regulate the prices of petroleum products;

2. Fix and regulate the rate schedule or prices of piped gas to be charged by duly franchised gas
companies which distribute gas by means of underground pipe system;

3. Fix and regulate the rates of pipeline concessionaries under the provisions of R.A. No. 387, as
amended . . . ;
4. Regulate the capacities of new refineries or additional capacities of existing refineries and license
refineries that may be organized after the issuance of (E.O. No. 172) under such terms and conditions as
are consistent with the national interest; and

5. Whenever the Board has determined that there is a shortage of any petroleum product, or when
public interest so requires, it may take such steps as it may consider necessary, including the temporary
adjustment of the levels of prices of petroleum products and the payment to the Oil Price Stabilization
Fund . . . by persons or entities engaged in the petroleum industry of such amounts as may be
determined by the Board, which may enable the importer to recover its cost of importation.8

On December 9, 1992, Congress enacted R.A. No. 7638 which created the Department of Energy to
prepare, integrate, coordinate, supervise and control all plans, programs, projects, and activities of the
government in relation to energy exploration, development, utilization, distribution and conservation.9
The thrust of the Philippine energy program under the law was toward privatization of government
agencies related to energy, deregulation of the power and energy industry and reduction of dependency
on oil-fired plants.10 The law also aimed to encourage free and active participation and investment by
the private sector in all energy activities. Section 5(e) of the law states that "at the end of four (4) years
from the effectivity of this Act, the Department shall, upon approval of the President, institute the
programs and timetable of deregulation of appropriate energy projects and activities of the energy
industry."

Pursuant to the policies enunciated in R.A. No. 7638, the government approved the privatization of
Petron Corporation in 1993. On December 16, 1993, PNOC sold 40% of its equity in Petron Corporation
to the Aramco Overseas Company.

In March 1996, Congress took the audacious step of deregulating the downstream oil industry. It
enacted R.A. No. 8180, entitled the "Downstream Oil Industry Deregulation Act of 1996." Under the
deregulated environment, "any person or entity may import or purchase any quantity of crude oil and
petroleum products from a foreign or domestic source, lease or own and operate refineries and other
downstream oil facilities and market such crude oil or use the same for his own requirement," subject
only to monitoring by the Department of

Energy.11
The deregulation process has two phases: the transition phase and the full deregulation phase. During
the transition phase, controls of the non-pricing aspects of the oil industry were to be lifted. The
following were to be accomplished: (1) liberalization of oil importation, exportation, manufacturing,
marketing and distribution, (2) implementation of an automatic pricing mechanism, (3) implementation
of an automatic formula to set margins of dealers and rates of haulers, water transport operators and
pipeline concessionaires, and (4) restructuring of oil taxes. Upon full deregulation, controls on the price
of oil and the foreign exchange cover were to be lifted and the OPSF was to be abolished.

The first phase of deregulation commenced on August 12, 1996.

On February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry
through E.O. No. 372.

The petitions at bar assail the constitutionality of various provisions of R.A No. 8180 and E.O. No. 372.

In G.R. No. 124360, petitioner Francisco S. Tatad seeks the annulment of section 5(b) of R.A. No. 8180.
Section 5(b) provides:

b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall
be imposed and collected on imported crude oil at the rate of three percent (3%) and imported refined
petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be
the same as that for imported crude oil: Provided, That beginning on January 1, 2004 the tariff rate on
imported crude oil and refined petroleum products shall be the same: Provided, further, That this
provision may be amended only by an Act of Congress.

The petition is anchored on three arguments:

First, that the imposition of different tariff rates on imported crude oil and imported refined
petroleum products violates the equal protection clause. Petitioner contends that the 3%-7% tariff
differential unduly favors the three existing oil refineries and discriminates against prospective investors
in the downstream oil industry who do not have their own refineries and will have to source refined
petroleum products from abroad.
Second, that the imposition of different tariff rates does not deregulate the downstream oil industry
but instead controls the oil industry, contrary to the avowed policy of the law. Petitioner avers that the
tariff differential between imported crude oil and imported refined petroleum products bars the entry
of other players in the oil industry because it effectively protects the interest of oil companies with
existing refineries. Thus, it runs counter to the objective of the law "to foster a truly competitive
market."

Third, that the inclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section 26(1)
Article VI of the Constitution requiring every law to have only one subject which shall be expressed in its
title. Petitioner contends that the imposition of tariff rates in section 5(b) of R.A. No. 8180 is foreign to
the subject of the law which is the deregulation of the downstream oil industry.

In G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada,
Flag Human Rights Foundation, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contest the
constitutionality of section 15 of R.A. No. 8180 and E.O. No. 392. Section 15 provides:

Sec. 15. Implementation of Full Deregulation. Pursuant to Section 5(e) of Republic Act No. 7638, the
DOE shall, upon approval of the President, implement the full deregulation of the downstream oil
industry not later than March 1997. As far as practicable, the DOE shall time the full deregulation when
the prices of crude oil and petroleum products in the world market are declining and when the exchange
rate of the peso in relation to the US dollar is stable. Upon the implementation of the full deregulation
as provided herein, the transition phase is deemed terminated and the following laws are deemed
repealed:

xxx xxx xxx

E.O. No. 372 states in full, viz.:

WHEREAS, Republic Act No. 7638, otherwise known as the "Department of Energy Act of 1992,"
provides that, at the end of four years from its effectivity last December 1992, "the Department (of
Energy) shall, upon approval of the President, institute the programs and time table of deregulation of
appropriate energy projects and activities of the energy sector;"
WHEREAS, Section 15 of Republic Act No. 8180, otherwise known as the "Downstream Oil Industry
Deregulation Act of 1996," provides that "the DOE shall, upon approval of the President, implement full
deregulation of the downstream oil industry not later than March, 1997. As far as practicable, the DOE
shall time the full deregulation when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable;"

WHEREAS, pursuant to the recommendation of the Department of Energy, there is an imperative


need to implement the full deregulation of the downstream oil industry because of the following recent
developments: (i) depletion of the buffer fund on or about 7 February 1997 pursuant to the Energy
Regulatory Board's Order dated 16 January 1997; (ii) the prices of crude oil had been stable at $21-$23
per barrel since October 1996 while prices of petroleum products in the world market had been stable
since mid-December of last year. Moreover, crude oil prices are beginning to soften for the last few days
while prices of some petroleum products had already declined; and (iii) the exchange rate of the peso in
relation to the US dollar has been stable for the past twelve (12) months, averaging at around P26.20 to
one US dollar;

WHEREAS, Executive Order No. 377 dated 31 October 1996 provides for an institutional framework
for the administration of the deregulated industry by defining the functions and responsibilities of
various government agencies;

WHEREAS, pursuant to Republic Act No. 8180, the deregulation of the industry will foster a truly
competitive market which can better achieve the social policy objectives of fair prices and adequate,
continuous supply of environmentally-clean and high quality petroleum products;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by the powers
vested in me by law, do hereby declare the full deregulation of the downstream oil industry.

In assailing section 15 of R.A. No. 8180 and E.O. No. 392, petitioners offer the following submissions:

First, section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the President
and the Secretary of Energy because it does not provide a determinate or determinable standard to
guide the Executive Branch in determining when to implement the full deregulation of the downstream
oil industry. Petitioners contend that the law does not define when it is practicable for the Secretary of
Energy to recommend to the President the full deregulation of the downstream oil industry or when the
President may consider it practicable to declare full deregulation. Also, the law does not provide any
specific standard to determine when the prices of crude oil in the world market are considered to be
declining nor when the exchange rate of the peso to the US dollar is considered stable.

Second, petitioners aver that E.O. No. 392 implementing the full deregulation of the downstream oil
industry is arbitrary and unreasonable because it was enacted due to the alleged depletion of the OPSF
fund a condition not found in R.A. No. 8180.

Third, section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de facto cartel among the
three existing oil companies Petron, Caltex and Shell in violation of the constitutional prohibition
against monopolies, combinations in restraint of trade and unfair competition.

Respondents, on the other hand, fervently defend the constitutionality of R.A. No. 8180 and E.O. No.
392. In addition, respondents contend that the issues raised by the petitions are not justiciable as they
pertain to the wisdom of the law. Respondents further aver that petitioners have no locus standi as they
did not sustain nor will they sustain direct injury as a result of the implementation of R.A. No. 8180.

The petitions were heard by the Court on September 30, 1997. On October 7, 1997, the Court ordered
the private respondents oil companies "to maintain the status quo and to cease and desist from
increasing the prices of gasoline and other petroleum fuel products for a period of thirty (30) days . . .
subject to further orders as conditions may warrant."

We shall now resolve the petitions on the merit. The petitions raise procedural and substantive issues
bearing on the constitutionality of R.A. No. 8180 and E.O. No. 392. The procedural issues are: (1)
whether or not the petitions raise a justiciable controversy, and (2) whether or not the petitioners have
the standing to assail the validity of the subject law and executive order. The substantive issues are: (1)
whether or not section 5 (b) violates the one title one subject requirement of the Constitution; (2)
whether or not the same section violates the equal protection clause of the Constitution; (3) whether or
not section 15 violates the constitutional prohibition on undue delegation of power; (4) whether or not
E.O. No. 392 is arbitrary and unreasonable; and (5) whether or not R.A. No. 8180 violates the
constitutional prohibition against monopolies, combinations in restraint of trade and unfair competition.
We shall first tackle the procedural issues. Respondents claim that the avalanche of arguments of the
petitioners assail the wisdom of R.A. No. 8180. They aver that deregulation of the downstream oil
industry is a policy decision made by Congress and it cannot be reviewed, much less be reversed by this
Court. In constitutional parlance, respondents contend that the petitions failed to raise a justiciable
controversy.

Respondents' joint stance is unnoteworthy. Judicial power includes not only the duty of the courts to
settle actual controversies involving rights which are legally demandable and enforceable, but also the
duty to determine whether or not there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the government.12 The courts, as
guardians of the Constitution, have the inherent authority to determine whether a statute enacted by
the legislature transcends the limit imposed by the fundamental law. Where a statute violates the
Constitution, it is not only the right but the duty of the judiciary to declare such act as unconstitutional
and void.13 We held in the recent case of Tanada v. Angara:14

xxx xxx xxx

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution,
the petition no doubt raises a justiciable controversy. Where an action of the legislative branch is
seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of
the judiciary to settle the dispute. The question thus posed is judicial rather than political. The duty to
adjudicate remains to assure that the supremacy of the Constitution is upheld. Once a controversy as to
the application or interpretation of a constitutional provision is raised before this Court, it becomes a
legal issue which the Court is bound by constitutional mandate to decide.

Even a sideglance at the petitions will reveal that petitioners have raised constitutional issues which
deserve the resolution of this Court in view of their seriousness and their value as precedents. Our
statement of facts and definition of issues clearly show that petitioners are assailing R.A. No. 8180
because its provisions infringe the Constitution and not because the law lacks wisdom. The principle of
separation of power mandates that challenges on the constitutionality of a law should be resolved in our
courts of justice while doubts on the wisdom of a law should be debated in the halls of Congress. Every
now and then, a law may be denounced in court both as bereft of wisdom and constitutionally infirmed.
Such denunciation will not deny this Court of its jurisdiction to resolve the constitutionality of the said
law while prudentially refusing to pass on its wisdom.
The effort of respondents to question the locus standi of petitioners must also fall on barren ground.
In language too lucid to be misunderstood, this Court has brightlined its liberal stance on a petitioner's
locus standi where the petitioner is able to craft an issue of transcendental significance to the people.15
In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,16 we stressed:

xxx xxx xxx

Objections to taxpayers' suit for lack of sufficient personality, standing or interest are, however, in the
main procedural matters. Considering the importance to the public of the cases at bar, and in keeping
with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of
government have kept themselves within the limits of the Constitution and the laws and that they have
not abused the discretion given to them, the Court has brushed aside technicalities of procedure and
has taken cognizance of these petitions.

There is not a dot of disagreement between the petitioners and the respondents on the far reaching
importance of the validity of RA No. 8180 deregulating our downstream oil industry. Thus, there is no
good sense in being hypertechnical on the standing of petitioners for they pose issues which are
significant to our people and which deserve our forthright resolution.

We shall now track down the substantive issues. In G.R. No. 124360 where petitioner is Senator Tatad,
it is contended that section 5(b) of R.A. No. 8180 on tariff differential violates the provision17 of the
Constitution requiring every law to have only one subject which should be expressed in its title. We do
not concur with this contention. As a policy, this Court has adopted a liberal construction of the one title
one subject rule. We have consistently ruled18 that the title need not mirror, fully index or catalogue
all contents and minute details of a law. A law having a single general subject indicated in the title may
contain any number of provisions, no matter how diverse they may be, so long as they are not
inconsistent with or foreign to the general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the general subject.19 We hold that
section 5(b) providing for tariff differential is germane to the subject of R.A. No. 8180 which is the
deregulation of the downstream oil industry. The section is supposed to sway prospective investors to
put up refineries in our country and make them rely less on imported petroleum.20 We shall, however,
return to the validity of this provision when we examine its blocking effect on new entrants to the oil
market.
We shall now slide to the substantive issues in G.R. No. 127867. Petitioners assail section 15 of R.A.
No. 8180 which fixes the time frame for the full deregulation of the downstream oil industry. We restate
its pertinent portion for emphasis, viz.:

Sec. 15. Implementation of Full Deregulation Pursuant to section 5(e) of Republic Act No. 7638, the
DOE shall, upon approval of the President, implement the full deregulation of the downstream oil
industry not later than March 1997. As far as practicable, the DOE shall time the full deregulation when
the prices of crude oil and petroleum products in the world market are declining and when the exchange
rate of the peso in relation to the US dollar is stable . . .

Petitioners urge that the phrases "as far as practicable," "decline of crude oil prices in the world
market" and "stability of the peso exchange rate to the US dollar" are ambivalent, unclear and
inconcrete in meaning. They submit that they do not provide the "determinate or determinable
standards" which can guide the President in his decision to fully deregulate the downstream oil industry.
In addition, they contend that E.O. No. 392 which advanced the date of full deregulation is void for it
illegally considered the depletion of the OPSF fund as a factor.

The power of Congress to delegate the execution of laws has long been settled by this Court. As early
as 1916 in Compania General de Tabacos de Filipinas vs. The Board of Public Utility Commissioners,21
this Court thru, Mr. Justice Moreland, held that "the true distinction is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority
or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be
done; to the latter no valid objection can be made." Over the years, as the legal engineering of men's
relationship became more difficult, Congress has to rely more on the practice of delegating the
execution of laws to the executive and other administrative agencies. Two tests have been developed to
determine whether the delegation of the power to execute laws does not involve the abdication of the
power to make law itself. We delineated the metes and bounds of these tests in Eastern Shipping Lines,
Inc. VS. POEA,22 thus:

There are two accepted tests to determine whether or not there is a valid delegation of legislative
power, viz: the completeness test and the sufficient standard test. Under the first test, the law must be
complete in all its terms and conditions when it leaves the legislative such that when it reaches the
delegate the only thing he will have to do is to enforce it. Under the sufficient standard test, there must
be adequate guidelines or limitations in the law to map out the boundaries of the delegate's authority
and prevent the delegation from running riot. Both tests are intended to prevent a total transference of
legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and
exercise a power essentially legislative.

The validity of delegating legislative power is now a quiet area in our constitutional landscape. As
sagely observed, delegation of legislative power has become an inevitability in light of the increasing
complexity of the task of government. Thus, courts bend as far back as possible to sustain the
constitutionality of laws which are assailed as unduly delegating legislative powers. Citing Hirabayashi v.
United States23 as authority, Mr. Justice Isagani A. Cruz states "that even if the law does not expressly
pinpoint the standard, the courts will bend over backward to locate the same elsewhere in order to
spare the statute, if it can, from constitutional infirmity."24

Given the groove of the Court's rulings, the attempt of petitioners to strike down section 15 on the
ground of undue delegation of legislative power cannot prosper. Section 15 can hurdle both the
completeness test and the sufficient standard test. It will be noted that Congress expressly provided in
R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of
any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion
to postpone it for any purported reason. Thus, the law is complete on the question of the final date of
full deregulation. The discretion given to the President is to advance the date of full deregulation before
the end of March 1997. Section 15 lays down the standard to guide the judgment of the President he
is to time it as far as practicable when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the US dollar is stable.

Petitioners contend that the words "as far as practicable," "declining" and "stable" should have been
defined in R.A. No. 8180 as they do not set determinate or determinable standards. The stubborn
submission deserves scant consideration. The dictionary meanings of these words are well settled and
cannot confuse men of reasonable intelligence. Webster defines "practicable" as meaning possible to
practice or perform, "decline" as meaning to take a downward direction, and "stable" as meaning firmly
established.25 The fear of petitioners that these words will result in the exercise of executive discretion
that will run riot is thus groundless. To be sure, the Court has sustained the validity of similar, if not
more general standards in other cases.26

It ought to follow that the argument that E.O. No. 392 is null and void as it was based on
indeterminate standards set by R.A. 8180 must likewise fail. If that were all to the attack against the
validity of E.O. No. 392, the issue need not further detain our discourse. But petitioners further posit the
thesis that the Executive misapplied R.A. No. 8180 when it considered the depletion of the OPSF fund as
a factor in fully deregulating the downstream oil industry in February 1997. A perusal of section 15 of
R.A. No. 8180 will readily reveal that it only enumerated two factors to be considered by the
Department of Energy and the Office of the President, viz.: (1) the time when the prices of crude oil and
petroleum products in the world market are declining, and (2) the time when the exchange rate of the
peso in relation to the US dollar is stable. Section 15 did not mention the depletion of the OPSF fund as a
factor to be given weight by the Executive before ordering full deregulation. On the contrary, the
debates in Congress will show that some of our legislators wanted to impose as a pre-condition to
deregulation a showing that the OPSF fund must not be in deficit.27 We therefore hold that the
Executive department failed to follow faithfully the standards set by R.A. No. 8180 when it considered
the extraneous factor of depletion of the OPSF fund. The misappreciation of this extra factor cannot be
justified on the ground that the Executive department considered anyway the stability of the prices of
crude oil in the world market and the stability of the exchange rate of the peso to the dollar. By
considering another factor to hasten full deregulation, the Executive department rewrote the standards
set forth in R.A. 8180. The Executive is bereft of any right to alter either by subtraction or addition the
standards set in R.A. No. 8180 for it has no power to make laws. To cede to the Executive the power to
make law is to invite tyranny, indeed, to transgress the principle of separation of powers. The exercise of
delegated power is given a strict scrutiny by courts for the delegate is a mere agent whose action cannot
infringe the terms of agency. In the cases at bar, the Executive co-mingled the factor of depletion of the
OPSF fund with the factors of decline of the price of crude oil in the world market and the stability of the
peso to the US dollar. On the basis of the text of E.O. No. 392, it is impossible to determine the weight
given by the Executive department to the depletion of the OPSF fund. It could well be the principal
consideration for the early deregulation. It could have been accorded an equal significance. Or its
importance could be nil. In light of this uncertainty, we rule that the early deregulation under E.O. No.
392 constitutes a misapplication of R.A. No. 8180.

We now come to grips with the contention that some provisions of R.A. No. 8180 violate section 19 of
Article XII of the 1987 Constitution. These provisions are:

(1) Section 5 (b) which states "Any law to the contrary notwithstanding and starting with the
effectivity of this Act, tariff duty shall be imposed and collected on imported crude oil at the rate of
three percent (3%) and imported refined petroleum products at the rate of seven percent (7%) except
fuel oil and LPG, the rate for which shall be the same as that for imported crude oil. Provided, that
beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall
be the same. Provided, further, that this provision may be amended only by an Act of Congress."

(2) Section 6 which states "To ensure the security and continuity of petroleum crude and products
supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is
lower," and
(3) Section 9 (b) which states "To ensure fair competition and prevent cartels and monopolies in
the downstream oil industry, the following acts shall be prohibited:

xxx xxx xxx

(b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below
the industry average cost so as to attract customers to the detriment of competitors.

On the other hand, section 19 of Article XII of the Constitution allegedly violated by the aforestated
provisions of R.A. No. 8180 mandates: "The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition shall be allowed."

A monopoly is a privilege or peculiar advantage vested in one or more persons or companies,


consisting in the exclusive right or power to carry on a particular business or trade, manufacture a
particular article, or control the sale or the whole supply of a particular commodity. It is a form of
market structure in which one or only a few firms dominate the total sales of a product or service.28 On
the other hand, a combination in restraint of trade is an agreement or understanding between two or
more persons, in the form of a contract, trust, pool, holding company, or other form of association, for
the purpose of unduly restricting competition, monopolizing trade and commerce in a certain
commodity, controlling its, production, distribution and price, or otherwise interfering with freedom of
trade without statutory authority.29 Combination in restraint of trade refers to the means while
monopoly refers to the end.30

Article 186 of the Revised Penal Code and Article 28 of the New Civil Code breathe life to this
constitutional policy. Article 186 of the Revised Penal Code penalizes monopolization and creation of
combinations in restraint of

trade, 31 while Article 28 of the New Civil Code makes any person who shall engage in unfair
competition liable for damages.32

Respondents aver that sections 5(b), 6 and 9(b) implement the policies and objectives of R.A. No.
8180. They explain that the 4% tariff differential is designed to encourage new entrants to invest in
refineries. They stress that the inventory requirement is meant to guaranty continuous domestic supply
of petroleum and to discourage fly-by-night operators. They also submit that the prohibition against
predatory pricing is intended to protect prospective entrants. Respondents manifested to the Court that
new players have entered the Philippines after deregulation and have now captured 3% 5% of the oil
market.

