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Balbina Mendoza vsPacianoDizon

GR. No L-387

In 1932, Juan Cuevas married Florence Cicadiz (no children were born), but they got
divorced on March 21, 1944. On 1945, Administrative Order 27 was issued by the
President ordering the issuance of bonuses or gratuities to officials and employees of the
National Government who were in service during 1941. Cuevas was entitled to this bonus.
Balbina Mendoza, Cuevas’s mother, claimed the aforementioned bonus to be hers as
the next of kin (Cuevas already died this time). On 1946, Deputy Auditor General by virtue
of Art 262 of the Administrative Code, solved the issue raised against Mendoza, and said
that the bonus shall be conjugal in nature, thus half of it shall belong to the divorced wife
and the other half belongs to Mendoza. The Deputy Auditor General reasoned that the
bonus was in connection to the time served by the Cuevas in the government thus forms
part of the conjugal property as it was earned during the existence of their marriage.
Mendoza now raises this case to this court under Rule 45, claiming that since the AO
27 was issued on 1945, when the marriage was already dissolved, it should not form part of
the conjugal property.

Whether or not the bonus given under AO 27 shall be treated as part of the conjugal
property in relation to the actual years of service of Cuevas.

Held: No.
The AO used the word gratuity and has a known, categorical and conclusive in law
and jurisprudence significance. Gratuity is not to wages or any other emolument, but
means gift and something given and received by lucrative title. In this case more
accentuated the difference between the two concepts considering that Congress, in its Joint
Resolution 5 adopted on 1945 recommended the study of ways and means to pay the back
salaries gratuities, bonuses or other emoluments of the loyal and deserving employees of
the Commonwealth, The fact, therefore that the President Chose the term gratuity, leaving
aside other words indicates that this is a calculated concession, clearly shows, the intention
to strictly limit the scope of the privilege to the letter of the law. Thus, the bonus shall
wholly belong to the mom.

2. Realty Dev. Corp vsSendino 223 SCRA 665


Lucina C. Sendino reserved with Realty Exchange Venture, Inc. (REVI) a 120-square
meter lot in Raymondville Subdivision in Sucat, Paranaque for P307,800.00 as its purchase
price. She paid P1,000.00 as partial reservation fee on January 15, 1989 and completed
payment of this fee on January 20, 1989 by paying P4,000.00.
On July 18, 1989, Lucina paid REVI P16,600.00 as full downpayment on the purchase price.
REVI informed respondent of the cancellation of the contract on the 31st of July 1989, for
alleged non-compliance with the requirement of submission of the appropriate documents
under the terms of the original agreement.

On April 20, 1990, private respondent filed a complaint for Specific Performance against
REVI with the office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and
Land Use Regulatory Board (HLURB)

On April 3, 1991 the HLURB, whose authority to hear and decide the complaint was
challenged by REVI in its answer, rendered its judgment in favor of Lucina and ordered
petitioners to continue with the sale of the house and lot and to pay private respondent
P5,000 as moral damages, P5,000 as exemplary damages and P6,000 as attorney's fees and
costs of the suit. An appeal from this decision was taken to the HLURB OAALA Arbiter, which
affirmed the Board's decision. The decision of the OAALA Arbiter was appealed to the Office
of the President, which dismissed it. MR was denied on January 26, 1993.


1. W/N the HLURB has quasi-judicial functions, notwithstanding absence of express

grant by executive order no. 90 of December 17, 1986 which created it
2. The board of commissioners is allowed to sit in a decision to render judgment and to
delegate its quasi-judicial authority to a subordinate office.

1. Yes. Executive Order No. 90, series of 1986, recognized the Human Settlements
Regulatory Commission (renamed the HLURB) as one of the principal housing
agencies of the government. Prior to this, Executive Order No. 648 in 1981 transferred
all the functions of the National Housing Authority to the Human Settlements
Regulatory Commission (HSRC) consolidating all regulatory functions relating to land
use and housing development in a single entity. Being the sole regulatory body for
housing and land development, the HLURB, would have been reduced to a
functionally sterile entity if, it lacked the powers exercised by its predecessor which
included the power to settle disputes concerning land use and housing development
and acquisition.
Obviously, the HLURB must interpret and apply contracts, determine the rights of the
parties under these contracts, and award damages whenever appropriate. We fail to
see how the HSRC — which possessed jurisdiction over the actions for specific
performance for contractual and statutory obligations filed by buyers of subdivision
lots against developers — had suddenly lots its adjudicatory powers by the mere fiat
of a change in name through E.O. 90.
2. Under Section 5 of E.O. 648 which defines the powers and duties of the Commission,
the Board is specifically mandated to "(a)dopt rules of procedure for the conduct of
its business" and perform such functions necessary for the effective accomplishment
of (its) above mentioned functions."
Since nothing in the provisions of either E.O. 90 or E.O. 648 denies or withholds the
power or authority to delegate adjudicatory functions to a division, the Board, for the
purpose of effectively carrying out its administrative responsibilities and quasi-
judicial powers as a regulatory body should not be denied the power, as a matter of
practical administrative procedure, to constitute its adjudicatory boards into various
divisions. After all, the power conferred upon an administrative agency to issue rules
and regulations necessary to carry out its functions has been held "to be an adequate
source of authority to delegate a particular function, unless by express provision of
the Act or by implication it has been withheld."

3. Cebu United Enterprises v. Jose Gallofin[Collector of Customs]

106 Phil 491 Nov. 18, 1959

FACTS: Cebu United [Cebu] filed a suit for mandatory injunction against Gallofin, to compel
him to release and deliver to Cebu two imported shipments of over issue newspapers
purchased from US. The importation of the aforesaid shipments was made under and by
virtue of an Import Control Commission License No. 1225, issued by the defunct Import
Control Commission[ICC]. Under the terms of the license, the plaintiff could import over
issue newspapers up to the amount/value of $118k on a no-dollar remittance basis. The
license was to expire on Dec. 18, 1953.

Gallofin refused to deliver the imported shipments on the ground that the bills of lading
covering the shipments was dated on Dec. 17, 1953 [LA, USA]. However, the vessels M/S
Ventura and M/S Bataan, which carried the shipments, left the ports of LA, and San
Francisco on Jan. 12 and Jan. 16, 1954, respectively. Therefore, the importation was
deemed to have been made without a valid import license because the Central Bank and the
Monetary Board required that “all shipments that left the port of origin after June 30, 1953,
and are covered by ICC licenses, may be released by the Bureau of Customs without the
need of a Central Bank release certificate; provided they left the port of origin within
the period of validity of the licenses". Since Cebu did not present a Central Bank
certificate for the release of the goods, Gallofin refused to make the delivery.

Lower court: The valid period of the license should be based on the date stated on the bills
of lading [Dec. 17]. Gallofin must deliver.

Gallofin appealed to CA.

The import license was issued on June 18, 1953 and was valid for 6 months.

ISSUE: WON the duly executed acts of the ICC still has valid effects even beyond its life span
as a government agency.
HELD: Yes. What must be considered is the legal connotation of the word “shipped” as used
in the license. Gallofin maintains that a cargo is shipped when the vessel leaves the port of
embarkation, Cebu holds that it is the date on the bills of lading, w/