The validity of the assailed provisions of R.A. No. 8180 has to be decided in light of the letter and spirit
of our Constitution, especially section 19, Article XII. Beyond doubt, the Constitution committed us to
the free enterprise system but it is a system impressed with its own distinctness. Thus, while the
Constitution embraced free enterprise as an economic creed, it did not prohibit per se the operation of
monopolies which can, however, be regulated in the public interest.33 Thus too, our free enterprise
system is not based on a market of pure and unadulterated competition where the State pursues a strict
hands-off policy and follows the let-the-devil devour the hindmost rule. Combinations in restraint of
trade and unfair competitions are absolutely proscribed and the proscription is directed both against the
State as well as the private sector.34 This distinct free enterprise system is dictated by the need to
achieve the goals of our national economy as defined by section 1, Article XII of the Constitution which
are: more equitable distribution of opportunities, income and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the underprivileged. It also calls for
the State to protect Filipino enterprises against unfair competition and trade practices.

Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition.
The desirability of competition is the reason for the prohibition against restraint of trade, the reason for
the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies.
Competition is thus the underlying principle of section 19, Article XII of our Constitution which cannot be
violated by R.A. No. 8180. We subscribe to the observation of Prof. Gellhorn that the objective of anti-
trust law is "to assure a competitive economy, based upon the belief that through competition
producers will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest
resources. Competition among producers allows consumers to bid for goods and services, and thus
matches their desires with society's opportunity costs."35 He adds with appropriateness that there is a
reliance upon "the operation of the 'market' system (free enterprise) to decide what shall be produced,
how resources shall be allocated in the production process, and to whom the various products will be
distributed. The market system relies on the consumer to decide what and how much shall be produced,
and on competition, among producers to determine who will manufacture it."

Again, we underline in scarlet that the fundamental principle espoused by section 19, Article XII of the
Constitution is competition for it alone can release the creative forces of the market. But the
competition that can unleash these creative forces is competition that is fighting yet is fair. Ideally, this
kind of competition requires the presence of not one, not just a few but several players. A market
controlled by one player (monopoly) or dominated by a handful of players (oligopoly) is hardly the
market where honest-to-goodness competition will prevail. Monopolistic or oligopolistic markets
deserve our careful scrutiny and laws which barricade the entry points of new players in the market
should be viewed with suspicion.

Prescinding from these baseline propositions, we shall proceed to examine whether the provisions of
R.A. No. 8180 on tariff differential, inventory reserves, and predatory prices imposed substantial barriers
to the entry and exit of new players in our downstream oil industry. If they do, they have to be struck
down for they will necessarily inhibit the formation of a truly competitive market. Contrariwise, if they
are insignificant impediments, they need not be stricken down.

In the cases at bar, it cannot be denied that our downstream oil industry is operated and controlled by
an oligopoly, a foreign oligopoly at that. Petron, Shell and Caltex stand as the only major league players
in the oil market. All other players belong to the lilliputian league. As the dominant players, Petron, Shell
and Caltex boast of existing refineries of various capacities. The tariff differential of 4% therefore works
to their immense benefit. Yet, this is only one edge of the tariff differential. The other edge cuts and cuts
deep in the heart of their competitors. It erects a high barrier to the entry of new players. New players
that intend to equalize the market power of Petron, Shell and Caltex by building refineries of their own
will have to spend billions of pesos. Those who will not build refineries but compete with them will
suffer the huge disadvantage of increasing their product cost by 4%. They will be competing on an
uneven field. The argument that the 4% tariff differential is desirable because it will induce prospective
players to invest in refineries puts the cart before the horse. The first need is to attract new players and
they cannot be attracted by burdening them with heavy disincentives. Without new players belonging to
the league of Petron, Shell and Caltex, competition in our downstream oil industry is an idle dream.

The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against
prospective new players. Petron, Shell and Caltex can easily comply with the inventory requirement of
R.A. No. 8180 in view of their existing storage facilities. Prospective competitors again will find
compliance with this requirement difficult as it will entail a prohibitive cost. The construction cost of
storage facilities and the cost of inventory can thus scare prospective players. Their net effect is to
further occlude the entry points of new players, dampen competition and enhance the control of the
market by the three (3) existing oil companies.

Finally, we come to the provision on predatory pricing which is defined as ". . . selling or offering to
sell any product at a price unreasonably below the industry average cost so as to attract customers to
the detriment of competitors." Respondents contend that this provision works against Petron, Shell and
Caltex and protects new entrants. The ban on predatory pricing cannot be analyzed in isolation. Its
validity is interlocked with the barriers imposed by R.A. No. 8180 on the entry of new players. The
inquiry should be to determine whether predatory pricing on the part of the dominant oil companies is
encouraged by the provisions in the law blocking the entry of new players. Text-writer

Hovenkamp,36 gives the authoritative answer and we quote:

xxx xxx xxx

The rationale for predatory pricing is the sustaining of losses today that will give a firm monopoly
profits in the future. The monopoly profits will never materialize, however, if the market is flooded with
new entrants as soon as the successful predator attempts to raise its price. Predatory pricing will be
profitable only if the market contains significant barriers to new entry.

As aforediscsussed, the 4% tariff differential and the inventory requirement are significant barriers
which discourage new players to enter the market. Considering these significant barriers established by
R.A. No. 8180 and the lack of players with the comparable clout of PETRON, SHELL and CALTEX, the
temptation for a dominant player to engage in predatory pricing and succeed is a chilling reality.
Petitioners' charge that this provision on predatory pricing is anti-competitive is not without reason.

Respondents belittle these barriers with the allegation that new players have entered the market
since deregulation. A scrutiny of the list of the alleged new players will, however, reveal that not one
belongs to the class and category of PETRON, SHELL and CALTEX. Indeed, there is no showing that any of
these new players intends to install any refinery and effectively compete with these dominant oil
companies. In any event, it cannot be gainsaid that the new players could have been more in number
and more impressive in might if the illegal entry barriers in R.A. No. 8180 were not erected.

We come to the final point. We now resolve the total effect of the untimely deregulation, the
imposition of 4% tariff differential on imported crude oil and refined petroleum products, the
requirement of inventory and the prohibition on predatory pricing on the constitutionality of R.A. No.
8180. The question is whether these offending provisions can be individually struck down without
invalidating the entire R.A. No. 8180. The ruling case law is well stated by author Agpalo,37 viz.:

xxx xxx xxx


The general rule is that where part of a statute is void as repugnant to the Constitution, while another
part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The presence of
a separability clause in a statute creates the presumption that the legislature intended separability,
rather than complete nullity of the statute. To justify this result, the valid portion must be so far
independent of the invalid portion that it is fair to presume that the legislature would have enacted it by
itself if it had supposed that it could not constitutionally enact the other. Enough must remain to make a
complete, intelligible and valid statute, which carries out the legislative intent. . . .

The exception to the general rule is that when the parts of a statute are so mutually dependent and
connected, as conditions, considerations, inducements, or compensations for each other, as to warrant
a belief that the legislature intended them as a whole, the nullity of one part will vitiate the rest. In
making the parts of the statute dependent, conditional, or connected with one another, the legislature
intended the statute to be carried out as a whole and would not have enacted it if one part is void, in
which case if some parts are unconstitutional, all the other provisions thus dependent, conditional, or
connected must fall with them.

R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any reason, any section or
provision of this Act is declared unconstitutional or invalid, such parts not affected thereby shall remain
in full force and effect." This separability clause notwithstanding, we hold that the offending provisions
of R.A. No. 8180 so permeate its essence that the entire law has to be struck down. The provisions on
tariff differential, inventory and predatory pricing are among the principal props of R.A. No. 8180.
Congress could not have deregulated the downstream oil industry without these provisions.
Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory
pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction of
market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition. The need for
these vouchsafing provisions cannot be overstated. Before deregulation, PETRON, SHELL and CALTEX
had no real competitors but did not have a free run of the market because government controls both
the pricing and non-pricing aspects of the oil industry. After deregulation, PETRON, SHELL and CALTEX
remain unthreatened by real competition yet are no longer subject to control by government with
respect to their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a deregulated
market where competition can be corrupted and where market forces can be manipulated by
oligopolies.

The fall out effects of the defects of R.A. No. 8180 on our people have not escaped Congress. A lot of
our leading legislators have come out openly with bills seeking the repeal of these odious and offensive
provisions in R.A. No. 8180. In the Senate, Senator Freddie Webb has filed S.B. No. 2133 which is the
result of the hearings conducted by the Senate Committee on Energy. The hearings revealed that (1)
there was a need to level the playing field for the new entrants in the downstream oil industry, and (2)
there was no law punishing a person for selling petroleum products at unreasonable prices. Senator
Alberto G. Romulo also filed S.B. No. 2209 abolishing the tariff differential beginning January 1, 1998. He
declared that the amendment ". . . would mean that instead of just three (3) big oil companies there will
be other major oil companies to provide more competitive prices for the market and the consuming
public." Senator Heherson T . Alvarez, one of the principal proponents of R.A. No. 8180, also filed S.B.
No. 2290 increasing the penalty for violation of its section 9. It is his opinion as expressed in the
explanatory note of the bill that the present oil companies are engaged in cartelization despite R.A. No.
8180, viz,:

xxx xxx xxx

Since the downstream oil industry was fully deregulated in February 1997, there have been eight (8)
fuel price adjustments made by the three oil majors, namely: Caltex Philippines, Inc.; Petron
Corporation; and Pilipinas Shell Petroleum Corporation. Very noticeable in the price adjustments made,
however, is the uniformity in the pump prices of practically all petroleum products of the three oil
companies. This, despite the fact, that their selling rates should be determined by a combination of any
of the following factors: the prevailing peso-dollar exchange rate at the time payment is made for crude
purchases, sources of crude, and inventory levels of both crude and refined petroleum products. The
abovestated factors should have resulted in different, rather than identical prices.

The fact that the three (3) oil companies' petroleum products are uniformly priced suggests collusion,
amounting to cartelization, among Caltex Philippines, Inc., Petron Corporation and Pilipinas Shell
Petroleum Corporation to fix the prices of petroleum products in violation of paragraph (a), Section 9 of
R.A. No. 8180.

To deter this pernicious practice and to assure that present and prospective players in the
downstream oil industry conduct their business with conscience and propriety, cartel-like activities
ought to be severely penalized.

Senator Francisco S. Tatad also filed S.B. No. 2307 providing for a uniform tariff rate on imported
crude oil and refined petroleum products. In the explanatory note of the bill, he declared in no uncertain
terms that ". . . the present set-up has raised serious public concern over the way the three oil
companies have uniformly adjusted the prices of oil in the country, an indication of a possible existence
of a cartel or a cartel-like situation within the downstream oil industry. This situation is mostly attributed
to the foregoing provision on tariff differential, which has effectively discouraged the entry of new
players in the downstream oil industry."

In the House of Representatives, the moves to rehabilitate R.A. No. 8180 are equally feverish.
Representative Leopoldo E. San Buenaventura has filed H.B. No. 9826 removing the tariff differential for
imported crude oil and imported refined petroleum products. In the explanatory note of the bill, Rep.
Buenaventura explained:

xxx xxx xxx

As we now experience, this difference in tariff rates between imported crude oil and imported refined
petroleum products, unwittingly provided a built-in-advantage for the three existing oil refineries in the
country and eliminating competition which is a must in a free enterprise economy. Moreover, it created
a disincentive for other players to engage even initially in the importation and distribution of refined
petroleum products and ultimately in the putting up of refineries. This tariff differential virtually created
a monopoly of the downstream oil industry by the existing three oil companies as shown by their
uniform and capricious pricing of their products since this law took effect, to the great disadvantage of
the consuming public.

Thus, instead of achieving the desired effects of deregulation, that of free enterprise and a level
playing field in the downstream oil industry, R.A. 8180 has created an environment conducive to
cartelization, unfavorable, increased, unrealistic prices of petroleum products in the country by the
three existing refineries.

Representative Marcial C. Punzalan, Jr., filed H.B. No. 9981 to prevent collusion among the present oil
companies by strengthening the oversight function of the government, particularly its ability to subject
to a review any adjustment in the prices of gasoline and other petroleum products. In the explanatory
note of the bill, Rep. Punzalan, Jr., said:

xxx xxx xxx


To avoid this, the proposed bill seeks to strengthen the oversight function of government, particularly
its ability to review the prices set for gasoline and other petroleum products. It grants the Energy
Regulatory Board (ERB) the authority to review prices of oil and other petroleum products, as may be
petitioned by a person, group or any entity, and to subsequently compel any entity in the industry to
submit any and all documents relevant to the imposition of new prices. In cases where the Board
determines that there exist collusion, economic conspiracy, unfair trade practice, profiteering and/or
overpricing, it may take any step necessary to protect the public, including the readjustment of the
prices of petroleum products. Further, the Board may also impose the fine and penalty of imprisonment,
as prescribed in Section 9 of R.A. 8180, on any person or entity from the oil industry who is found guilty
of such prohibited acts.

By doing all of the above, the measure will effectively provide Filipino consumers with a venue where
their grievances can be heard and immediately acted upon by government.

Thus, this bill stands to benefit the Filipino consumer by making the price-setting process more
transparent and making it easier to prosecute those who perpetrate such prohibited acts as collusion,
overpricing, economic conspiracy and unfair trade.

Representative Sergio A.F . Apostol filed H.B. No. 10039 to remedy an omission in R.A. No. 8180 where
there is no agency in government that determines what is "reasonable" increase in the prices of oil
products. Representative Dente O. Tinga, one of the principal sponsors of R.A. No. 8180, filed H.B. No.
10057 to strengthen its anti-trust provisions. He elucidated in its explanatory note:

xxx xxx xxx

The definition of predatory pricing, however, needs to be tightened up particularly with respect to the
definitive benchmark price and the specific anti-competitive intent. The definition in the bill at hand
which was taken from the Areeda-Turner test in the United States on predatory pricing resolves the
questions. The definition reads, "Predatory pricing means selling or offering to sell any oil product at a
price below the average variable cost for the purpose of destroying competition, eliminating a
competitor or discouraging a competitor from entering the market."

The appropriate actions which may be resorted to under the Rules of Court in conjunction with the oil
deregulation law are adequate. But to stress their availability and dynamism, it is a good move to
incorporate all the remedies in the law itself. Thus, the present bill formalizes the concept of
government intervention and private suits to address the problem of antitrust violations. Specifically,
the government may file an action to prevent or restrain any act of cartelization or predatory pricing,
and if it has suffered any loss or damage by reason of the antitrust violation it may recover damages.
Likewise, a private person or entity may sue to prevent or restrain any such violation which will result in
damage to his business or property, and if he has already suffered damage he shall recover treble
damages. A class suit may also be allowed.

To make the DOE Secretary more effective in the enforcement of the law, he shall be given additional
powers to gather information and to require reports.

Representative Erasmo B. Damasing filed H.B. No. 7885 and has a more unforgiving view of R.A. No.
8180. He wants it completely repealed. He explained:

xxx xxx xxx

Contrary to the projections at the time the bill on the Downstream Oil Industry Deregulation was
discussed and debated upon in the plenary session prior to its approval into law, there aren't any new
players or investors in the oil industry. Thus, resulting in practically a cartel or monopoly in the oil
industry by the three (3) big oil companies, Caltex, Shell and Petron. So much so, that with the
deregulation now being partially implemented, the said oil companies have succeeded in increasing the
prices of most of their petroleum products with little or no interference at all from the government. In
the month of August, there was an increase of Fifty centavos (50) per liter by subsidizing the same with
the OPSF, this is only temporary as in March 1997, or a few months from now, there will be full
deregulation (Phase II) whereby the increase in the prices of petroleum products will be fully absorbed
by the consumers since OPSF will already be abolished by then. Certainly, this would make the lives of
our people, especially the unemployed ones, doubly difficult and unbearable.

The much ballyhooed coming in of new players in the oil industry is quite remote considering that
these prospective investors cannot fight the existing and well established oil companies in the country
today, namely, Caltex, Shell and Petron. Even if these new players will come in, they will still have no
chance to compete with the said three (3) existing big oil companies considering that there is an
imposition of oil tariff differential of 4% between importation of crude oil by the said oil refineries
paying only 3% tariff rate for the said importation and 7% tariff rate to be paid by businessmen who
have no oil refineries in the Philippines but will import finished petroleum/oil products which is being
taxed with 7% tariff rates.

So, if only to help the many who are poor from further suffering as a result of unmitigated increase in
oil products due to deregulation, it is a must that the Downstream Oil Industry Deregulation Act of 1996,
or R.A. 8180 be repealed completely.

Various resolutions have also been filed in the Senate calling for an immediate and comprehensive
review of R.A. No. 8180 to prevent the downpour of its ill effects on the people. Thus, S. Res. No. 574
was filed by Senator Gloria M. Macapagal entitled Resolution "Directing the Committee on Energy to
Inquire Into The Proper Implementation of the Deregulation of the Downstream Oil Industry and Oil Tax
Restructuring As Mandated Under R.A. Nos. 8180 and 8184, In Order to Make The Necessary Corrections
In the Apparent Misinterpretation Of The Intent And Provision Of The Laws And Curb The Rising Tide Of
Disenchantment Among The Filipino Consumers And Bring About The Real Intentions And Benefits Of
The Said Law." Senator Blas P. Ople filed S. Res. No. 664 entitled resolution "Directing the Committee on
Energy To Conduct An Inquiry In Aid Of Legislation To Review The Government's Oil Deregulation Policy
In Light Of The Successive Increases In Transportation, Electricity And Power Rates, As well As Of Food
And Other Prime Commodities And Recommend Appropriate Amendments To Protect The Consuming
Public." Senator Ople observed:

xxx xxx xxx

WHEREAS, since the passage of R.A. No. 8180, the Energy Regulatory Board (ERB) has imposed
successive increases in oil prices which has triggered increases in electricity and power rates,
transportation fares, as well as in prices of food and other prime commodities to the detriment of our
people, particularly the poor;

WHEREAS, the new players that were expected to compete with the oil cartel-Shell, Caltex and
Petron-have not come in;

WHEREAS, it is imperative that a review of the oil deregulation policy be made to consider appropriate
amendments to the existing law such as an extension of the transition phase before full deregulation in
order to give the competitive market enough time to develop;
WHEREAS, the review can include the advisability of providing some incentives in order to attract the
entry of new oil companies to effect a dynamic competitive market;

WHEREAS, it may also be necessary to defer the setting up of the institutional framework for full
deregulation of the oil industry as mandated under Executive Order No. 377 issued by President Ramos
last October 31, 1996 . . .

Senator Alberto G. Romulo filed S. Res. No. 769 entitled resolution "Directing the Committees on
Energy and Public Services In Aid Of Legislation To Assess The Immediate Medium And Long Term
Impact of Oil Deregulation On Oil Prices And The Economy." Among the reasons for the resolution is the
finding that "the requirement of a 40-day stock inventory effectively limits the entry of other oil firms in
the market with the consequence that instead of going down oil prices will rise."

Parallel resolutions have been filed in the House of Representatives. Representative Dante O. Tinga
filed H. Res. No. 1311 "Directing The Committee on Energy To Conduct An Inquiry, In Aid of Legislation,
Into The Pricing Policies And Decisions Of The Oil Companies Since The Implementation of Full
Deregulation Under the Oil Deregulation Act (R.A. No. 8180) For the Purpose of Determining In the
Context Of The Oversight Functions Of Congress Whether The Conduct Of The Oil Companies, Whether
Singly Or Collectively, Constitutes Cartelization Which Is A Prohibited Act Under R.A. No. 8180, And
What Measures Should Be Taken To Help Ensure The Successful Implementation Of The Law In
Accordance With Its Letter And Spirit, Including Recommending Criminal Prosecution Of the Officers
Concerned Of the Oil Companies If Warranted By The Evidence, And For Other Purposes."
Representatives Marcial C. Punzalan, Jr. Dante O. Tinga and Antonio E. Bengzon III filed H.R. No. 894
directing the House Committee on Energy to inquire into the proper implementation of the deregulation
of the downstream oil industry. House Resolution No. 1013 was also filed by Representatives Edcel C.
Lagman, Enrique T . Garcia, Jr. and Joker P. Arroyo urging the President to immediately suspend the
implementation of E.O. No. 392.

In recent memory there is no law enacted by the legislature afflicted with so much constitutional
deformities as R.A. No. 8180. Yet, R.A. No. 8180 deals with oil, a commodity whose supply and price
affect the ebb and flow of the lifeblood of the nation. Its shortage of supply or a slight, upward spiral in
its price shakes our economic foundation. Studies show that the areas most impacted by the movement
of oil are food manufacture, land transport, trade, electricity and water.38 At a time when our economy
is in a dangerous downspin, the perpetuation of R.A. No. 8180 threatens to multiply the number of our
people with bent backs and begging bowls. R.A. No. 8180 with its anti-competition provisions cannot be
allowed by this Court to stand even while Congress is working to remedy its defects.

The Court, however, takes note of the plea of PETRON, SHELL and CALTEX to lift our restraining order
to enable them to adjust upward the price of petroleum and petroleum products in view of the
plummeting value of the peso. Their plea, however, will now have to be addressed to the Energy
Regulatory Board as the effect of the declaration of unconstitutionality of R.A. No. 8180 is to revive the
former laws it repealed.39 The length of our return to the regime of regulation depends on Congress
which can fasttrack the writing of a new law on oil deregulation in accord with the Constitution.

With this Decision, some circles will chide the Court for interfering with an economic decision of
Congress. Such criticism is charmless for the Court is annulling R.A. No. 8180 not because it disagrees
with deregulation as an economic policy but because as cobbled by Congress in its present form, the law
violates the Constitution. The right call therefor should be for Congress to write a new oil deregulation
law that conforms with the Constitution and not for this Court to shirk its duty of striking down a law
that offends the Constitution. Striking down R.A. No. 8180 may cost losses in quantifiable terms to the
oil oligopolists. But the loss in tolerating the tampering of our Constitution is not quantifiable in pesos
and centavos. More worthy of protection than the supra-normal profits of private corporations is the
sanctity of the fundamental principles of the Constitution. Indeed when confronted by a law violating
the Constitution, the Court has no option but to strike it down dead. Lest it is missed, the Constitution is
a covenant that grants and guarantees both the political and economic rights of the people. The
Constitution mandates this Court to be the guardian not only of the people's political rights but their
economic rights as well. The protection of the economic rights of the poor and the powerless is of
greater importance to them for they are concerned more with the exoterics of living and less with the
esoterics of liberty. Hence, for as long as the Constitution reigns supreme so long will this Court be
vigilant in upholding the economic rights of our people especially from the onslaught of the powerful.
Our defense of the people's economic rights may appear heartless because it cannot be half-hearted.

IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No.
372 void.

SO ORDERED.

Regalado, Davide, Jr., Romero, Bellosillo and Vitug, JJ., concur.


Mendoza, J., concurs in the result.

Narvasa, C.J., is on leave.

Separate Opinions

PANGANIBAN, J., concurring:

I concur with the lucid and convincing ponencia of Mr. Justice Reynato S. Puno. I write to stress two
points:

1. The Issue Is Whether Oil Companies May Unilaterally

Fix Prices, Not Whether This Court May

Interfere in Economic Questions

With the issuance of the status quo order on October 7, 1997 requiring the three respondent oil
companies Petron, Shell and Caltex "to cease and desist from increasing the prices of gasoline and
other petroleum fuel products for a period of thirty (30) days," the Court has been accused of interfering
in purely economic policy matters1 or, worse, of arrogating unto itself price-regulatory powers.2 Let it
be emphasized that we have no desire nay, we have no power to intervene in, to change or to
repeal the laws of economics, in the same manner that we cannot and will not nullify or invalidate the
laws of physics or chemistry.

The issue here is not whether the Supreme Court may fix the retail prices of petroleum products,
Rather, the issue is whether RA 8180, the law allowing the oil companies to unilaterally set, increase or
decrease their prices, is valid or constitutional.
Under the Constitution,3 this Court has in appropriate cases the DUTY, not just the power, to
determine whether a law or a part thereof offends the Constitution and, if so, to annul and set it aside.4
Because a serious challenge has been hurled against the validity of one such law, namely RA 8180 its
criticality having been preliminarily determined from the petition, comments, reply and, most tellingly,
the oral argument on September 30, 1997 this Court, in the exercise of its mandated judicial
discretion, issued the status quo order to prevent the continued enforcement and implementation of a
law that was prima facie found to be constitutionally infirm. Indeed, after careful final deliberation, said
law is now ruled to be constitutionally defective thereby disabling respondent oil companies from
exercising their erstwhile power, granted by such defective statute, to determine prices by themselves.

Concededly, this Court has no power to pass upon the wisdom, merits and propriety of the acts of its
co-equal branches in government. However, it does have the prerogative to uphold the Constitution and
to strike down and annul a law that contravenes the Charter.5 From such duty and prerogative, it shall
never shirk or shy away.

By annulling RA 8180, this Court is not making a policy statement against deregulation. Quite the
contrary, it is simply invalidating a pseudo deregulation law which in reality restrains free trade and
perpetuates a cartel, an oligopoly. The Court is merely upholding constitutional adherence to a truly
competitive economy that releases the creative energy of free enterprise. It leaves to Congress, as the
policy-setting agency of the government, the speedy crafting of a genuine, constitutionally justified oil
deregulation law.

2. Everyone, Rich or Poor, Must Share

in the Burdens of Economic Dislocation

Much has been said and will be said about the alleged negative effect of this Court's holding on the oil
giants' profit and loss statements. We are not unaware of the disruptive impact of the depreciating peso
on the retail prices of refined petroleum products. But such price-escalating consequence adversely
affects not merely these oil companies which occupy hallowed places among the most profitable
corporate behemoths in our country. In these critical times of widespread economic dislocations,
abetted by currency fluctuations not entirely of domestic origin, all sectors of society agonize and suffer.
Thus, everyone, rich or poor, must share in the burdens of such economic aberrations.
I can understand foreign investors who see these price adjustments as necessary consequences of the
country's adherence to the free market, for that, in the first place, is the magnet for their presence here.
Understandably, their concern is limited to bottom lines and market share. But in all these mega
companies, there are also Filipino entrepreneurs and managers. I am sure there are patriots among
them who realize that, in times of economic turmoil, the poor and the underprivileged proportionately
suffer more than any other sector of society. There is a certain threshold of pain beyond which the
disadvantaged cannot endure. Indeed, it has been wisely said that "if the rich who are few will not help
the poor who are many, there will come a time when the few who are filled cannot escape the wrath of
the many who are hungry." Kaya't sa mga kababayan nating kapitalista at may kapangyarihan, nararapat
lamang na makiisa tayo sa mga walang palad at mahihirap sa mga araw ng pangangailangan. Huwag na
nating ipagdiinan ang kawalan ng tubo, o maging and panandaliang pagkalugi. At sa mga mangangalakal
na ganid at walang puso: hirap na hirap na po ang ating mga kababayan. Makonsiyensya naman kayo!

KAPUNAN, J., separate opinion:

Lately, the Court has been perceived (albeit erroneously) to be an unwelcome interloper in affairs and
concerns best left to legislators and policy-makers. Admittedly, the wisdom of political and economic
decisions are outside the scrutiny of the Court. However, the political question doctrine is not some
mantra that will automatically cloak executive orders and laws (or provisions thereof) with legitimacy. It
is this Court's bounden duty under Sec. 4(2), Art. VIII of the 1987 Constitution to decide all cases
involving the constitutionality of laws and under Sec. 1 of the same article, "to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government."

In the instant case, petitioners assail the constitutionality of certain provisions found in R.A. No 8180,
otherwise known as the "Downstream Oil Industry Deregulation Act of 1996" To avoid accusations of
undue interference with the workings of the two other branches of government, this discussion is
limited to the issue of whether or not the assailed provisions are germane to the law or serve the
purpose for which it was enacted.

The objective of the deregulation law is quite simple. As aptly enunciated in Sec. 2 thereof, it is to
"foster a truly competitive market which can better achieve the social policy objectives of fair prices and
adequate, continuous supply of environmentally-clean and high quality petroleum products." The key,
therefore, is free competition which is commonly defined as:
The act or action of seeking to gain what another is seeking to gain at the same time and usually
under or as if under fair or equitable rules and circumstances: a common struggle for the same object
especially among individuals of relatively equal standing . . . a market condition in which a large number
of independent buyers and sellers compete for identical commodity, deal freely with each other, and
retain the right of entry and exit from the market. (Webster's Third International Dictionary.)

and in a landscape where our oil industry is dominated by only three major oil firms, this translates
primarily into the establishment of a free market conducive to the entry of new and several and oil
companies in the business. Corollarily, it means the removal of any and all barriers that will hinder the
influx of prospective players. It is a truism in economics that if there are many players in the market,
healthy competition will ensue and in order to survive and profit the competitors will try to outdo each
other in terms of quality and price. The result: better quality products and competitive prices. In the
end, it will be the public that benefits (which is ultimately the most important goal of the law). Thus, it is
within this framework that we must determine the validity of the assailed provisions.

The 4% Tariff Differential

Sec. 5. Liberalization of Downstream Oil Industry and Tariff Treatment.

xxx xxx xxx

b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall
be imposed and collected on imported crude oil at the rate of three percent (3%) and imported refined
petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be
the same as that for imported crude oil: Provided, That beginning on January 1, 2004 the tariff rate on
imported crude oil and refined petroleum products shall be the same: Provided, further, That this
provision may be amended only by an Act of Congress;

Respondents are one in asserting that the 4% tariff differential between imported crude oil and
imported refined petroleum products is intended to encourage the new entrants to put up their own
refineries in the country. The advantages of domestic refining cannot be discounted, but we must view
this intent in the proper perspective. The primary purpose of the deregulation law is to open up the
market and establish free competition. The priority of the deregulation law, therefore, is to encourage
new oil companies to come in first. Incentives to encourage the building of local refineries should be
provided after the new oil companies have entered the Philippine market and are actively participating
therein.

The threshold question therefore is, is the 4% tariff differential a barrier to the entry of new oil
companies in the Philippine market?

It is. Since the prospective oil companies do not (as yet) have local refineries, they would have to
import refined petroleum products, on which a 7% tariff duty is imposed. On the other hand, the
existing oil companies already have domestic refineries and, therefore, only import crude oil which is
taxed at a lower rate of 3%. Tariffs are part of the costs of production. Hence, this means that with the
4% tariff differential (which becomes an added cost) the prospective players would have higher
production costs compared to the existing oil companies and it is precisely this factor which could
seriously affect its decision to enter the market.

Viewed in this light, the tariff differential between imported crude oil and refined petroleum products
becomes an obstacle to the entry of new players in the Philippine oil market. It defeats the purpose of
the law and should thus be struck down.

Public respondents contend that ". . . a higher tariff rate is not the overriding factor confronting a
prospective trader/importer but, rather, his ability to generate the desired internal rate of return (IRR)
and net present value (NPV). In other words, if said trader/importer, after some calculation, finds that
he can match the price of locally refined petroleum products and still earn the desired profit margin,
despite a higher tariff rate, he will be attracted to embark in such business. A tariff differential does not
per se make the business of importing refined petroleum product a losing proposition."1

The problem with this rationale, however, is that it is highly speculative. The opposite may well hold
true. The point is to make the prospect of engaging in the oil business in the Philippines appealing, so
why create a barrier in the first place?

There is likewise no merit in the argument that the removal of the tariff differential will revive the
10% (for crude oil) and 20% (for refined petroleum products) tariff rates that prevailed before the
enactment of R.A. No. 8180. What petitioners are assailing is the tariff differential. Phrased differently,
why is the tariff duty imposed on imported petroleum products not the same as that imposed on
imported crude oil? Declaring the tariff differential void is not equivalent to declaring the tariff itself
void. The obvious consequence thereof would be that imported refined petroleum products would now
be taxed at the same rate as imported crude oil which R.A. No. 8180 has specifically set at 3%. The old
rates have effectively been repealed by Sec. 24 of the same law.2

II

The Minimum Inventory Requirement

and the Prohibition Against Predatory Pricing

Sec. 6. Security of Supply. To ensure the security and continuity of petroleum crude and products
supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is
lower.

xxx xxx xxx

Sec. 9. Prohibited Acts. To ensure fair competition and prevent cartels and monopolies in the
downstream oil industry, the following acts are hereby prohibited:

xxx xxx xxx

b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below
the industry average cost so as to attract customers to the detriment of competitors.

The same rationale holds true for the two other assailed provisions in the Oil Deregulation law. The
primordial purpose of the law, I reiterate, is to create a truly free and competitive market. To achieve
this goal, provisions that show the possibility, or even the merest hint, of deterring or impeding the
ingress of new blood in the market should be eliminated outright. I am confident that our lawmakers
can formulate other measures that would accomplish the same purpose (insure security and continuity
of petroleum crude products supply and prevent fly by night operators, in the case of the minimum
inventory requirement, for instance) but would not have on the downside the effect of seriously
hindering the entry of prospective traders in the market.

The overriding consideration, which is the public interest and public benefit, calls for the levelling of
the playing fields for the existing oil companies and the prospective new entrants. Only when there are
many players in the market will free competition reign and economic development begin.

Consequently, Section 6 and Section 9(b) of R. A. No. 8180 should similarly be struck down.

III

Conclusion

Respondent oil companies vehemently deny the "cartelization" of the oil industry. Their parallel
business behaviour and uniform pricing are the result of competition, they say, in order to keep their
share of the market. This rationale fares well when oil prices are lowered, i.e. when one oil company
rolls back its prices, the others follow suit so as not to lose its market. But how come when one
increases its prices the others likewise follow? Is this competition at work?

Respondent oil companies repeatedly assert that due to the devaluation of the peso, they had to
increase the prices of their oil products, otherwise, they would lose, as they have allegedly been losing
specially with the issuance of a temporary restraining order by the Court. However, what we have on
record are only the self-serving lamentations of respondent oil companies. Not one has presented hard
data, independently verified, to attest to these losses. Mere allegations are not sufficient but must be
accompanied by supporting evidence. What probably is nearer the truth is that respondent oil
companies will not make as much profits as they have in the past if they are not allowed to increase the
prices of their products everytime the value of the peso slumps. But in the midst of worsening economic
difficulties and hardships suffered by the people, the very customers who have given them tremendous
profits throughout the years, is it fair and decent for said companies not to bear a bit of the burden by
forgoing a little of their profits?
PREMISES CONSIDERED, I vote that Section 5(b), Section 6 and Section 9(b) of R.A. No. 8180 be
declared unconstitutional.

MELO, J., dissenting:

With all due respect to my esteemed colleague, Mr. Justice Puno, who has, as usual, prepared a well-
written and comprehensive ponencia, I regret I cannot share the view that Republic Act No. 8180 should
be struck down as violative of the Constitution.

The law in question, Republic Act No. 8180, otherwise known as the Downstream Oil Deregulation Act
of 1996, contains, inter alia, the following provisions which have become the subject of the present
controversy, to wit:

Sec. 5. Liberalization of Downstream Oil Industry and Tariff Treatment.

xxx xxx xxx

(b). Any law to the contrary notwithstanding and starting with the effectivity of this act, tariff duty
shall be imposed and collected on imported crude oil at the rate of (3%) and imported refined
petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be
the same as that for imported crude

oil: Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined
petroleum products shall be the same: Provided, further, That this provision may be amended only by
an Act of Congress. . .

Sec. 6. Security of Supply. To ensure the security and continuity of petroleum crude and products
supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is
lower.
xxx xxx xxx

Sec. 9. Prohibited Acts. To ensure fair competition and prevent cartels and monopolies in the
downstream oil industry, the following acts are hereby prohibited:

xxx xxx xxx

b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below
the industry average cost so as to attract customers to the detriment of competitors.

xxx xxx xxx

Sec. 15. Implementation of Full Deregulation. Pursuant to Section 5(e) of Republic Act No. 7638, the
DOE [Department of Energy] shall, upon approval of the President, implement the full deregulation of
the downstream oil industry not later than March 1997. As far as practicable, the DOE shall time the full
deregulation when the prices of crude oil and petroleum products in the world market are declining and
when the exchange rate of the peso in relation to the US Dollar is stable. . .

In G. R. No. 124360, petitioners therein pray that the aforequoted Section 5(b) be declared null and
void. However, despite its pendency, President Ramos, pursuant to the above-cited Section 15 of the
assailed law, issued Executive Order No. 392 on 22 January 1997 declaring the full deregulation of the
downstream oil industry effective February 8, 1997. A few days after the implementation of said
Executive Order, the second consolidated petition was filed (G.R. No. 127867), seeking, inter alia, the
declaration of the unconstitutionality of Section 15 of the law on various grounds.

I submit that the instant consolidated petitions should be denied. In support of my view, I shall discuss
the arguments of the parties point by point.

1. The instant petitions do not raise a justiciable controversy as the issues raised therein pertain to
the wisdom and reasonableness of the provisions of the assailed law. The contentions made by
petitioners, that the "imposition of different tariff rates on imported crude oil and imported refined
petroleum products will not foster a truly competitive market, nor will it level the playing fields" and
that said imposition "does not deregulate the downstream oil industry, instead, it controls the oil
industry, contrary to the avowed policy of the law," are clearly policy matters which are within the
province of the political departments of the government. These submissions require a review of issues
that are in the nature of political questions, hence, clearly beyond the ambit of judicial inquiry.

A political question refers to a question of policy or to issues which, under the Constitution, are to be
decided by the people in their sovereign capacity, or in regard to which full discretionary authority has
been delegated to the legislative or executive branch of the government. Generally, political questions
are concerned with issues dependent upon the wisdom, not the legality, of a particular measure
(Taada vs. Cuenco, 100 Phil 101 [1957]).

Notwithstanding the expanded judicial power of this Court under Section 1, Article VIII of the
Constitution, an inquiry on the above-stated policy matters would delve on matters of wisdom which
are exclusively within the legislative powers of Congress.

2. The petitioners do not have the necessary locus standi to file the instant consolidated petitions.
Petitioners Lagman, Arroyo, Garcia, Tanada, and Tatad assail the constitutionality of the above-stated
laws through the instant consolidated petitions in their capacity as members of Congress, and as
taxpayers and concerned citizens. However, the existence of a constitutional issue in a case does not per
se confer or clothe a legislator with locus standi to bring suit. In Phil. Constitution Association
(PHILCONSA) v. Enriquez (235 SCRA 506 [1994]), we held that members of Congress may properly
challenge the validity of an official act of any department of the government only upon showing that the
assailed official act affects or impairs their rights and prerogatives as legislators. In Kilosbayan, Inc., et al.
vs. Morato, et al. (246 SCRA 540 [1995]), this Court further clarified that "if the complaint is not
grounded on the impairment of the power of Congress, legislators do not have standing to question the
validity of any law or official action."

Republic Act No. 8180 clearly does not violate or impair prerogatives, powers, and rights of Congress,
or the individual members thereof, considering that the assailed official act is the very act of Congress
itself authorizing the full deregulation of the downstream oil industry.

Neither can petitioners sue as taxpayers or concerned citizens. A condition sine qua non for the
institution of a taxpayer's suit is an allegation that the assailed action is an unconstitutional exercise of
the spending powers of Congress or that it constitutes an illegal disbursement of public funds. The
instant consolidated petitions do not allege that the assailed provisions of the law amount to an illegal
disbursement of public money. Hence, petitioners cannot, even as taxpayers or concerned citizens,
invoke this Court's power of judicial review.

Further, petitioners, including Flag, FDC, and Sanlakas, can not be deemed proper parties for lack of a
particularized interest or elemental substantial injury necessary to confer on them locus standi. The
interest of the person assailing the constitutionality of a statute must be direct and personal. He must
be able to show, not only that the jaw is invalid, but also that he has sustained or is in immediate danger
of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in
some indefinite way. It must appear that the person complaining has been or is about to be denied
some right or privilege to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute complained of Petitioners have not established such kind
of interest.

3. Section 5 (b) of Republic Act No. 8180 is not violative of the "one title-one subject" rule under
Section 26 (1), Article VI of the Constitution. It is not required that a provision of law be expressed in the
title thereof as long as the provision in question is embraced within the subject expressed in the title of
the law. The "title of a bill does not have to be a catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may be inferred from the title." (Association of
Small Landowners in the Phils., Inc. vs. Sec. of Agrarian Reform, 175 SCRA 343 [1989]) An "act having a
single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may
be considered in furtherance of such subject by providing for the method and means of carrying out the
general object." (Sinco, Phil. Political Law, 11th ed., p. 225).

The questioned tariff provision in Section 5 (b) was provided as a means to implement the
deregulation of the downstream oil industry and hence, is germane to the purpose of the assailed law.
The general subject of Republic Act No. 8180, as expressed in its title, "An Act Deregulating the
Downstream Oil Industry, and for the Other Purposes", necessarily implies that the law provides for the
means for such deregulation. One such means is the imposition of the differential tariff rates which are
provided to encourage new investors as well as existing players to put up new refineries. The aforesaid
provision is thus germane to, and in furtherance of, the object of deregulation. The trend of
jurisprudence, ever since Sumulong vs. COMELEC (73 Phil. 288 [1941]), is to give the above-stated
constitutional requirement a liberal interpretation. Hence, there is indeed substantial compliance with
said requirement.
Petitioners claim that because the House version of the assailed law did not impose any tariff rates
but merely set the policy of "zero differential" and that the Senate version did not set or fix any tariff,
the tariff changes being imposed by the assailed law was never subject of any deliberations in both
houses nor the Bicameral Conference Committee. I believe that this argument is bereft of merit.

The report of the Bicameral Conference Committee, which was precisely formed to settle differences
between the two houses of Congress, was approved by members thereof only after a full deliberation
on the conflicting provisions of the Senate version and the House version of the assailed law. Moreover,
the joint explanatory statement of said Committee which was submitted to both houses, explicitly states
that "while sub-paragraph (b) is a modification, its thrust and style were patterned after the House's
original sub-paragraph (b)." Thus, it cannot be denied that both houses were informed of the changes in
the aforestated provision of the assailed law. No legislator can validly state that he was not apprised of
the purposes, nature, and scope of the provisions of the law since the inclusion of the tariff differential
was clearly mentioned in the Bicameral Conference Committee's explanatory note.

As regards the power of the Bicameral Conference Committee to include in its report an entirely new
provision that is neither found in the House bill or Senate bill, this Court already upheld such power in
Tolentino vs. Sec. of Finance (235 SCRA 630 [1994]), where we ruled that the conference committee can
even include an amendment in the nature of a substitute so long as such amendment is germane to the
subject of the bill before it.

Lastly, in view of the "enrolled bill theory" pronounced by this Court as early as 1947 in the case of
Mabanag vs. Lopez Vito (78 Phil. 1 [1947]), the duly authenticated copy of the bill, signed by the proper
officers of each house, and approved by the President, is conclusive upon the courts not only of its
provisions but also of its due enactment.

4. Section 15 of Republic Act No. 8180 does not constitute undue delegation of legislative power.
Petitioners themselves admit that said section provides the Secretary of Energy and the President with
the bases of (1) "practicability", (2) "the decline of crude oil prices in the world market", and (3) "the
stability of the Peso exchange rate in relation to the US Dollar", in determining the effectivity of full
deregulation. To my mind, said bases are determinate and determinable guidelines, when examined in
the light of the tests for permissible delegation.

The assailed law satisfies the completeness test as it is complete and leaves nothing more for the
Executive Branch to do but to enforce the same. Section 2 thereof expressly provides that "it shall be the
policy of the State to deregulate the downstream oil industry to foster a truly competitive market which
can better achieve the social policy objectives of fair prices and adequate, continuous supply of
environmentally-clean and high-quality petroleum products." This provision manifestly declares the
policy to be achieved through the delegate, that is, the full deregulation of the downstream oil industry
toward the end of full and free competition. Section 15 further provides for all the basic terms and
conditions for its execution and thus belies the argument that the Executive Branch is given complete
liberty to determine whether or not to implement the law. Indeed, Congress did not only make full
deregulation mandatory, but likewise set a deadline (that is, not later than March 1997), within which
full deregulation should be achieved.

Congress may validly provide that a statute shall take effect or its operation shall be revived or
suspended or shall terminate upon the occurrence of certain events or contingencies the ascertainment
of which may be left to some official agency. In effect, contingent legislation may be issued by the
Executive Branch pursuant to a delegation of authority to determine some fact or state of things upon
which the enforcement of a law depends (Cruz, Phil. Political Law, 1996 ed., p. 96; Cruz vs. Youngberg,
56 Phil. 234 [1931]). This is a valid delegation since what the delegate performs is a matter of detail
whereas the statute remains complete in all essential matters. Section 15 falls under this kind of
delegated authority. Notably, the only aspect with respect to which the President can exercise
"discretion" is the determination of whether deregulation may be implemented on or before March,
1997, the deadline set by Congress. If he so decides, however, certain conditions must first be satisfied,
to wit: (1) the prices of crude oil and petroleum products in the world market are declining, and (2) the
exchange rate of the peso in relation to the US Dollar is stable. Significantly, the so-called "discretion"
pertains only to the ascertainment of the existence of conditions which are necessary for the effectivity
of the law and not a discretion as to what the law shall be.

In the same vein, I submit that the President's issuance of Executive Order No. 392 last January 22,
1997 is valid as contingent legislation. All the Chief Executive did was to exercise his delegated authority
to ascertain and recognize certain events or contingencies which prompted him to advance the
deregulation to a date earlier than March, 1997. Anyway, the law does not prohibit him from
implementing the deregulation prior to March, 1997, as long as the standards of the law are met.

Further, the law satisfies the sufficient standards test. The words "practicable", "declining", and
"stable", as used in Section 15 of the assailed law are sufficient standards that saliently "map out the
boundaries of the delegate's authority by defining the legislative policy and indicating the circumstances
under which it is to be pursued and effected." (Cruz, Phil. Political Law, 1996 ed., p. 98). Considering the
normal and ordinary definitions of these standards, I believe that the factors to be considered by the
President and/or Secretary of Energy in implementing full deregulation are, as mentioned, determinate
and determinable.
It is likewise noteworthy that the above-mentioned factors laid down by the subject law are not solely
dependent on Congress. Verily, oil pricing and the peso-dollar exchange rate are dependent on the
various forces working within the consumer market. Accordingly, it would have been unreasonable, or
even impossible, for the legislature to have provided for fixed and specific oil prices and exchange rates.
To require Congress to set forth specifics in the law would effectively deprive the legislature of the
flexibility and practicability which subordinate legislation is ultimately designed to provide. Besides, said
specifics are precisely the details which are beyond the competence of Congress, and thus, are properly
delegated to appropriate administrative agencies and executive officials to "fill in". It cannot be gainsaid
that the detail of the timing of full deregulation has been "filled in" by the President, upon the
recommendation of the DOE, when he issued Executive Order No. 329.

5. Republic Act No. 8180 is not violative of the constitutional prohibition against monopolies,
combinations in restraint of trade, and unfair competition. The three provisions relied upon by
petitioners (Section 5 [b] on tariff differential; Section 6 on the 40-day minimum inventory requirement;
and Section 9 [b] on the prohibited act of predatory pricing) actually promote, rather than restrain, free
trade and competition.

The tariff differential provided in the assailed law does not necessarily make the business of importing
refined petroleum products a losing proposition for new players. First, the decision of a prospective
trader/importer (subjected to the 7% tariff rate) to compete in the downstream oil industry as a new
player is based solely on whether he can, based on his computations, generate the desired internal rate
of return (IRR) and net present value (NPV) notwithstanding the imposition of a higher tariff rate.
Second, such a difference in tax treatment does not necessarily provide refiners of imported crude oil
with a significant level of economic advantage considering the huge amount of investments required in
putting up refinery plants which will then have to be added to said refiners' production cost. It is not
unreasonable to suppose that the additional cost imputed by higher tariff can anyway be overcome by a
new player in the business of importation due to lower operating costs, lower capital infusion, and lower
capital carrying costs. Consequently, the resultant cost of imported finished petroleum and that of
locally refined petroleum products may turn out to be approximately the same.

The existence of a tariff differential with regard to imported crude oil and imported finished products
is nothing new or novel. In fact, prior to the passage of Republic Act No. 8180, there existed a 10% tariff
differential resulting from the imposition of a 20% tariff rate on imported finished petroleum products
and 10% on imported crude oil (based on Executive Order No. 115). Significantly, Section 5 (b) of the
assailed law effectively lowered the tariff rates from 20% to 7% for imported refined petroleum
products, and 10% to 3% for imported crude oil, or a reduction of the differential from 10% to 4%. This
provision is certainly favorable to all in the downstream oil industry, whether they be existing or new
players. It thus follows that the 4% tariff differential aims to ensure the stable supply of petroleum
products by encouraging new entrants to put up oil refineries in the Philippines and to discourage fly-by-
night importers.

Further, the assailed tariff differential is likewise not violative of the equal protection clause of the
Constitution. It is germane to the declared policy of Republic Act No. 8180 which is to achieve (1) fair
prices; and (2) adequate and continuous supply of environmentally-clean and high quality petroleum
products. Said adequate and continuous supply of petroleum products will be achieved if new investors
or players are enticed to engage in the business of refining crude oil in the country. Existing refining
companies, are similarly encouraged to put up additional refining companies. All of this can be made
possible in view of the lower tariff duty on imported crude oil than that levied on imported refined
petroleum products. In effect, the lower tariff rates will enable the refiners to recoup their investments
considering that they will be investing billions of pesos in putting up their refineries in the Philippines.
That incidentally the existing refineries will be benefited by the tariff differential does not negate the
fact that the intended effect of the law is really to encourage the construction of new refineries,
whether by existing players or by new players.

As regards the 40-day inventory requirement, it must be emphasized that the 10% minimum
requirement is based on the refiners' and importers' annual sales volume, and hence, obviously
inapplicable to new entrants as they do not have an annual sales volume yet. Contrary to petitioners'
argument, this requirement is not intended to discourage new or prospective players in the downstream
oil industry. Rather, it guarantees "security and continuity of petroleum crude and products supply."
(Section 6, Republic Act No. 8180) This legal requirement is meant to weed out entities not sufficiently
qualified to participate in the local downstream oil industry. Consequently, it is meant to protect the
industry from fly-by-night business operators whose sole interest would be to make quick profits and
who may prove unrealiable in the effort to provide an adequate and steady supply of petroleum
products in the country. In effect, the aforestated provision benefits not only the three respondent oil
companies but all entities serious and committed to put up storage facilities and to participate as
serious players in the local oil industry. Moreover, it benefits the entire consuming public by its
guarantee of an "adequate continuous supply of environmentally-clean and high quality petroleum
products." It ensures that all companies in the downstream oil industry operate according to the same
high standards, that the necessary storage and distribution facilities are in place to support the level of
business activities involved, and that operations are conducted in a safe and environmentally sound
manner for the benefit of the consuming public.

Regarding the prohibition against predatory pricing, I believe that petitioners' argument is quite
misplaced. The provision actually protects new players by preventing, under pain of criminal sanction,
the more established oil firms from driving away any potential or actual competitor by taking undue
advantage of their size and relative financial stability. Obviously, the new players are the ones
susceptible to closing down on account of intolerable losses which will be brought about by fierce
competition with rival firms. The petitioners are merely working under the presumption that it is the
new players which would succumb to predatory pricing, and not the more established oil firms. This is
not a factual assertion but a rather baseless and conjectural assumption.

As to the alleged cartel among the three respondent oil companies, much as we suspect the same, its
existence calls for a finding of fact which this Court is not in the position to make. We cannot be called
to try facts and resolve factual issues such as this (Trade Unions of the Phils. vs. Laguesma, 236 SCRA 586
[1994]); Ledesma vs. NLRC, 246 SCRA 247 [1995]).

With respect to the amendatory bills filed by various Congressmen aimed to modify the alleged
defects of Republic Act No. 8180, I submit that such bills are the correct remedial steps to pursue,
instead of the instant petitions to set aside the statute sought to be amended. The proper forum is
Congress, not this Court.

Finally, as to the ponencia's endnote which cites the plea of respondent oil companies for the lifting of
the restraining order against them to enable them to adjust the prices of petroleum and petroleum
products in view of the devaluation of our currency, I am pensive as to how the matter can be addressed
to the obviously defunct Energy Regulatory Board. There has been a number of price increase in the
meantime. Too much water has passed under the bridge. It is too difficult to turn back the hands of
time.

For all the foregoing reasons, I, therefore, vote for the outright dismissal of the instant consolidated
petitions for lack of merit.

FRANCISCO, J., dissenting:

The continuing peso devaluation and the spiraling cost of commodities have become hard facts of life
nowadays. And the wearies are compounded by the ominous prospects of very unstable oil prices. Thus,
with the goal of rationalizing the oil scheme, Congress enacted Republic Act No. 8180, otherwise known
as the Downstream Oil Deregulation Act of 1996, the policy of which is "to foster a truly competitive
market which can better achieve the social policy objectives of fair prices and adequate, continuous
supply of environmentally-clean and high quality petroleum products".1 But if the noble and laudable
objective of this enactment is not accomplished, as to date oil prices continue to rise, can this Court be
called upon to declare the statute unconstitutional or must the Court desist from interfering in a matter
which is best left to the other branch/es of government?

The apparent thrust of the consolidated petitions is to declare, not the entirety, but only some
isolated portions of Republic Act No. 8180 unconstitutional. This is clear from the grounds enumerated
by the petitioners, to wit:

G.R. No. 124360

4.0. Grounds:

4.1.

THE IMPOSITION OF DIFFERENT TARIFF RATES ON IMPORTED CRUDE OIL AND IMPORTED REFINED
PETROLEUM PRODUCTS VIOLATES THE EQUAL PROTECTION OF THE LAWS.

4.2.

THE IMPOSITION OF DIFFERENT TARIFF RATES DOES NOT DEREGULATE THE DOWNSTREAM OIL
INDUSTRY, INSTEAD, IT CONTROLS THE OIL INDUSTRY, CONTRARY TO THE AVOWED POLICY OF THE
LAW.

4.3.

THE INCLUSION OF A TARIFF PROVISION IN SECTION 5(b) OF THE DOWNSTREAM OIL INDUSTRY
DEREGULATION LAW VIOLATES THE "ONE SUBJECT-ONE TITLE" RULE EMBODIED IN ARTICLE VI, SECTION
26 (1) OF THE CONSTITUTION.2
G.R. No. 127867

GROUNDS

THE IMPLEMENTATION OF FULL DEREGULATION PRIOR TO THE EXISTENCE OF A TRULY COMPETITIVE


MARKET VIOLATES THE CONSTITUTION PROHIBITING MONOPOLIES, UNFAIR COMPETITION AND
PRACTICES IN RESTRAINT OF TRADE.

R.A. No. 8180 CONTAINS DISGUISED REGULATIONS IN A SUPPOSEDLY DEREGULATED INDUSTRY


WHICH CREATE OR PROMOTE MONOPOLY OF THE INDUSTRY BY THE THREE EXISTING OIL COMPANIES.

THE REGULATORY AND PENAL PROVISIONS OF R.A. NO. 8180 VIOLATE THE EQUAL PROTECTION OF
THE LAWS, DUE PROCESS OF LAW AND THE CONSTITUTIONAL RIGHTS OF AN ACCUSED TO BE
INFORMED OF THE NATURE AND CAUSE OF THE ACCUSATION AGAINST HIM.3

And culled from petitioners' arguments in support of the above grounds the provisions of Republic Act
No. 8180 which they now impugn are:

A. Section 5(b) on the imposition of tariff which provides: "Any law to the contrary notwithstanding
and starting with the effectivity of this Act, tariff duty shall be imposed and collected on imported crude
oil at the rate of three percent (3%), and imported refined petroleum products at the rate of seven
percent (7%), except fuel oil and LPB, the rate for which shall be the same as that for imported crude oil:
Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum
products shall be the same: Provided further, That this provision may be amended only by an Act of
Congress." [Emphasis added].

B. Section 6 on the minimum inventory requirement, thus: "Security of Supply. To ensure the
security and continuity of petroleum crude and products supply, the DOE shall require the refiners and
importers to maintain a minimum inventory equivalent to ten percent (10%) of their respective annual
sales volume or forty (40) days of supply, whichever is lower."
C. Section 9(b) on predatory pricing: "Predatory pricing which means selling or offering to sell any
product at a price unreasonably below the industry average cost so as to attract customers to the
detriment of competitors.

Any person, including but not limited to the chief operating officer or chief executive officer of the
corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of
imprisonment for three (3) years and fine ranging from Five hundred thousand pesos (P500,000) to One
million pesos (P1,000,000).

D. Section 10 on the other prohibited acts which states: "Other Prohibited Acts. To ensure
compliance with the provisions of this Act, the failure to comply with any of the following shall likewise
be prohibited: 1) submission of any reportorial requirements; 2) maintenance of the minimum
inventory; and, 3) use of clean and safe (environment and worker-benign) technologies.

Any person, including but not limited to the chief operating officer or chief executive officer of the
corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of
imprisonment for two (2) years and fine ranging from Two hundred fifty thousand pesos (P250,000) to
Five hundred thousand pesos (P500,000).

E. Section 15 on the implementation of full deregulation, thus: "Implementation of Full


Deregulation. Pursuant to Section 5(e) of Republic Act No. 7683, the DOE shall, upon approval of the
President, implement the full deregulation of the downstream oil industry not later than March, 1997.
As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate of the peso in relation to the US
dollar is stable. Upon the implementation of the full deregulation as provided herein, the transition
phase is deemed terminated and the following laws are deemed repealed: . . . [Emphasis added].

F. Section 20 on the imposition of administrative fine: "Administrative Fine. The DOE may, after
due notice and hearing impose a fine in the amount of not less than One hundred thousand pesos
(P100,000) but not more than One million pesos (P1,000,000) upon any person or entity who violates
any of its reportorial and minimum inventory requirements, without prejudice to criminal sanctions."
Executive Order No. 392, entitled "Declaring Full Deregulation Of The Downstream Oil Industry" which
declared the full deregulation effective February 8, 1997, is also sought to be declared unconstitutional.

A careful scrutiny of the arguments proffered against the constitutionality of Republic Act No. 8180
betrays the petitioners' underlying motive of calling upon this Court to determine the wisdom and
efficacy of the enactment rather than its adherence to the Constitution. Nevertheless, I shall address the
issues raised if only to settle the alleged constitutional defects afflicting some provisions of Republic Act
No. 8180. To elaborate:

A. On the imposition of tariff . Petitioners argue that the existence of a tariff provision violated the
"one subject-one title"4 rule under Article VI, Section 26 (1) as the imposition of tariff rates is
"inconsistent with"5 and not at all germane to the deregulation of the oil industry. They also stress that
the variance between the seven percent (7%) duty on imported gasoline and other refined petroleum
products and three percent (3%) duty on crude oil gives a "4% tariff protection in favor of Petron, Shell
and Caltex which own and operate refineries here".6 The provision, petitioners insist, "inhibits
prospective oil players to do business here because it will unnecessarily increase their product cost by
4%."7 In other words, the tariff rates "does not foster 'a truly competitive market'."8 Also petitioners
claim that both Houses of Congress never envisioned imposing the seven percent (7%) and three
percent (3%) tariff on refined and crude oil products as both Houses advocated, prior to the holding of
the bicameral conference committee, a "zero differential". Moreover, petitioners insist that the tariff
rates violate "the equal protection of the laws enshrined in Article III, Section 1 of the Constitution"9
since the rates and their classification are not relevant in attaining the avowed policy of the law, not
based on substantial distinctions and limited to the existing condition.

The Constitution mandates that "every bill passed by Congress shall embrace only one subject which
shall be expressed in the title thereof".10 The object sought to be accomplished by this mandatory
requirement has been explained by the Court in the vintage case of Central Capiz v. Ramirez,11 thus:

The object sought to be accomplished and the mischief proposed to be remedied by this provision are
well known. Legislative assemblies, for the dispatch of business, often pass bills by their titles only
without requiring them to be read. A specious title sometimes covers legislation which, if its real
character had been disclosed, would not have commanded assent. To prevent surprise and fraud on the
legislature is one of the purposes this provision was intended to accomplish. Before the adoption of this
provision the title of a statute was often no indication of its subject or contents.
An evil this constitutional requirement was intended to correct was the blending in one and the same
statute of such things as were diverse in their nature, and were connected only to combine in favor of all
the advocates of each, thus often securing the passage of several measures no one of which could have
succeeded on its own merits. Mr. Cooley thus sums up in his review of the authorities defining the
objects of this provision: "It may therefore be assumed as settled that the purpose of this provision was:
First, to prevent hodge-podge or log-rolling legislation; second, to prevent surprise or fraud upon the
legislature by means of provisions in bills of which the titles gave no information, and which might
therefore be overlooked and carelessly and unintentionally adopted; and, third, to fairly apprise the
people, through such publication of legislative proceedings as is usually made, of the subjects of
legislation that are being considered, in order that they may have opportunity of being heard thereon by
petition or otherwise if they shall so desire." (Cooley's Constitutional Limitations, p. 143).12

The interpretation of "one subject-one title" rule, however, is never intended to impede or stifle
legislation. The requirement is to be given a practical rather than a technical construction and it would
be sufficient compliance if the title expresses the general subject and all the provisions of the enactment
are germane and material to the general subject.13 Congress is not required to employ in the title of an
enactment, language of such precision as to mirror, fully index or catalogue all the contents and the
minute details therein.14 All that is required is that the title should not cover legislation incongruous in
itself, and which by no fair intendment can be considered as having a necessary or proper connection.15
Hence, the title "An Act Amending Certain Sections of Republic Act Numbered One Thousand One
Hundred Ninety-Nine, otherwise known as the Agricultural Tenancy Act of the Philippines" was declared
by the Court sufficient to contain a provision empowering the Secretary of Justice, acting through a
tenancy mediation division, to carry out a national enforcement program, including the mediation of
tenancy disputes.16 The title "An Act Creating the Videogram Regulatory Board" was similarly declared
valid and sufficient to embrace a regulatory tax provision, i.e., the imposition of a thirty percent (30%)
tax on the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a
videogram containing a reproduction of any motion picture or audiovisual program with fifty percent
(50%) of the proceeds of the tax collected accruing to the province and the other fifty percent (50%) to
the municipality where the tax is collected.17 Likewise, the title "An Act To Further Amend
Commonwealth Act Numbered One Hundred Twenty, as amended by Republic Act Numbered Twenty
Six Hundred and Forty One" was declared sufficient to cover a provision limiting the allowable margin of
profit to not more than twelve percent (12%) annually of its investments plus two-month operating
expenses for franchise holder receiving at least fifty percent (50%) of its power from the National Power
Corporation.18

In the case at bar, the title "An Act Deregulating The Downstream Oil Industry, And For Other
Purposes" is adequate and comprehensive to cover the imposition of tariff rates. The tariff provision
under Section 5 (b) is one of the means of effecting deregulation. It must be observed that even prior to
the passage of Republic Act No. 8180 oil products have always been subject to tariff and surely Congress
is cognizant of such fact. The imposition of the seven percent (7%) and three percent (3%) duties on
imported gasoline and refined petroleum products and on crude oil, respectively, are germane to the
deregulation of the oil industry. The title, in fact, even included the broad and all-encompassing phrase
"And For Other Purposes" thereby indicating the legislative intent to cover anything that has some
relation to or connection with the deregulation of the oil industry. The tax provision is a mere tool and
mechanism considered essential by Congress to fulfill Republic Act No. 8180's objective of fostering a
competitive market and achieving the social policy objectives of a fair prices. To curtail any adverse
impact which the tariff treatment may cause by its application, and perhaps in answer to petitioners'
apprehension Congress included under the assailed section a proviso that will effectively eradicate the
tariff difference in the treatment of refined petroleum products and crude oil by stipulating "that
beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall
be the same."

The contention that tariff "does not foster a truly competitive market"19 and therefore restrains trade
and does not help achieve the purpose of deregulation is an issue not within the power of the Court to
resolve. Nonetheless, the Court's pronouncement in Tio vs. Videogram Regulatory Board appears to be
worth reiterating:

Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive,
confiscatory, and in restraint of trade. However, it is beyond serious question that a tax does not cease
to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The
power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely
venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of
the authority which exercise it. In imposing a tax, the legislature acts upon its constituents. This is, in
general, a sufficient security against erroneous and oppressive taxation.20 [Emphasis added]

Anent petitioners' claim that both House Bill No. 5264 and Senate Bill No. 1253, [the precursor bills of
Republic Act No. 8180], "did not impose any tariff rates but merely set the policy of 'zero differential' in
the House version, and nothing in the Senate version"21 is inconsequential. Suffice it to state that the
bicameral conference committee report was approved by the conferees thereof only "after full and free
conference" on the disagreeing provisions of Senate Bill No. 1253 and House Bill No. 5264. Indeed, the
"zero differential" on the tariff rates imposed in the House version was embodied in the law, save for a
slight delay in its implementation to January 1, 2004. Moreover, any objection on the validity of
provisions inserted by the legislative bicameral conference committee has

been passed upon by the Court in the recent case of Tolentino v. Secretary of Finance,22 which, in my
view, laid to rest any doubt as to the validity of the bill emerging out of a Conference Committee. The
Court in that case, speaking through Mr. Justice Mendoza, said:
As to the possibility of an entirely new bill emerging out of a Conference Committee, it has been
explained:

Under congressional rules of procedure, conference committees are not expected to make any
material change in the measure at issue, either by deleting provisions to which both houses have
already agreed or by inserting new provisions. But this is a difficult provision to enforce. Note the
problem when one house amends a proposal originating in either house by striking out everything
following the enacting clause and substituting provisions which make it an entirely new bill. The versions
are now altogether different, permitting a conference committee to draft essentially a new bill. . .

The result is a third version, which is considered an "amendment in the nature of a substitute," the
only requirement for which being that the third version be germane to the subject of the House and
Senate bills:

Indeed, this Court recently held that it is within the power of a conference committee to include in its
report an entirely new provision that is not found either in the House bill or in the Senate bill. If the
committee can propose an amendment consisting of one or two provisions, there is no reason why it
cannot propose several provisions, collectively considered as an "amendment in the nature of a
substitute," so long as such amendment is germane to the subject of the bills before the committee.
After all, its report was not final but needed the approval of both houses of Congress to become valid as
an act of the legislative department. The charge that in this case the Conference Committee acted as a
third legislative chamber is thus without any basis.

xxx xxx xxx

To be sure, nothing in the Rules [of the Senate and the House of Representatives] limits a conference
committee to a consideration of conflicting provisions. But Rule XLVI, (Sec.) 112 of the Rules of the
Senate is cited to the effect that "If there is no Rule applicable to a specific case the precedents of the
Legislative Department of the Philippines shall be resorted to, and as a supplement of these, the Rules
contained in Jefferson's Manual." The following is then quoted from the Jefferson's Manual:
The managers of a conference must confine themselves to the differences committed to them . . . and
may not include subjects not within disagreements, even though germane to a question in issue.

Note that, according to Rule XLIX, (Sec.) 112, in case there is no specific rule applicable, resort must be
to the legislative practice. The Jefferson's Manual is resorted to only as supplement. It is common place
in Congress that conference committee reports include new matters which, though germane, have not
been committed to the committee. This practice was admitted by Senator Raul S. Roco, petitioner in
G.R. No. 115543, during the oral argument in these cases. Whatever, then, may be provided in the
Jefferson's Manual must be considered to have been modified by the legislative practice. If a change is
desired in the practice it must be sought in Congress since this question is not covered by any
constitutional provision but is only an internal rule of each house. Thus, Art. VI, (Sec.) 16(3) of the
Constitution provides that "Each House may determine the rules of its proceedings . . ."

This observation applies to the other contention that the Rules of the two chambers were likewise
disregarded in the preparation of the Conference Committee Report because the Report did not contain
a "detailed and sufficiently explicit statement of changes in, or amendments to, the subject measure."
The Report used brackets and capital letters to indicate the changes. This is a standard practice in bill-
drafting. We cannot say that in using these marks and symbols the Committee violated the Rules of the
Senate and the House. Moreover, this Court is not the proper forum for the enforcement of these
internal Rules. To the contrary, as we have already ruled, "parliamentary rules are merely procedural
and with their observance the courts have no concern." Our concern is with the procedural
requirements of the Constitution for the enactment of laws. As far as these requirements are
concerned, we are satisfied that they have been faithfully observed in these cases.23

The other contention of petitioners that Section 5(b) "violates the equal protection of the laws
enshrined in Article III, Section 1 of the Constitution"24 deserves a short shrift for the equal protection
clause does not forbid reasonable classification based upon substantial distinctions where the
classification is germane to the purpose of the law and applies equally to all the members of the class.
The imposition of three percent (3%) tariff on crude oil, which is four percent (4%) lower than those
imposed on refined oil products, as persuasively argued by the Office of the Solicitor General, is based
on the substantial distinction that importers of crude oil, by necessity, have to establish and maintain
refinery plants to process and refine the crude oil thereby adding to their production costs. To
encourage these importers to set up refineries involving huge expenditures and investments which
peddlers and importers of refined petroleum products do not shoulder, Congress deemed it appropriate
to give a lower tariff rate to foster the entry of new "players" and investors in line with the law's policy
to create a competitive market. The residual contention that there is no substantial distinction in the
imposition of seven percent (7%) and three percent (3%) tariff since the law itself will level the tariff
rates between the imported crude oil and refined petroleum products come January 1, 2004, to my
mind, is addressed more to the legislative's prerogative to provide for the duration and period of
effectivity of the imposition. If Congress, after consultation, analysis of material data and due
deliberations, is convinced that by January 1, 2004, the investors and importers of crude oil would have
already recovered their huge investments and expenditures in establishing refineries and plants then it
is within its prerogative to lift the tariff differential. Such matter is well within the pale of legislative
power which the Court may not fetter. Besides, this again is in line with Republic Act No. 8180's avowed
policy to foster a truly competitive market which can achieve the social policy objectives of fair, if not
lower, prices.

B. On the minimum inventory requirement. Petitioners' attack on Section 6 is premised upon their
belief that the inventory requirement is hostile and not conducive for new oil companies to operate
here, and unduly favors Petron, Shell and Caltex, companies which according to them can easily hurdle
the requirement. I fail to see any legal or constitutional issue here more so as it is not raised by a party
with legal standing for petitioners do not claim to be the owners or operators of new oil companies
affected by the requirement. Whether or not the requirement is advantageous, disadvantageous or
conducive for new oil companies hinges on presumptions and speculations which is not within the realm
of judicial adjudication. It may not be amiss to mention here that according to the Office of the Solicitor
General "there are about thirty (30) new entrants in the downstream activities . . . , fourteen (14) of
which have started operation . . . , eight (8) having commenced operation last March 1997, and the rest
to operate between the second quarter of 1997 and the year 2000"25. Petitioners did not controvert
this averment which thereby cast serious doubt over their claim of "hostile" environment.

C. On predatory pricing. What petitioners bewail the most in Section 9(b) is "the definition of
'predatory pricing' [which] is too broad in scope and indefinite in meaning"26 and the penal sanction
imposed for its violation. Petitioners maintain that it would be the new oil companies or "players" which
would lower their prices to gain a foothold on the market and not Petron, Shell or Caltex, an occasion
for these three big oil "companies" to control the prices by keeping their average cost at a level which
will ensure their desired profit margin.27 Worse, the penal sanction, they add, deters new "players"
from entering the oil market and the practice of lowering prices is now condemned as a criminal act.

Petitioners' contentions are nebulous if not speculative. In the absence of any concrete proof or
evidence, the assertion that it will only be the new oil companies which will lower oil prices remains a
mere guess or suspicion. And then again petitioners are not the proper party to raise the issue. The
query on why lowering of prices should be penalized and the broad scope of predatory pricing is not for
this Court to traverse the same being reserved for Congress. The Court should not lose sight of the fact
that its duty under Article 5 of the Revised Penal Code is not to determine, define and legislate what act
or acts should be penalized, but simply to report to the Chief Executive the reasons why it believes an
act should be penalized, as well as why it considers a penalty excessive, thus:
Art. 5. Duty of the court in connection with acts which should be repressed but which are nor covered
by the law, and in cases of excessive penalties. Whenever a court has knowledge of any act which it
may deem proper to repress and which is not punishable by law, it shall render the proper decision, and
shall report to the Chief Executive, through the Department of Justice, the reasons which induce the
court to believe that said act should be made the subject of legislation.

In the same way the court shall submit to the Chief Executive, through the Department of Justice,
such statement as may be deemed proper, without suspending the execution of the sentence, when a
strict enforcement of the provisions of this Code would result in the imposition of a clearly excessive
penalty, taking into consideration the degree of malice and the injury caused by the offense.

Furthermore, in the absence of an actual conviction for violation of Section 9 (b) and the appropriate
appeal to this Court, I fail to see the need to discuss any longer the issue as it is not ripe for judicial
adjudication. Any pronouncement on the legality of the sanction will only be advisory.

D. On other prohibited acts. In discussing their objection to Section 10, together with Section 20,
petitioners assert that these sanctions "even provide stiff criminal and administrative penalties for
failure to maintain said minimum requirement and other regulations" and posed this query: "Are these
provisions consistent with the policy objective to level the playing [field] in a truly competitive
answer?"28 A more circumspect analysis of petitioners' grievance, however, does not present any legal
controversy. At best, their objection deals on policy considerations that can be more appropriately and
effectively addressed not by this Court but by Congress itself.

E. On the implementation of full deregulation under Section 15, and the validity of Executive Order
No. 392. Petitioners stress that "Section 15 of Republic Act No. 8180 delegates to the Secretary of
Energy and to the President of the Philippines the power to determine when to fully deregulate the
downstream oil industry"29 without providing for any standards "to determine when the prices of crude
oil in the world market are considered to be

'declining'"30 and when may the exchange rate be considered "stable" for purposes of determining
when it is "practicable" to declare full deregulation.31 In the absence of standards, Executive Order No.
392 which implemented Section 15 constitute "executive lawmaking,"32 hence the same should likewise
be struck down as invalid. Petitioners additionally decry the brief seven (7) month transition period
under Section 15 of Republic Act No. 8180. The premature full deregulation declared in Executive Order
No. 392 allowed Caltex, Petron, and Shell oil companies "to define the conditions under which any 'new
players' will have to adhere to in order to become competitive in the new deregulated market even
before such a market has been created."33 Petitioners are emphatic that Section 15 and Executive
Order No. 392 "have effectively legislated a cartel among respondent oil companies, directly violating
the Constitutional prohibition against unfair trade practices and combinations in restraint of trade".34

Section 15 of Republic Act No. 8180 provides for the implementation of full deregulation. It states:

Section 15 on the implementation of full deregulation, thus: "Implementation of Full Deregulation.


Pursuant to Section 5(e) of Republic Act No. 7683, the DOE shall, upon approval of the President,
implement the full deregulation of the downstream oil industry not later than March, 1997. As far as
practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate of the peso in relation to the US
dollar is stable. Upon the implementation of the full deregulation as provided herein, the transition
phase is deemed terminated and the following laws are deemed repealed: . . . [Emphasis added].

It appears from the foregoing that deregulation has to be implemented "not later than March 1997."
The provision is unequivocal, i.e., deregulation must be implemented on or before March 1997. The
Secretary of Energy and the President is devoid of any discretion to move the date of full deregulation to
any day later than March 1997. The second sentence which provides that "[a]s far as practicable, the
DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the US dollar is stable" did
not modify or reset to any other date the full deregulation of downstream oil industry. Not later than
March 1997 is a complete and definite period for full deregulation. What is conferred to the Department
of Energy in the implementation of full deregulation, with the approval of the President, is not the
power and discretion on what the law should be. The provision of Section 15 gave the President the
authority to proceed with deregulation on or before, but not after, March 1997, and if implementation
is made before March, 1997, to execute the same, if possible, when the prices of crude oil and
petroleum products in the world market are declining and the peso-dollar exchange rate is stable. But if
the implementation is made on March, 1997, the President has no option but to implement the law
regardless of the conditions of the prices of oil in the world market and the exchange rates.

The settled rule is that the legislative department may not delegate its power. Any attempt to
abdicate it is unconstitutional and void, based on the principle of potestas delegata non delegare potest.
In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to
inquire whether the statute was complete in all its terms and provisions when it left the hands of the
legislative so that nothing was left to the judgment of any other appointee or delegate of the
legislature.35 An enactment is said to be incomplete and invalid if it does not lay down any rule or
definite standard by which the administrative officer may be guided in the exercise of the discretionary
powers delegated to it.36 In People v. Vera,37 the Court laid down a guideline on how to distinguish
which power may or may not be delegated by Congress, to wit:

"The true distinction", says Judge Ranney, "is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as
to its execution, to be exercised under and in pursuance of the law. The first cannot done; to the latter
no valid objection can be made." (Cincinnati, W. & Z.R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St.,
77, 88 See also, Sutherland on Statutory Construction, sec. 68.)

Applying these parameters, I fail to see any taint of unconstitutionality that could vitiate the validity of
Section 15. The discretion to ascertain when may the prices of crude oil in the world market be deemed
"declining" or when may the peso-dollar exchange rate be considered "stable" relates to the assessment
and appreciation of facts. There is nothing essentially legislative in ascertaining the existence of facts or
conditions as the basis of the taking into effect of a

law38 so as to make the provision an undue delegation of legislative power. The alleged lack of
definitions of the terms employed in the statute does not give rise to undue delegation either for the
words of the statute, as a rule, must be given its literal meaning.39 Petitioners' contentions are
concerned with the details of execution by the executive officials tasked to implement deregulation. No
proviso in Section 15 may be construed as objectionable for the legislature has the latitude to provide
that a law may take effect upon the happening of future specified contingencies leaving to some other
person or body the power to determine when the specified contingency has arisen.40 The instant
petition is similarly situated with the past cases, as summarized in the case of People v. Vera, where the
Court ruled for the validity of several assailed statutes, to wit:

To the same effect are decisions of this court in Municipality of Cardona vs. Municipality of
Binangonan ([1917], 36 Phil. 547); Rubi vs. Provincial Board of Mindoro ([1919], 39 Phil. 660), and Cruz
vs. Youngberg ([1931], 56 Phil. 234). In the first of these cases, this court sustained the validity of a law
conferring upon the Governor-General authority to adjust provincial and municipal boundaries. In the
second case, this court held it lawful for the legislature to direct non-Christian inhabitants to take up
their habitation on unoccupied lands to be selected by the provincial governor and approved by the
provincial board. In the third case, it was held proper for the legislature to vest in the Governor-General
authority to suspend or not, at his discretion, the prohibition of the importation of foreign cattle, such
prohibition to be raised "if the conditions of the country make this advisable or if disease among foreign
cattle has ceased to be a menace to the agriculture and livestock of the lands."41
If the Governor-General in the case of Cruz v. Youngberg42 can "suspend or not, at his discretion, the
prohibition of the importation of cattle, such prohibition to be raised 'if the conditions of the country
make this advisable or if disease among foreign cattles has ceased to be a menace to the agriculture and
livestock of the lands" then with more reason that Section 15 of Republic Act No. 8180 can pass the
constitutional challenge as it has mandatorily fixed the effectivity date of full deregulation to not later
than March 1997, with or without the occurrence of stable peso-dollar exchange rate and declining oil
prices. Contrary to petitioners' protestations, therefore, Section 15 is complete and contains the basic
conditions and terms for its execution.

To restate, the policy of Republic Act No. 8180 is to deregulate the downstream oil industry and to
foster a truly competitive market which could lead to fair prices and adequate supply of environmentally
clean and high-quality petroleum products. This is the guiding principle installed by Congress upon
which the executive department of the government must conform. Section 15 of Republic Act No. 8180
sufficiently supplied the metes and bounds for the execution of full deregulation. In fact, a cursory
reading of Executive Order No. 39243 which advanced deregulation to February 8, 1997 convincingly
shows the determinable factors or standards, enumerated under Section 15, which were taken into
account by the Chief Executive in declaring full deregulation. I cannot see my way clear on how or why
Executive Order No. 392, as professed by petitioners, may be declared unconstitutional for adding the
"depletion of buffer fund" as one of the grounds for advancing the deregulation. The enumeration of
factors to be considered for full deregulation under Section 15 did not proscribe the Chief Executive
from acknowledging other instances that can equally assuage deregulation. What is important is that
the Chief Executive complied with and met the minimum standards supplied by the law. Executive Order
No. 392 may not, therefore, be branded as unconstitutional.

Petitioners' vehement objections on the short seven (7) month transition period under Section 15 and
the alleged resultant de facto formation of cartel are matters which fundamentally strike at the wisdom
of the law and the policy adopted by Congress. These are outside the power of the courts to settle; thus
I fail to see the need to digress any further.

F . On the imposition of administrative fine. The administrative fine under Section 20 is claimed to
be inconsistent with deregulation. The imposition of administrative fine for failure to meet the
reportorial and minimum inventory requirements, far from petitioners' submission, are geared towards
accomplishing the noble purpose of the law. The inventory requirement ensures the security and
continuity of petroleum crude and products supply,44 while the reportorial requirement is a mere
devise for the Department of Energy to monitor compliance with the law. In any event, the issue
pertains to the efficacy of incorporating in the law the administrative sanctions which lies outside the
Court's sphere and competence.

In fine, it seems to me that the petitions dwell on the insistent and recurrent arguments that the
imposition of different tariff rates on imported crude oil and imported petroleum products is violative of
the equal protection clause of the constitution; is not germane to the purpose of the law; does not
foster a truly competitive market; extends undue advantage to the existing oil refineries or companies;
and creates a cartel or a monopoly of sort among Shell, Caltex and Petron in clear contravention of the
Constitutional proscription against unfair trade practices and combinations in restraint of trade.
Unfortunately, this Court, in my view, is not at liberty to tread upon or even begin to discuss the merits
and demerits of petitioners' stance if it is to be faithful to the time honored doctrine of separation of
powers the underlying principle of our republican state.45 Nothing is so fundamental in our system of
government than its division into three distinct and independent branches, the executive, the legislative
and the judiciary, each branch having exclusive cognizance of matters within its jurisdiction, and
supreme within its own sphere. It is true that there is sometimes an inevitable overlapping and
interlacing of functions and duties between these departments. But this elementary tenet remains: the
legislative is vested with the power to make law, the judiciary to apply and interpret it. In cases like this,
"the judicial branch of the government has only one duty-to lay the article of the Constitution which is
invoked beside the statute which is challenged and to decide whether the letter squares with the
former."46 This having been done and finding no constitutional infirmity therein, the Court's task is
finished. Now whether or not the law fails to achieve its avowed policy because Congress did not
carefully evaluate the long term effects of some of its provisions is a matter clearly beyond this Court's
domain.

Perhaps it bears reiterating that the question of validity of every statute is first determined by the
legislative department of the government, and the courts will resolve every presumption in favor of its
validity. The courts will assume that the validity of the statute was fully considered by the legislature
when adopted. The wisdom or advisability of a particular statute is not a question for the courts to
determine. If a particular statute is within the constitutional power of the legislature to enact, it should
be sustained whether the courts agree or not in the wisdom of its enactment.47 This Court continues to
recognize that in the determination of actual cases and controversies, it must reflect the wisdom and
justice of the people as expressed through their representatives in the executive and legislative
branches of government. Thus, the presumption is always in favor of constitutionality for it is likewise
always presumed that in the enactment of a law or the adoption of a policy it is the people who speak
through their representatives. This principle is one of caution and circumspection in the exercise of the
grave and delicate function of judicial review48. Explaining this principle Thayer said,
It can only disregard the Act when those who have the right to make laws have not merely made a
mistake, but have made a very clear one-so clear that it is not open to rational question. That is the
standard of duty to which the courts bring legislative acts; that is the test which they apply-not merely
their own judgment as to constitutionality, but their conclusion as to what judgment is permissible to
another department which the constitution has charged with the duty of making it. This rule recognizes
that, having to the great, complex, ever-unfolding exigencies of regard government, much will seem
unconstitutional to one man, or body of men, may reasonably not seem so to another; that the
constitution often admits of different interpretations; that there is often a range of choice and
judgment; that in such cases the constitution does not impose upon the legislature any one specific
opinion, but leaves open their range of choice; and that whatever choice is rational is constitutional.49

The petitions discuss rather extensively the adverse economic implications of Republic Act No. 8180.
They put forward more than anything else, an assertion that an error of policy has been committed.
Reviewing the wisdom of the policies adopted by the executive and legislative departments is not within
the province of the Court.

It is safe to assume that the legislative branch of the government has taken into consideration and has
carefully weighed all points pertinent to the law in question. We cannot doubt that these matters have
been the object of intensive research and study nor that they have been subject of comprehensive
consultations with experts and debates in both houses of Congress. Judicial review at this juncture will
at best be limited and myopic. For admittedly, this Court cannot ponder on the points raised in the
petitions with the same technical competence as that of the economic experts who have contributed
valuable hours of study and deliberation in the passage of this law.

I realize that to invoke the doctrine of separation of powers at this crucial time may be viewed by
some as an act of shirking from our duty to uphold the Constitution at all cost. Let it be remembered,
however, that the doctrine of separation of powers is likewise enshrined in our Constitution and
deserves the same degree of fealty. In fact, it carries more significance now in the face of an onslaught
of similar cases brought before this Court by the opponents of almost every enacted law of major
importance. It is true that this Court is the last bulwark of justice and it is our task to preserve the
integrity of our fundamental law. But we cannot become, wittingly or unwittingly, instruments of every
aggrieved minority and losing legislator. While the laudable objectives of the law are put on hold, this
Court is faced with the unnecessary burden of disposing of issues merely contrived to fall within the
ambit of judicial review. All that is achieved is delay which is perhaps, sad to say, all that may have been
intended in the first place.
Indeed, whether Republic Act No. 8180 or portions thereof are declared unconstitutional, oil prices
may continue to rise, as they depend not on any law but on the volatile market and economic forces. It
is therefore the political departments of government that should address the issues raised herein for the
discretion to allow a deregulated oil industry and to determine its viability is lodged with the people in
their primary political capacity, which as things stand, has been delegated to Congress.

In the end, petitioners are not devoid of a remedy. To paraphrase the words of Justice Padilla in
Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas v. Tan,50 if petitioners seriously believe that
the adoption and continued application of Republic Act No. 8180 are prejudicial to the general welfare
or the interests of the majority of the people, they should seek recourse and relief from the political
branches of government, as they are now doing by moving for an amendment of the assailed provisions
in the correct forum which is Congress or for the exercise of the people's power of initiative on
legislation. The Court following the time honored doctrine of separation of powers, cannot substitute its
judgment for that of the Congress as to the wisdom, justice and advisability of Republic Act No. 8180.51

ACCORDINGLY, finding no merit in the instant petitions I vote for their outright dismissal.

Separate Opinions

PANGANIBAN, J., concurring:

I concur with the lucid and convincing ponencia of Mr. Justice Reynato S. Puno. I write to stress two
points:

1. The Issue Is Whether Oil Companies May Unilaterally

Fix Prices, Not Whether This Court May

Interfere in Economic Questions

With the issuance of the status quo order on October 7, 1997 requiring the three respondent oil
companies Petron, Shell and Caltex "to cease and desist from increasing the prices of gasoline and
other petroleum fuel products for a period of thirty (30) days," the Court has been accused of interfering
in purely economic policy matters1 or, worse, of arrogating unto itself price-regulatory powers.2 Let it
be emphasized that we have no desire nay, we have no power to intervene in, to change or to
repeal the laws of economics, in the same manner that we cannot and will not nullify or invalidate the
laws of physics or chemistry.

The issue here is not whether the Supreme Court may fix the retail prices of petroleum products,
Rather, the issue is whether RA 8180, the law allowing the oil companies to unilaterally set, increase or
decrease their prices, is valid or constitutional.

Under the Constitution,3 this Court has in appropriate cases the DUTY, not just the power, to
determine whether a law or a part thereof offends the Constitution and, if so, to annul and set it aside.4
Because a serious challenge has been hurled against the validity of one such law, namely RA 8180 its
criticality having been preliminarily determined from the petition, comments, reply and, most tellingly,
the oral argument on September 30, 1997 this Court, in the exercise of its mandated judicial
discretion, issued the status quo order to prevent the continued enforcement and implementation of a
law that was prima facie found to be constitutionally infirm. Indeed, after careful final deliberation, said
law is now ruled to be constitutionally defective thereby disabling respondent oil companies from
exercising their erstwhile power, granted by such defective statute, to determine prices by themselves.

Concededly, this Court has no power to pass upon the wisdom, merits and propriety of the acts of its
co-equal branches in government. However, it does have the prerogative to uphold the Constitution and
to strike down and annul a law that contravenes the Charter.5 From such duty and prerogative, it shall
never shirk or shy away.

By annulling RA 8180, this Court is not making a policy statement against deregulation. Quite the
contrary, it is simply invalidating a pseudo deregulation law which in reality restrains free trade and
perpetuates a cartel, an oligopoly. The Court is merely upholding constitutional adherence to a truly
competitive economy that releases the creative energy of free enterprise. It leaves to Congress, as the
policy-setting agency of the government, the speedy crafting of a genuine, constitutionally justified oil
deregulation law.

2. Everyone, Rich or Poor, Must Share

in the Burdens of Economic Dislocation


Much has been said and will be said about the alleged negative effect of this Court's holding on the oil
giants' profit and loss statements. We are not unaware of the disruptive impact of the depreciating peso
on the retail prices of refined petroleum products. But such price-escalating consequence adversely
affects not merely these oil companies which occupy hallowed places among the most profitable
corporate behemoths in our country. In these critical times of widespread economic dislocations,
abetted by currency fluctuations not entirely of domestic origin, all sectors of society agonize and suffer.
Thus, everyone, rich or poor, must share in the burdens of such economic aberrations.

I can understand foreign investors who see these price adjustments as necessary consequences of the
country's adherence to the free market, for that, in the first place, is the magnet for their presence here.
Understandably, their concern is limited to bottom lines and market share. But in all these mega
companies, there are also Filipino entrepreneurs and managers. I am sure there are patriots among
them who realize that, in times of economic turmoil, the poor and the underprivileged proportionately
suffer more than any other sector of society. There is a certain threshold of pain beyond which the
disadvantaged cannot endure. Indeed, it has been wisely said that "if the rich who are few will not help
the poor who are many, there will come a time when the few who are filled cannot escape the wrath of
the many who are hungry." Kaya't sa mga kababayan nating kapitalista at may kapangyarihan, nararapat
lamang na makiisa tayo sa mga walang palad at mahihirap sa mga araw ng pangangailangan. Huwag na
nating ipagdiinan ang kawalan ng tubo, o maging and panandaliang pagkalugi. At sa mga mangangalakal
na ganid at walang puso: hirap na hirap na po ang ating mga kababayan. Makonsiyensya naman kayo!

KAPUNAN, J., separate opinion:

Lately, the Court has been perceived (albeit erroneously) to be an unwelcome interloper in affairs and
concerns best left to legislators and policy-makers. Admittedly, the wisdom of political and economic
decisions are outside the scrutiny of the Court. However, the political question doctrine is not some
mantra that will automatically cloak executive orders and laws (or provisions thereof) with legitimacy. It
is this Court's bounden duty under Sec. 4(2), Art. VIII of the 1987 Constitution to decide all cases
involving the constitutionality of laws and under Sec. 1 of the same article, "to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government."

In the instant case, petitioners assail the constitutionality of certain provisions found in R.A. No 8180,
otherwise known as the "Downstream Oil Industry Deregulation Act of 1996" To avoid accusations of
undue interference with the workings of the two other branches of government, this discussion is
limited to the issue of whether or not the assailed provisions are germane to the law or serve the
purpose for which it was enacted.

The objective of the deregulation law is quite simple. As aptly enunciated in Sec. 2 thereof, it is to
"foster a truly competitive market which can better achieve the social policy objectives of fair prices and
adequate, continuous supply of environmentally-clean and high quality petroleum products." The key,
therefore, is free competition which is commonly defined as:

The act or action of seeking to gain what another is seeking to gain at the same time and usually
under or as if under fair or equitable rules and circumstances: a common struggle for the same object
especially among individuals of relatively equal standing . . . a market condition in which a large number
of independent buyers and sellers compete for identical commodity, deal freely with each other, and
retain the right of entry and exit from the market. (Webster's Third International Dictionary.)

and in a landscape where our oil industry is dominated by only three major oil firms, this translates
primarily into the establishment of a free market conducive to the entry of new and several and oil
companies in the business. Corollarily, it means the removal of any and all barriers that will hinder the
influx of prospective players. It is a truism in economics that if there are many players in the market,
healthy competition will ensue and in order to survive and profit the competitors will try to outdo each
other in terms of quality and price. The result: better quality products and competitive prices. In the
end, it will be the public that benefits (which is ultimately the most important goal of the law). Thus, it is
within this framework that we must determine the validity of the assailed provisions.

The 4% Tariff Differential

Sec. 5. Liberalization of Downstream Oil Industry and Tariff Treatment.

xxx xxx xxx


b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall
be imposed and collected on imported crude oil at the rate of three percent (3%) and imported refined
petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be
the same as that for imported crude oil: Provided, That beginning on January 1, 2004 the tariff rate on
imported crude oil and refined petroleum products shall be the same: Provided, further, That this
provision may be amended only by an Act of Congress;

Respondents are one in asserting that the 4% tariff differential between imported crude oil and
imported refined petroleum products is intended to encourage the new entrants to put up their own
refineries in the country. The advantages of domestic refining cannot be discounted, but we must view
this intent in the proper perspective. The primary purpose of the deregulation law is to open up the
market and establish free competition. The priority of the deregulation law, therefore, is to encourage
new oil companies to come in first. Incentives to encourage the building of local refineries should be
provided after the new oil companies have entered the Philippine market and are actively participating
therein.

The threshold question therefore is, is the 4% tariff differential a barrier to the entry of new oil
companies in the Philippine market?

It is. Since the prospective oil companies do not (as yet) have local refineries, they would have to
import refined petroleum products, on which a 7% tariff duty is imposed. On the other hand, the
existing oil companies already have domestic refineries and, therefore, only import crude oil which is
taxed at a lower rate of 3%. Tariffs are part of the costs of production. Hence, this means that with the
4% tariff differential (which becomes an added cost) the prospective players would have higher
production costs compared to the existing oil companies and it is precisely this factor which could
seriously affect its decision to enter the market.

Viewed in this light, the tariff differential between imported crude oil and refined petroleum products
becomes an obstacle to the entry of new players in the Philippine oil market. It defeats the purpose of
the law and should thus be struck down.

Public respondents contend that ". . . a higher tariff rate is not the overriding factor confronting a
prospective trader/importer but, rather, his ability to generate the desired internal rate of return (IRR)
and net present value (NPV). In other words, if said trader/importer, after some calculation, finds that
he can match the price of locally refined petroleum products and still earn the desired profit margin,
despite a higher tariff rate, he will be attracted to embark in such business. A tariff differential does not
per se make the business of importing refined petroleum product a losing proposition."1

The problem with this rationale, however, is that it is highly speculative. The opposite may well hold
true. The point is to make the prospect of engaging in the oil business in the Philippines appealing, so
why create a barrier in the first place?

There is likewise no merit in the argument that the removal of the tariff differential will revive the
10% (for crude oil) and 20% (for refined petroleum products) tariff rates that prevailed before the
enactment of R.A. No. 8180. What petitioners are assailing is the tariff differential. Phrased differently,
why is the tariff duty imposed on imported petroleum products not the same as that imposed on
imported crude oil? Declaring the tariff differential void is not equivalent to declaring the tariff itself
void. The obvious consequence thereof would be that imported refined petroleum products would now
be taxed at the same rate as imported crude oil which R.A. No. 8180 has specifically set at 3%. The old
rates have effectively been repealed by Sec. 24 of the same law.2

II

The Minimum Inventory Requirement

and the Prohibition Against Predatory Pricing

Sec. 6. Security of Supply. To ensure the security and continuity of petroleum crude and products
supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is
lower.

xxx xxx xxx

Sec. 9. Prohibited Acts. To ensure fair competition and prevent cartels and monopolies in the
downstream oil industry, the following acts are hereby prohibited:
xxx xxx xxx

b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below
the industry average cost so as to attract customers to the detriment of competitors.

The same rationale holds true for the two other assailed provisions in the Oil Deregulation law. The
primordial purpose of the law, I reiterate, is to create a truly free and competitive market. To achieve
this goal, provisions that show the possibility, or even the merest hint, of deterring or impeding the
ingress of new blood in the market should be eliminated outright. I am confident that our lawmakers
can formulate other measures that would accomplish the same purpose (insure security and continuity
of petroleum crude products supply and prevent fly by night operators, in the case of the minimum
inventory requirement, for instance) but would not have on the downside the effect of seriously
hindering the entry of prospective traders in the market.

The overriding consideration, which is the public interest and public benefit, calls for the levelling of
the playing fields for the existing oil companies and the prospective new entrants. Only when there are
many players in the market will free competition reign and economic development begin.

Consequently, Section 6 and Section 9(b) of R. A. No. 8180 should similarly be struck down.

III

Conclusion

Respondent oil companies vehemently deny the "cartelization" of the oil industry. Their parallel
business behaviour and uniform pricing are the result of competition, they say, in order to keep their
share of the market. This rationale fares well when oil prices are lowered, i.e. when one oil company
rolls back its prices, the others follow suit so as not to lose its market. But how come when one
increases its prices the others likewise follow? Is this competition at work?
Respondent oil companies repeatedly assert that due to the devaluation of the peso, they had to
increase the prices of their oil products, otherwise, they would lose, as they have allegedly been losing
specially with the issuance of a temporary restraining order by the Court. However, what we have on
record are only the self-serving lamentations of respondent oil companies. Not one has presented hard
data, independently verified, to attest to these losses. Mere allegations are not sufficient but must be
accompanied by supporting evidence. What probably is nearer the truth is that respondent oil
companies will not make as much profits as they have in the past if they are not allowed to increase the
prices of their products everytime the value of the peso slumps. But in the midst of worsening economic
difficulties and hardships suffered by the people, the very customers who have given them tremendous
profits throughout the years, is it fair and decent for said companies not to bear a bit of the burden by
forgoing a little of their profits?

PREMISES CONSIDERED, I vote that Section 5(b), Section 6 and Section 9(b) of R.A. No. 8180 be
declared unconstitutional.

MELO, J., dissenting:

With all due respect to my esteemed colleague, Mr. Justice Puno, who has, as usual, prepared a well-
written and comprehensive ponencia, I regret I cannot share the view that Republic Act No. 8180 should
be struck down as violative of the Constitution.

The law in question, Republic Act No. 8180, otherwise known as the Downstream Oil Deregulation Act
of 1996, contains, inter alia, the following provisions which have become the subject of the present
controversy, to wit:

Sec. 5. Liberalization of Downstream Oil Industry and Tariff Treatment.

xxx xxx xxx

(b). Any law to the contrary notwithstanding and starting with the effectivity of this act, tariff duty
shall be imposed and collected on imported crude oil at the rate of (3%) and imported refined
petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be
the same as that for imported crude

oil: Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined
petroleum products shall be the same: Provided, further, That this provision may be amended only by
an Act of Congress. . .

Sec. 6. Security of Supply. To ensure the security and continuity of petroleum crude and products
supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is
lower.

xxx xxx xxx

Sec. 9. Prohibited Acts. To ensure fair competition and prevent cartels and monopolies in the
downstream oil industry, the following acts are hereby prohibited:

xxx xxx xxx

b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below
the industry average cost so as to attract customers to the detriment of competitors.

xxx xxx xxx

Sec. 15. Implementation of Full Deregulation. Pursuant to Section 5(e) of Republic Act No. 7638, the
DOE [Department of Energy] shall, upon approval of the President, implement the full deregulation of
the downstream oil industry not later than March 1997. As far as practicable, the DOE shall time the full
deregulation when the prices of crude oil and petroleum products in the world market are declining and
when the exchange rate of the peso in relation to the US Dollar is stable. . .

In G. R. No. 124360, petitioners therein pray that the aforequoted Section 5(b) be declared null and
void. However, despite its pendency, President Ramos, pursuant to the above-cited Section 15 of the
assailed law, issued Executive Order No. 392 on 22 January 1997 declaring the full deregulation of the
downstream oil industry effective February 8, 1997. A few days after the implementation of said
Executive Order, the second consolidated petition was filed (G.R. No. 127867), seeking, inter alia, the
declaration of the unconstitutionality of Section 15 of the law on various grounds.

I submit that the instant consolidated petitions should be denied. In support of my view, I shall discuss
the arguments of the parties point by point.

1. The instant petitions do not raise a justiciable controversy as the issues raised therein pertain to
the wisdom and reasonableness of the provisions of the assailed law. The contentions made by
petitioners, that the "imposition of different tariff rates on imported crude oil and imported refined
petroleum products will not foster a truly competitive market, nor will it level the playing fields" and
that said imposition "does not deregulate the downstream oil industry, instead, it controls the oil
industry, contrary to the avowed policy of the law," are clearly policy matters which are within the
province of the political departments of the government. These submissions require a review of issues
that are in the nature of political questions, hence, clearly beyond the ambit of judicial inquiry.

A political question refers to a question of policy or to issues which, under the Constitution, are to be
decided by the people in their sovereign capacity, or in regard to which full discretionary authority has
been delegated to the legislative or executive branch of the government. Generally, political questions
are concerned with issues dependent upon the wisdom, not the legality, of a particular measure
(Taada vs. Cuenco, 100 Phil 101 [1957]).

Notwithstanding the expanded judicial power of this Court under Section 1, Article VIII of the
Constitution, an inquiry on the above-stated policy matters would delve on matters of wisdom which
are exclusively within the legislative powers of Congress.

2. The petitioners do not have the necessary locus standi to file the instant consolidated petitions.
Petitioners Lagman, Arroyo, Garcia, Tanada, and Tatad assail the constitutionality of the above-stated
laws through the instant consolidated petitions in their capacity as members of Congress, and as
taxpayers and concerned citizens. However, the existence of a constitutional issue in a case does not per
se confer or clothe a legislator with locus standi to bring suit. In Phil. Constitution Association
(PHILCONSA) v. Enriquez (235 SCRA 506 [1994]), we held that members of Congress may properly
challenge the validity of an official act of any department of the government only upon showing that the
assailed official act affects or impairs their rights and prerogatives as legislators. In Kilosbayan, Inc., et al.
vs. Morato, et al. (246 SCRA 540 [1995]), this Court further clarified that "if the complaint is not
grounded on the impairment of the power of Congress, legislators do not have standing to question the
validity of any law or official action."

Republic Act No. 8180 clearly does not violate or impair prerogatives, powers, and rights of Congress,
or the individual members thereof, considering that the assailed official act is the very act of Congress
itself authorizing the full deregulation of the downstream oil industry.

Neither can petitioners sue as taxpayers or concerned citizens. A condition sine qua non for the
institution of a taxpayer's suit is an allegation that the assailed action is an unconstitutional exercise of
the spending powers of Congress or that it constitutes an illegal disbursement of public funds. The
instant consolidated petitions do not allege that the assailed provisions of the law amount to an illegal
disbursement of public money. Hence, petitioners cannot, even as taxpayers or concerned citizens,
invoke this Court's power of judicial review.

Further, petitioners, including Flag, FDC, and Sanlakas, can not be deemed proper parties for lack of a
particularized interest or elemental substantial injury necessary to confer on them locus standi. The
interest of the person assailing the constitutionality of a statute must be direct and personal. He must
be able to show, not only that the jaw is invalid, but also that he has sustained or is in immediate danger
of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in
some indefinite way. It must appear that the person complaining has been or is about to be denied
some right or privilege to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute complained of Petitioners have not established such kind
of interest.

3. Section 5 (b) of Republic Act No. 8180 is not violative of the "one title-one subject" rule under
Section 26 (1), Article VI of the Constitution. It is not required that a provision of law be expressed in the
title thereof as long as the provision in question is embraced within the subject expressed in the title of
the law. The "title of a bill does not have to be a catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may be inferred from the title." (Association of
Small Landowners in the Phils., Inc. vs. Sec. of Agrarian Reform, 175 SCRA 343 [1989]) An "act having a
single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may
be considered in furtherance of such subject by providing for the method and means of carrying out the
general object." (Sinco, Phil. Political Law, 11th ed., p. 225).
The questioned tariff provision in Section 5 (b) was provided as a means to implement the
deregulation of the downstream oil industry and hence, is germane to the purpose of the assailed law.
The general subject of Republic Act No. 8180, as expressed in its title, "An Act Deregulating the
Downstream Oil Industry, and for the Other Purposes", necessarily implies that the law provides for the
means for such deregulation. One such means is the imposition of the differential tariff rates which are
provided to encourage new investors as well as existing players to put up new refineries. The aforesaid
provision is thus germane to, and in furtherance of, the object of deregulation. The trend of
jurisprudence, ever since Sumulong vs. COMELEC (73 Phil. 288 [1941]), is to give the above-stated
constitutional requirement a liberal interpretation. Hence, there is indeed substantial compliance with
said requirement.

Petitioners claim that because the House version of the assailed law did not impose any tariff rates
but merely set the policy of "zero differential" and that the Senate version did not set or fix any tariff,
the tariff changes being imposed by the assailed law was never subject of any deliberations in both
houses nor the Bicameral Conference Committee. I believe that this argument is bereft of merit.

The report of the Bicameral Conference Committee, which was precisely formed to settle differences
between the two houses of Congress, was approved by members thereof only after a full deliberation
on the conflicting provisions of the Senate version and the House version of the assailed law. Moreover,
the joint explanatory statement of said Committee which was submitted to both houses, explicitly states
that "while sub-paragraph (b) is a modification, its thrust and style were patterned after the House's
original sub-paragraph (b)." Thus, it cannot be denied that both houses were informed of the changes in
the aforestated provision of the assailed law. No legislator can validly state that he was not apprised of
the purposes, nature, and scope of the provisions of the law since the inclusion of the tariff differential
was clearly mentioned in the Bicameral Conference Committee's explanatory note.

As regards the power of the Bicameral Conference Committee to include in its report an entirely new
provision that is neither found in the House bill or Senate bill, this Court already upheld such power in
Tolentino vs. Sec. of Finance (235 SCRA 630 [1994]), where we ruled that the conference committee can
even include an amendment in the nature of a substitute so long as such amendment is germane to the
subject of the bill before it.

Lastly, in view of the "enrolled bill theory" pronounced by this Court as early as 1947 in the case of
Mabanag vs. Lopez Vito (78 Phil. 1 [1947]), the duly authenticated copy of the bill, signed by the proper
officers of each house, and approved by the President, is conclusive upon the courts not only of its
provisions but also of its due enactment.
4. Section 15 of Republic Act No. 8180 does not constitute undue delegation of legislative power.
Petitioners themselves admit that said section provides the Secretary of Energy and the President with
the bases of (1) "practicability", (2) "the decline of crude oil prices in the world market", and (3) "the
stability of the Peso exchange rate in relation to the US Dollar", in determining the effectivity of full
deregulation. To my mind, said bases are determinate and determinable guidelines, when examined in
the light of the tests for permissible delegation.

The assailed law satisfies the completeness test as it is complete and leaves nothing more for the
Executive Branch to do but to enforce the same. Section 2 thereof expressly provides that "it shall be the
policy of the State to deregulate the downstream oil industry to foster a truly competitive market which
can better achieve the social policy objectives of fair prices and adequate, continuous supply of
environmentally-clean and high-quality petroleum products." This provision manifestly declares the
policy to be achieved through the delegate, that is, the full deregulation of the downstream oil industry
toward the end of full and free competition. Section 15 further provides for all the basic terms and
conditions for its execution and thus belies the argument that the Executive Branch is given complete
liberty to determine whether or not to implement the law. Indeed, Congress did not only make full
deregulation mandatory, but likewise set a deadline (that is, not later than March 1997), within which
full deregulation should be achieved.

Congress may validly provide that a statute shall take effect or its operation shall be revived or
suspended or shall terminate upon the occurrence of certain events or contingencies the ascertainment
of which may be left to some official agency. In effect, contingent legislation may be issued by the
Executive Branch pursuant to a delegation of authority to determine some fact or state of things upon
which the enforcement of a law depends (Cruz, Phil. Political Law, 1996 ed., p. 96; Cruz vs. Youngberg,
56 Phil. 234 [1931]). This is a valid delegation since what the delegate performs is a matter of detail
whereas the statute remains complete in all essential matters. Section 15 falls under this kind of
delegated authority. Notably, the only aspect with respect to which the President can exercise
"discretion" is the determination of whether deregulation may be implemented on or before March,
1997, the deadline set by Congress. If he so decides, however, certain conditions must first be satisfied,
to wit: (1) the prices of crude oil and petroleum products in the world market are declining, and (2) the
exchange rate of the peso in relation to the US Dollar is stable. Significantly, the so-called "discretion"
pertains only to the ascertainment of the existence of conditions which are necessary for the effectivity
of the law and not a discretion as to what the law shall be.

In the same vein, I submit that the President's issuance of Executive Order No. 392 last January 22,
1997 is valid as contingent legislation. All the Chief Executive did was to exercise his delegated authority
to ascertain and recognize certain events or contingencies which prompted him to advance the
deregulation to a date earlier than March, 1997. Anyway, the law does not prohibit him from
implementing the deregulation prior to March, 1997, as long as the standards of the law are met.

Further, the law satisfies the sufficient standards test. The words "practicable", "declining", and
"stable", as used in Section 15 of the assailed law are sufficient standards that saliently "map out the
boundaries of the delegate's authority by defining the legislative policy and indicating the circumstances
under which it is to be pursued and effected." (Cruz, Phil. Political Law, 1996 ed., p. 98). Considering the
normal and ordinary definitions of these standards, I believe that the factors to be considered by the
President and/or Secretary of Energy in implementing full deregulation are, as mentioned, determinate
and determinable.

It is likewise noteworthy that the above-mentioned factors laid down by the subject law are not solely
dependent on Congress. Verily, oil pricing and the peso-dollar exchange rate are dependent on the
various forces working within the consumer market. Accordingly, it would have been unreasonable, or
even impossible, for the legislature to have provided for fixed and specific oil prices and exchange rates.
To require Congress to set forth specifics in the law would effectively deprive the legislature of the
flexibility and practicability which subordinate legislation is ultimately designed to provide. Besides, said
specifics are precisely the details which are beyond the competence of Congress, and thus, are properly
delegated to appropriate administrative agencies and executive officials to "fill in". It cannot be gainsaid
that the detail of the timing of full deregulation has been "filled in" by the President, upon the
recommendation of the DOE, when he issued Executive Order No. 329.

5. Republic Act No. 8180 is not violative of the constitutional prohibition against monopolies,
combinations in restraint of trade, and unfair competition. The three provisions relied upon by
petitioners (Section 5 [b] on tariff differential; Section 6 on the 40-day minimum inventory requirement;
and Section 9 [b] on the prohibited act of predatory pricing) actually promote, rather than restrain, free
trade and competition.

The tariff differential provided in the assailed law does not necessarily make the business of importing
refined petroleum products a losing proposition for new players. First, the decision of a prospective
trader/importer (subjected to the 7% tariff rate) to compete in the downstream oil industry as a new
player is based solely on whether he can, based on his computations, generate the desired internal rate
of return (IRR) and net present value (NPV) notwithstanding the imposition of a higher tariff rate.
Second, such a difference in tax treatment does not necessarily provide refiners of imported crude oil
with a significant level of economic advantage considering the huge amount of investments required in
putting up refinery plants which will then have to be added to said refiners' production cost. It is not
unreasonable to suppose that the additional cost imputed by higher tariff can anyway be overcome by a
new player in the business of importation due to lower operating costs, lower capital infusion, and lower
capital carrying costs. Consequently, the resultant cost of imported finished petroleum and that of
locally refined petroleum products may turn out to be approximately the same.

The existence of a tariff differential with regard to imported crude oil and imported finished products
is nothing new or novel. In fact, prior to the passage of Republic Act No. 8180, there existed a 10% tariff
differential resulting from the imposition of a 20% tariff rate on imported finished petroleum products
and 10% on imported crude oil (based on Executive Order No. 115). Significantly, Section 5 (b) of the
assailed law effectively lowered the tariff rates from 20% to 7% for imported refined petroleum
products, and 10% to 3% for imported crude oil, or a reduction of the differential from 10% to 4%. This
provision is certainly favorable to all in the downstream oil industry, whether they be existing or new
players. It thus follows that the 4% tariff differential aims to ensure the stable supply of petroleum
products by encouraging new entrants to put up oil refineries in the Philippines and to discourage fly-by-
night importers.

Further, the assailed tariff differential is likewise not violative of the equal protection clause of the
Constitution. It is germane to the declared policy of Republic Act No. 8180 which is to achieve (1) fair
prices; and (2) adequate and continuous supply of environmentally-clean and high quality petroleum
products. Said adequate and continuous supply of petroleum products will be achieved if new investors
or players are enticed to engage in the business of refining crude oil in the country. Existing refining
companies, are similarly encouraged to put up additional refining companies. All of this can be made
possible in view of the lower tariff duty on imported crude oil than that levied on imported refined
petroleum products. In effect, the lower tariff rates will enable the refiners to recoup their investments
considering that they will be investing billions of pesos in putting up their refineries in the Philippines.
That incidentally the existing refineries will be benefited by the tariff differential does not negate the
fact that the intended effect of the law is really to encourage the construction of new refineries,
whether by existing players or by new players.

As regards the 40-day inventory requirement, it must be emphasized that the 10% minimum
requirement is based on the refiners' and importers' annual sales volume, and hence, obviously
inapplicable to new entrants as they do not have an annual sales volume yet. Contrary to petitioners'
argument, this requirement is not intended to discourage new or prospective players in the downstream
oil industry. Rather, it guarantees "security and continuity of petroleum crude and products supply."
(Section 6, Republic Act No. 8180) This legal requirement is meant to weed out entities not sufficiently
qualified to participate in the local downstream oil industry. Consequently, it is meant to protect the
industry from fly-by-night business operators whose sole interest would be to make quick profits and
who may prove unrealiable in the effort to provide an adequate and steady supply of petroleum
products in the country. In effect, the aforestated provision benefits not only the three respondent oil
companies but all entities serious and committed to put up storage facilities and to participate as
serious players in the local oil industry. Moreover, it benefits the entire consuming public by its
guarantee of an "adequate continuous supply of environmentally-clean and high quality petroleum
products." It ensures that all companies in the downstream oil industry operate according to the same
high standards, that the necessary storage and distribution facilities are in place to support the level of
business activities involved, and that operations are conducted in a safe and environmentally sound
manner for the benefit of the consuming public.

Regarding the prohibition against predatory pricing, I believe that petitioners' argument is quite
misplaced. The provision actually protects new players by preventing, under pain of criminal sanction,
the more established oil firms from driving away any potential or actual competitor by taking undue
advantage of their size and relative financial stability. Obviously, the new players are the ones
susceptible to closing down on account of intolerable losses which will be brought about by fierce
competition with rival firms. The petitioners are merely working under the presumption that it is the
new players which would succumb to predatory pricing, and not the more established oil firms. This is
not a factual assertion but a rather baseless and conjectural assumption.

As to the alleged cartel among the three respondent oil companies, much as we suspect the same, its
existence calls for a finding of fact which this Court is not in the position to make. We cannot be called
to try facts and resolve factual issues such as this (Trade Unions of the Phils. vs. Laguesma, 236 SCRA 586
[1994]); Ledesma vs. NLRC, 246 SCRA 247 [1995]).

With respect to the amendatory bills filed by various Congressmen aimed to modify the alleged
defects of Republic Act No. 8180, I submit that such bills are the correct remedial steps to pursue,
instead of the instant petitions to set aside the statute sought to be amended. The proper forum is
Congress, not this Court.

Finally, as to the ponencia's endnote which cites the plea of respondent oil companies for the lifting of
the restraining order against them to enable them to adjust the prices of petroleum and petroleum
products in view of the devaluation of our currency, I am pensive as to how the matter can be addressed
to the obviously defunct Energy Regulatory Board. There has been a number of price increase in the
meantime. Too much water has passed under the bridge. It is too difficult to turn back the hands of
time.
For all the foregoing reasons, I, therefore, vote for the outright dismissal of the instant consolidated
petitions for lack of merit.

FRANCISCO, J., dissenting:

The continuing peso devaluation and the spiraling cost of commodities have become hard facts of life
nowadays. And the wearies are compounded by the ominous prospects of very unstable oil prices. Thus,
with the goal of rationalizing the oil scheme, Congress enacted Republic Act No. 8180, otherwise known
as the Downstream Oil Deregulation Act of 1996, the policy of which is "to foster a truly competitive
market which can better achieve the social policy objectives of fair prices and adequate, continuous
supply of environmentally-clean and high quality petroleum products".1 But if the noble and laudable
objective of this enactment is not accomplished, as to date oil prices continue to rise, can this Court be
called upon to declare the statute unconstitutional or must the Court desist from interfering in a matter
which is best left to the other branch/es of government?

The apparent thrust of the consolidated petitions is to declare, not the entirety, but only some
isolated portions of Republic Act No. 8180 unconstitutional. This is clear from the grounds enumerated
by the petitioners, to wit:

G.R. No. 124360

4.0. Grounds:

4.1.

THE IMPOSITION OF DIFFERENT TARIFF RATES ON IMPORTED CRUDE OIL AND IMPORTED REFINED
PETROLEUM PRODUCTS VIOLATES THE EQUAL PROTECTION OF THE LAWS.

4.2.
THE IMPOSITION OF DIFFERENT TARIFF RATES DOES NOT DEREGULATE THE DOWNSTREAM OIL
INDUSTRY, INSTEAD, IT CONTROLS THE OIL INDUSTRY, CONTRARY TO THE AVOWED POLICY OF THE
LAW.

4.3.

THE INCLUSION OF A TARIFF PROVISION IN SECTION 5(b) OF THE DOWNSTREAM OIL INDUSTRY
DEREGULATION LAW VIOLATES THE "ONE SUBJECT-ONE TITLE" RULE EMBODIED IN ARTICLE VI, SECTION
26 (1) OF THE CONSTITUTION.2

G.R. No. 127867

GROUNDS

THE IMPLEMENTATION OF FULL DEREGULATION PRIOR TO THE EXISTENCE OF A TRULY COMPETITIVE


MARKET VIOLATES THE CONSTITUTION PROHIBITING MONOPOLIES, UNFAIR COMPETITION AND
PRACTICES IN RESTRAINT OF TRADE.

R.A. No. 8180 CONTAINS DISGUISED REGULATIONS IN A SUPPOSEDLY DEREGULATED INDUSTRY


WHICH CREATE OR PROMOTE MONOPOLY OF THE INDUSTRY BY THE THREE EXISTING OIL COMPANIES.

THE REGULATORY AND PENAL PROVISIONS OF R.A. NO. 8180 VIOLATE THE EQUAL PROTECTION OF
THE LAWS, DUE PROCESS OF LAW AND THE CONSTITUTIONAL RIGHTS OF AN ACCUSED TO BE
INFORMED OF THE NATURE AND CAUSE OF THE ACCUSATION AGAINST HIM.3

And culled from petitioners' arguments in support of the above grounds the provisions of Republic Act
No. 8180 which they now impugn are:

A. Section 5(b) on the imposition of tariff which provides: "Any law to the contrary notwithstanding
and starting with the effectivity of this Act, tariff duty shall be imposed and collected on imported crude
oil at the rate of three percent (3%), and imported refined petroleum products at the rate of seven
percent (7%), except fuel oil and LPB, the rate for which shall be the same as that for imported crude oil:
Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum
products shall be the same: Provided further, That this provision may be amended only by an Act of
Congress." [Emphasis added].

B. Section 6 on the minimum inventory requirement, thus: "Security of Supply. To ensure the
security and continuity of petroleum crude and products supply, the DOE shall require the refiners and
importers to maintain a minimum inventory equivalent to ten percent (10%) of their respective annual
sales volume or forty (40) days of supply, whichever is lower."

C. Section 9(b) on predatory pricing: "Predatory pricing which means selling or offering to sell any
product at a price unreasonably below the industry average cost so as to attract customers to the
detriment of competitors.

Any person, including but not limited to the chief operating officer or chief executive officer of the
corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of
imprisonment for three (3) years and fine ranging from Five hundred thousand pesos (P500,000) to One
million pesos (P1,000,000).

D. Section 10 on the other prohibited acts which states: "Other Prohibited Acts. To ensure
compliance with the provisions of this Act, the failure to comply with any of the following shall likewise
be prohibited: 1) submission of any reportorial requirements; 2) maintenance of the minimum
inventory; and, 3) use of clean and safe (environment and worker-benign) technologies.

Any person, including but not limited to the chief operating officer or chief executive officer of the
corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of
imprisonment for two (2) years and fine ranging from Two hundred fifty thousand pesos (P250,000) to
Five hundred thousand pesos (P500,000).

E. Section 15 on the implementation of full deregulation, thus: "Implementation of Full


Deregulation. Pursuant to Section 5(e) of Republic Act No. 7683, the DOE shall, upon approval of the
President, implement the full deregulation of the downstream oil industry not later than March, 1997.
As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate of the peso in relation to the US
dollar is stable. Upon the implementation of the full deregulation as provided herein, the transition
phase is deemed terminated and the following laws are deemed repealed: . . . [Emphasis added].

F. Section 20 on the imposition of administrative fine: "Administrative Fine. The DOE may, after
due notice and hearing impose a fine in the amount of not less than One hundred thousand pesos
(P100,000) but not more than One million pesos (P1,000,000) upon any person or entity who violates
any of its reportorial and minimum inventory requirements, without prejudice to criminal sanctions."

Executive Order No. 392, entitled "Declaring Full Deregulation Of The Downstream Oil Industry" which
declared the full deregulation effective February 8, 1997, is also sought to be declared unconstitutional.

A careful scrutiny of the arguments proffered against the constitutionality of Republic Act No. 8180
betrays the petitioners' underlying motive of calling upon this Court to determine the wisdom and
efficacy of the enactment rather than its adherence to the Constitution. Nevertheless, I shall address the
issues raised if only to settle the alleged constitutional defects afflicting some provisions of Republic Act
No. 8180. To elaborate:

A. On the imposition of tariff . Petitioners argue that the existence of a tariff provision violated the
"one subject-one title"4 rule under Article VI, Section 26 (1) as the imposition of tariff rates is
"inconsistent with"5 and not at all germane to the deregulation of the oil industry. They also stress that
the variance between the seven percent (7%) duty on imported gasoline and other refined petroleum
products and three percent (3%) duty on crude oil gives a "4% tariff protection in favor of Petron, Shell
and Caltex which own and operate refineries here".6 The provision, petitioners insist, "inhibits
prospective oil players to do business here because it will unnecessarily increase their product cost by
4%."7 In other words, the tariff rates "does not foster 'a truly competitive market'."8 Also petitioners
claim that both Houses of Congress never envisioned imposing the seven percent (7%) and three
percent (3%) tariff on refined and crude oil products as both Houses advocated, prior to the holding of
the bicameral conference committee, a "zero differential". Moreover, petitioners insist that the tariff
rates violate "the equal protection of the laws enshrined in Article III, Section 1 of the Constitution"9
since the rates and their classification are not relevant in attaining the avowed policy of the law, not
based on substantial distinctions and limited to the existing condition.
The Constitution mandates that "every bill passed by Congress shall embrace only one subject which
shall be expressed in the title thereof".10 The object sought to be accomplished by this mandatory
requirement has been explained by the Court in the vintage case of Central Capiz v. Ramirez,11 thus:

The object sought to be accomplished and the mischief proposed to be remedied by this provision are
well known. Legislative assemblies, for the dispatch of business, often pass bills by their titles only
without requiring them to be read. A specious title sometimes covers legislation which, if its real
character had been disclosed, would not have commanded assent. To prevent surprise and fraud on the
legislature is one of the purposes this provision was intended to accomplish. Before the adoption of this
provision the title of a statute was often no indication of its subject or contents.

An evil this constitutional requirement was intended to correct was the blending in one and the same
statute of such things as were diverse in their nature, and were connected only to combine in favor of all
the advocates of each, thus often securing the passage of several measures no one of which could have
succeeded on its own merits. Mr. Cooley thus sums up in his review of the authorities defining the
objects of this provision: "It may therefore be assumed as settled that the purpose of this provision was:
First, to prevent hodge-podge or log-rolling legislation; second, to prevent surprise or fraud upon the
legislature by means of provisions in bills of which the titles gave no information, and which might
therefore be overlooked and carelessly and unintentionally adopted; and, third, to fairly apprise the
people, through such publication of legislative proceedings as is usually made, of the subjects of
legislation that are being considered, in order that they may have opportunity of being heard thereon by
petition or otherwise if they shall so desire." (Cooley's Constitutional Limitations, p. 143).12

The interpretation of "one subject-one title" rule, however, is never intended to impede or stifle
legislation. The requirement is to be given a practical rather than a technical construction and it would
be sufficient compliance if the title expresses the general subject and all the provisions of the enactment
are germane and material to the general subject.13 Congress is not required to employ in the title of an
enactment, language of such precision as to mirror, fully index or catalogue all the contents and the
minute details therein.14 All that is required is that the title should not cover legislation incongruous in
itself, and which by no fair intendment can be considered as having a necessary or proper connection.15
Hence, the title "An Act Amending Certain Sections of Republic Act Numbered One Thousand One
Hundred Ninety-Nine, otherwise known as the Agricultural Tenancy Act of the Philippines" was declared
by the Court sufficient to contain a provision empowering the Secretary of Justice, acting through a
tenancy mediation division, to carry out a national enforcement program, including the mediation of
tenancy disputes.16 The title "An Act Creating the Videogram Regulatory Board" was similarly declared
valid and sufficient to embrace a regulatory tax provision, i.e., the imposition of a thirty percent (30%)
tax on the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a
videogram containing a reproduction of any motion picture or audiovisual program with fifty percent
(50%) of the proceeds of the tax collected accruing to the province and the other fifty percent (50%) to
the municipality where the tax is collected.17 Likewise, the title "An Act To Further Amend
Commonwealth Act Numbered One Hundred Twenty, as amended by Republic Act Numbered Twenty
Six Hundred and Forty One" was declared sufficient to cover a provision limiting the allowable margin of
profit to not more than twelve percent (12%) annually of its investments plus two-month operating
expenses for franchise holder receiving at least fifty percent (50%) of its power from the National Power
Corporation.18

In the case at bar, the title "An Act Deregulating The Downstream Oil Industry, And For Other
Purposes" is adequate and comprehensive to cover the imposition of tariff rates. The tariff provision
under Section 5 (b) is one of the means of effecting deregulation. It must be observed that even prior to
the passage of Republic Act No. 8180 oil products have always been subject to tariff and surely Congress
is cognizant of such fact. The imposition of the seven percent (7%) and three percent (3%) duties on
imported gasoline and refined petroleum products and on crude oil, respectively, are germane to the
deregulation of the oil industry. The title, in fact, even included the broad and all-encompassing phrase
"And For Other Purposes" thereby indicating the legislative intent to cover anything that has some
relation to or connection with the deregulation of the oil industry. The tax provision is a mere tool and
mechanism considered essential by Congress to fulfill Republic Act No. 8180's objective of fostering a
competitive market and achieving the social policy objectives of a fair prices. To curtail any adverse
impact which the tariff treatment may cause by its application, and perhaps in answer to petitioners'
apprehension Congress included under the assailed section a proviso that will effectively eradicate the
tariff difference in the treatment of refined petroleum products and crude oil by stipulating "that
beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall
be the same."

The contention that tariff "does not foster a truly competitive market"19 and therefore restrains trade
and does not help achieve the purpose of deregulation is an issue not within the power of the Court to
resolve. Nonetheless, the Court's pronouncement in Tio vs. Videogram Regulatory Board appears to be
worth reiterating:

Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive,
confiscatory, and in restraint of trade. However, it is beyond serious question that a tax does not cease
to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The
power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely
venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of
the authority which exercise it. In imposing a tax, the legislature acts upon its constituents. This is, in
general, a sufficient security against erroneous and oppressive taxation.20 [Emphasis added]
Anent petitioners' claim that both House Bill No. 5264 and Senate Bill No. 1253, [the precursor bills of
Republic Act No. 8180], "did not impose any tariff rates but merely set the policy of 'zero differential' in
the House version, and nothing in the Senate version"21 is inconsequential. Suffice it to state that the
bicameral conference committee report was approved by the conferees thereof only "after full and free
conference" on the disagreeing provisions of Senate Bill No. 1253 and House Bill No. 5264. Indeed, the
"zero differential" on the tariff rates imposed in the House version was embodied in the law, save for a
slight delay in its implementation to January 1, 2004. Moreover, any objection on the validity of
provisions inserted by the legislative bicameral conference committee has

been passed upon by the Court in the recent case of Tolentino v. Secretary of Finance,22 which, in my
view, laid to rest any doubt as to the validity of the bill emerging out of a Conference Committee. The
Court in that case, speaking through Mr. Justice Mendoza, said:

As to the possibility of an entirely new bill emerging out of a Conference Committee, it has been
explained:

Under congressional rules of procedure, conference committees are not expected to make any
material change in the measure at issue, either by deleting provisions to which both houses have
already agreed or by inserting new provisions. But this is a difficult provision to enforce. Note the
problem when one house amends a proposal originating in either house by striking out everything
following the enacting clause and substituting provisions which make it an entirely new bill. The versions
are now altogether different, permitting a conference committee to draft essentially a new bill. . .

The result is a third version, which is considered an "amendment in the nature of a substitute," the
only requirement for which being that the third version be germane to the subject of the House and
Senate bills:

Indeed, this Court recently held that it is within the power of a conference committee to include in its
report an entirely new provision that is not found either in the House bill or in the Senate bill. If the
committee can propose an amendment consisting of one or two provisions, there is no reason why it
cannot propose several provisions, collectively considered as an "amendment in the nature of a
substitute," so long as such amendment is germane to the subject of the bills before the committee.
After all, its report was not final but needed the approval of both houses of Congress to become valid as
an act of the legislative department. The charge that in this case the Conference Committee acted as a
third legislative chamber is thus without any basis.
xxx xxx xxx

To be sure, nothing in the Rules [of the Senate and the House of Representatives] limits a conference
committee to a consideration of conflicting provisions. But Rule XLVI, (Sec.) 112 of the Rules of the
Senate is cited to the effect that "If there is no Rule applicable to a specific case the precedents of the
Legislative Department of the Philippines shall be resorted to, and as a supplement of these, the Rules
contained in Jefferson's Manual." The following is then quoted from the Jefferson's Manual:

The managers of a conference must confine themselves to the differences committed to them . . . and
may not include subjects not within disagreements, even though germane to a question in issue.

Note that, according to Rule XLIX, (Sec.) 112, in case there is no specific rule applicable, resort must be
to the legislative practice. The Jefferson's Manual is resorted to only as supplement. It is common place
in Congress that conference committee reports include new matters which, though germane, have not
been committed to the committee. This practice was admitted by Senator Raul S. Roco, petitioner in
G.R. No. 115543, during the oral argument in these cases. Whatever, then, may be provided in the
Jefferson's Manual must be considered to have been modified by the legislative practice. If a change is
desired in the practice it must be sought in Congress since this question is not covered by any
constitutional provision but is only an internal rule of each house. Thus, Art. VI, (Sec.) 16(3) of the
Constitution provides that "Each House may determine the rules of its proceedings . . ."

This observation applies to the other contention that the Rules of the two chambers were likewise
disregarded in the preparation of the Conference Committee Report because the Report did not contain
a "detailed and sufficiently explicit statement of changes in, or amendments to, the subject measure."
The Report used brackets and capital letters to indicate the changes. This is a standard practice in bill-
drafting. We cannot say that in using these marks and symbols the Committee violated the Rules of the
Senate and the House. Moreover, this Court is not the proper forum for the enforcement of these
internal Rules. To the contrary, as we have already ruled, "parliamentary rules are merely procedural
and with their observance the courts have no concern." Our concern is with the procedural
requirements of the Constitution for the enactment of laws. As far as these requirements are
concerned, we are satisfied that they have been faithfully observed in these cases.23
The other contention of petitioners that Section 5(b) "violates the equal protection of the laws
enshrined in Article III, Section 1 of the Constitution"24 deserves a short shrift for the equal protection
clause does not forbid reasonable classification based upon substantial distinctions where the
classification is germane to the purpose of the law and applies equally to all the members of the class.
The imposition of three percent (3%) tariff on crude oil, which is four percent (4%) lower than those
imposed on refined oil products, as persuasively argued by the Office of the Solicitor General, is based
on the substantial distinction that importers of crude oil, by necessity, have to establish and maintain
refinery plants to process and refine the crude oil thereby adding to their production costs. To
encourage these importers to set up refineries involving huge expenditures and investments which
peddlers and importers of refined petroleum products do not shoulder, Congress deemed it appropriate
to give a lower tariff rate to foster the entry of new "players" and investors in line with the law's policy
to create a competitive market. The residual contention that there is no substantial distinction in the
imposition of seven percent (7%) and three percent (3%) tariff since the law itself will level the tariff
rates between the imported crude oil and refined petroleum products come January 1, 2004, to my
mind, is addressed more to the legislative's prerogative to provide for the duration and period of
effectivity of the imposition. If Congress, after consultation, analysis of material data and due
deliberations, is convinced that by January 1, 2004, the investors and importers of crude oil would have
already recovered their huge investments and expenditures in establishing refineries and plants then it
is within its prerogative to lift the tariff differential. Such matter is well within the pale of legislative
power which the Court may not fetter. Besides, this again is in line with Republic Act No. 8180's avowed
policy to foster a truly competitive market which can achieve the social policy objectives of fair, if not
lower, prices.

B. On the minimum inventory requirement. Petitioners' attack on Section 6 is premised upon their
belief that the inventory requirement is hostile and not conducive for new oil companies to operate
here, and unduly favors Petron, Shell and Caltex, companies which according to them can easily hurdle
the requirement. I fail to see any legal or constitutional issue here more so as it is not raised by a party
with legal standing for petitioners do not claim to be the owners or operators of new oil companies
affected by the requirement. Whether or not the requirement is advantageous, disadvantageous or
conducive for new oil companies hinges on presumptions and speculations which is not within the realm
of judicial adjudication. It may not be amiss to mention here that according to the Office of the Solicitor
General "there are about thirty (30) new entrants in the downstream activities . . . , fourteen (14) of
which have started operation . . . , eight (8) having commenced operation last March 1997, and the rest
to operate between the second quarter of 1997 and the year 2000"25. Petitioners did not controvert
this averment which thereby cast serious doubt over their claim of "hostile" environment.

C. On predatory pricing. What petitioners bewail the most in Section 9(b) is "the definition of
'predatory pricing' [which] is too broad in scope and indefinite in meaning"26 and the penal sanction
imposed for its violation. Petitioners maintain that it would be the new oil companies or "players" which
would lower their prices to gain a foothold on the market and not Petron, Shell or Caltex, an occasion
for these three big oil "companies" to control the prices by keeping their average cost at a level which
will ensure their desired profit margin.27 Worse, the penal sanction, they add, deters new "players"
from entering the oil market and the practice of lowering prices is now condemned as a criminal act.

Petitioners' contentions are nebulous if not speculative. In the absence of any concrete proof or
evidence, the assertion that it will only be the new oil companies which will lower oil prices remains a
mere guess or suspicion. And then again petitioners are not the proper party to raise the issue. The
query on why lowering of prices should be penalized and the broad scope of predatory pricing is not for
this Court to traverse the same being reserved for Congress. The Court should not lose sight of the fact
that its duty under Article 5 of the Revised Penal Code is not to determine, define and legislate what act
or acts should be penalized, but simply to report to the Chief Executive the reasons why it believes an
act should be penalized, as well as why it considers a penalty excessive, thus:

Art. 5. Duty of the court in connection with acts which should be repressed but which are nor covered
by the law, and in cases of excessive penalties. Whenever a court has knowledge of any act which it
may deem proper to repress and which is not punishable by law, it shall render the proper decision, and
shall report to the Chief Executive, through the Department of Justice, the reasons which induce the
court to believe that said act should be made the subject of legislation.

In the same way the court shall submit to the Chief Executive, through the Department of Justice,
such statement as may be deemed proper, without suspending the execution of the sentence, when a
strict enforcement of the provisions of this Code would result in the imposition of a clearly excessive
penalty, taking into consideration the degree of malice and the injury caused by the offense.

Furthermore, in the absence of an actual conviction for violation of Section 9 (b) and the appropriate
appeal to this Court, I fail to see the need to discuss any longer the issue as it is not ripe for judicial
adjudication. Any pronouncement on the legality of the sanction will only be advisory.

D. On other prohibited acts. In discussing their objection to Section 10, together with Section 20,
petitioners assert that these sanctions "even provide stiff criminal and administrative penalties for
failure to maintain said minimum requirement and other regulations" and posed this query: "Are these
provisions consistent with the policy objective to level the playing [field] in a truly competitive
answer?"28 A more circumspect analysis of petitioners' grievance, however, does not present any legal
controversy. At best, their objection deals on policy considerations that can be more appropriately and
effectively addressed not by this Court but by Congress itself.

E. On the implementation of full deregulation under Section 15, and the validity of Executive Order
No. 392. Petitioners stress that "Section 15 of Republic Act No. 8180 delegates to the Secretary of
Energy and to the President of the Philippines the power to determine when to fully deregulate the
downstream oil industry"29 without providing for any standards "to determine when the prices of crude
oil in the world market are considered to be

'declining'"30 and when may the exchange rate be considered "stable" for purposes of determining
when it is "practicable" to declare full deregulation.31 In the absence of standards, Executive Order No.
392 which implemented Section 15 constitute "executive lawmaking,"32 hence the same should likewise
be struck down as invalid. Petitioners additionally decry the brief seven (7) month transition period
under Section 15 of Republic Act No. 8180. The premature full deregulation declared in Executive Order
No. 392 allowed Caltex, Petron, and Shell oil companies "to define the conditions under which any 'new
players' will have to adhere to in order to become competitive in the new deregulated market even
before such a market has been created."33 Petitioners are emphatic that Section 15 and Executive
Order No. 392 "have effectively legislated a cartel among respondent oil companies, directly violating
the Constitutional prohibition against unfair trade practices and combinations in restraint of trade".34

Section 15 of Republic Act No. 8180 provides for the implementation of full deregulation. It states:

Section 15 on the implementation of full deregulation, thus: "Implementation of Full Deregulation.


Pursuant to Section 5(e) of Republic Act No. 7683, the DOE shall, upon approval of the President,
implement the full deregulation of the downstream oil industry not later than March, 1997. As far as
practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate of the peso in relation to the US
dollar is stable. Upon the implementation of the full deregulation as provided herein, the transition
phase is deemed terminated and the following laws are deemed repealed: . . . [Emphasis added].

It appears from the foregoing that deregulation has to be implemented "not later than March 1997."
The provision is unequivocal, i.e., deregulation must be implemented on or before March 1997. The
Secretary of Energy and the President is devoid of any discretion to move the date of full deregulation to
any day later than March 1997. The second sentence which provides that "[a]s far as practicable, the
DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the US dollar is stable" did
not modify or reset to any other date the full deregulation of downstream oil industry. Not later than
March 1997 is a complete and definite period for full deregulation. What is conferred to the Department
of Energy in the implementation of full deregulation, with the approval of the President, is not the
power and discretion on what the law should be. The provision of Section 15 gave the President the
authority to proceed with deregulation on or before, but not after, March 1997, and if implementation
is made before March, 1997, to execute the same, if possible, when the prices of crude oil and
petroleum products in the world market are declining and the peso-dollar exchange rate is stable. But if
the implementation is made on March, 1997, the President has no option but to implement the law
regardless of the conditions of the prices of oil in the world market and the exchange rates.

The settled rule is that the legislative department may not delegate its power. Any attempt to
abdicate it is unconstitutional and void, based on the principle of potestas delegata non delegare potest.
In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to
inquire whether the statute was complete in all its terms and provisions when it left the hands of the
legislative so that nothing was left to the judgment of any other appointee or delegate of the
legislature.35 An enactment is said to be incomplete and invalid if it does not lay down any rule or
definite standard by which the administrative officer may be guided in the exercise of the discretionary
powers delegated to it.36 In People v. Vera,37 the Court laid down a guideline on how to distinguish
which power may or may not be delegated by Congress, to wit:

"The true distinction", says Judge Ranney, "is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as
to its execution, to be exercised under and in pursuance of the law. The first cannot done; to the latter
no valid objection can be made." (Cincinnati, W. & Z.R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St.,
77, 88 See also, Sutherland on Statutory Construction, sec. 68.)

Applying these parameters, I fail to see any taint of unconstitutionality that could vitiate the validity of
Section 15. The discretion to ascertain when may the prices of crude oil in the world market be deemed
"declining" or when may the peso-dollar exchange rate be considered "stable" relates to the assessment
and appreciation of facts. There is nothing essentially legislative in ascertaining the existence of facts or
conditions as the basis of the taking into effect of a

law38 so as to make the provision an undue delegation of legislative power. The alleged lack of
definitions of the terms employed in the statute does not give rise to undue delegation either for the
words of the statute, as a rule, must be given its literal meaning.39 Petitioners' contentions are
concerned with the details of execution by the executive officials tasked to implement deregulation. No
proviso in Section 15 may be construed as objectionable for the legislature has the latitude to provide
that a law may take effect upon the happening of future specified contingencies leaving to some other
person or body the power to determine when the specified contingency has arisen.40 The instant
petition is similarly situated with the past cases, as summarized in the case of People v. Vera, where the
Court ruled for the validity of several assailed statutes, to wit:

To the same effect are decisions of this court in Municipality of Cardona vs. Municipality of
Binangonan ([1917], 36 Phil. 547); Rubi vs. Provincial Board of Mindoro ([1919], 39 Phil. 660), and Cruz
vs. Youngberg ([1931], 56 Phil. 234). In the first of these cases, this court sustained the validity of a law
conferring upon the Governor-General authority to adjust provincial and municipal boundaries. In the
second case, this court held it lawful for the legislature to direct non-Christian inhabitants to take up
their habitation on unoccupied lands to be selected by the provincial governor and approved by the
provincial board. In the third case, it was held proper for the legislature to vest in the Governor-General
authority to suspend or not, at his discretion, the prohibition of the importation of foreign cattle, such
prohibition to be raised "if the conditions of the country make this advisable or if disease among foreign
cattle has ceased to be a menace to the agriculture and livestock of the lands."41

If the Governor-General in the case of Cruz v. Youngberg42 can "suspend or not, at his discretion, the
prohibition of the importation of cattle, such prohibition to be raised 'if the conditions of the country
make this advisable or if disease among foreign cattles has ceased to be a menace to the agriculture and
livestock of the lands" then with more reason that Section 15 of Republic Act No. 8180 can pass the
constitutional challenge as it has mandatorily fixed the effectivity date of full deregulation to not later
than March 1997, with or without the occurrence of stable peso-dollar exchange rate and declining oil
prices. Contrary to petitioners' protestations, therefore, Section 15 is complete and contains the basic
conditions and terms for its execution.

To restate, the policy of Republic Act No. 8180 is to deregulate the downstream oil industry and to
foster a truly competitive market which could lead to fair prices and adequate supply of environmentally
clean and high-quality petroleum products. This is the guiding principle installed by Congress upon
which the executive department of the government must conform. Section 15 of Republic Act No. 8180
sufficiently supplied the metes and bounds for the execution of full deregulation. In fact, a cursory
reading of Executive Order No. 39243 which advanced deregulation to February 8, 1997 convincingly
shows the determinable factors or standards, enumerated under Section 15, which were taken into
account by the Chief Executive in declaring full deregulation. I cannot see my way clear on how or why
Executive Order No. 392, as professed by petitioners, may be declared unconstitutional for adding the
"depletion of buffer fund" as one of the grounds for advancing the deregulation. The enumeration of
factors to be considered for full deregulation under Section 15 did not proscribe the Chief Executive
from acknowledging other instances that can equally assuage deregulation. What is important is that
the Chief Executive complied with and met the minimum standards supplied by the law. Executive Order
No. 392 may not, therefore, be branded as unconstitutional.
Petitioners' vehement objections on the short seven (7) month transition period under Section 15 and
the alleged resultant de facto formation of cartel are matters which fundamentally strike at the wisdom
of the law and the policy adopted by Congress. These are outside the power of the courts to settle; thus
I fail to see the need to digress any further.

F . On the imposition of administrative fine. The administrative fine under Section 20 is claimed to
be inconsistent with deregulation. The imposition of administrative fine for failure to meet the
reportorial and minimum inventory requirements, far from petitioners' submission, are geared towards
accomplishing the noble purpose of the law. The inventory requirement ensures the security and
continuity of petroleum crude and products supply,44 while the reportorial requirement is a mere
devise for the Department of Energy to monitor compliance with the law. In any event, the issue
pertains to the efficacy of incorporating in the law the administrative sanctions which lies outside the
Court's sphere and competence.

In fine, it seems to me that the petitions dwell on the insistent and recurrent arguments that the
imposition of different tariff rates on imported crude oil and imported petroleum products is violative of
the equal protection clause of the constitution; is not germane to the purpose of the law; does not
foster a truly competitive market; extends undue advantage to the existing oil refineries or companies;
and creates a cartel or a monopoly of sort among Shell, Caltex and Petron in clear contravention of the
Constitutional proscription against unfair trade practices and combinations in restraint of trade.
Unfortunately, this Court, in my view, is not at liberty to tread upon or even begin to discuss the merits
and demerits of petitioners' stance if it is to be faithful to the time honored doctrine of separation of
powers the underlying principle of our republican state.45 Nothing is so fundamental in our system of
government than its division into three distinct and independent branches, the executive, the legislative
and the judiciary, each branch having exclusive cognizance of matters within its jurisdiction, and
supreme within its own sphere. It is true that there is sometimes an inevitable overlapping and
interlacing of functions and duties between these departments. But this elementary tenet remains: the
legislative is vested with the power to make law, the judiciary to apply and interpret it. In cases like this,
"the judicial branch of the government has only one duty-to lay the article of the Constitution which is
invoked beside the statute which is challenged and to decide whether the letter squares with the
former."46 This having been done and finding no constitutional infirmity therein, the Court's task is
finished. Now whether or not the law fails to achieve its avowed policy because Congress did not
carefully evaluate the long term effects of some of its provisions is a matter clearly beyond this Court's
domain.
Perhaps it bears reiterating that the question of validity of every statute is first determined by the
legislative department of the government, and the courts will resolve every presumption in favor of its
validity. The courts will assume that the validity of the statute was fully considered by the legislature
when adopted. The wisdom or advisability of a particular statute is not a question for the courts to
determine. If a particular statute is within the constitutional power of the legislature to enact, it should
be sustained whether the courts agree or not in the wisdom of its enactment.47 This Court continues to
recognize that in the determination of actual cases and controversies, it must reflect the wisdom and
justice of the people as expressed through their representatives in the executive and legislative
branches of government. Thus, the presumption is always in favor of constitutionality for it is likewise
always presumed that in the enactment of a law or the adoption of a policy it is the people who speak
through their representatives. This principle is one of caution and circumspection in the exercise of the
grave and delicate function of judicial review48. Explaining this principle Thayer said,

It can only disregard the Act when those who have the right to make laws have not merely made a
mistake, but have made a very clear one-so clear that it is not open to rational question. That is the
standard of duty to which the courts bring legislative acts; that is the test which they apply-not merely
their own judgment as to constitutionality, but their conclusion as to what judgment is permissible to
another department which the constitution has charged with the duty of making it. This rule recognizes
that, having to the great, complex, ever-unfolding exigencies of regard government, much will seem
unconstitutional to one man, or body of men, may reasonably not seem so to another; that the
constitution often admits of different interpretations; that there is often a range of choice and
judgment; that in such cases the constitution does not impose upon the legislature any one specific
opinion, but leaves open their range of choice; and that whatever choice is rational is constitutional.49

The petitions discuss rather extensively the adverse economic implications of Republic Act No. 8180.
They put forward more than anything else, an assertion that an error of policy has been committed.
Reviewing the wisdom of the policies adopted by the executive and legislative departments is not within
the province of the Court.

It is safe to assume that the legislative branch of the government has taken into consideration and has
carefully weighed all points pertinent to the law in question. We cannot doubt that these matters have
been the object of intensive research and study nor that they have been subject of comprehensive
consultations with experts and debates in both houses of Congress. Judicial review at this juncture will
at best be limited and myopic. For admittedly, this Court cannot ponder on the points raised in the
petitions with the same technical competence as that of the economic experts who have contributed
valuable hours of study and deliberation in the passage of this law.
I realize that to invoke the doctrine of separation of powers at this crucial time may be viewed by
some as an act of shirking from our duty to uphold the Constitution at all cost. Let it be remembered,
however, that the doctrine of separation of powers is likewise enshrined in our Constitution and
deserves the same degree of fealty. In fact, it carries more significance now in the face of an onslaught
of similar cases brought before this Court by the opponents of almost every enacted law of major
importance. It is true that this Court is the last bulwark of justice and it is our task to preserve the
integrity of our fundamental law. But we cannot become, wittingly or unwittingly, instruments of every
aggrieved minority and losing legislator. While the laudable objectives of the law are put on hold, this
Court is faced with the unnecessary burden of disposing of issues merely contrived to fall within the
ambit of judicial review. All that is achieved is delay which is perhaps, sad to say, all that may have been
intended in the first place.

Indeed, whether Republic Act No. 8180 or portions thereof are declared unconstitutional, oil prices
may continue to rise, as they depend not on any law but on the volatile market and economic forces. It
is therefore the political departments of government that should address the issues raised herein for the
discretion to allow a deregulated oil industry and to determine its viability is lodged with the people in
their primary political capacity, which as things stand, has been delegated to Congress.

In the end, petitioners are not devoid of a remedy. To paraphrase the words of Justice Padilla in
Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas v. Tan,50 if petitioners seriously believe that
the adoption and continued application of Republic Act No. 8180 are prejudicial to the general welfare
or the interests of the majority of the people, they should seek recourse and relief from the political
branches of government, as they are now doing by moving for an amendment of the assailed provisions
in the correct forum which is Congress or for the exercise of the people's power of initiative on
legislation. The Court following the time honored doctrine of separation of powers, cannot substitute its
judgment for that of the Congress as to the wisdom, justice and advisability of Republic Act No. 8180.51

ACCORDINGLY, finding no merit in the instant petitions I vote for their outright dismissal.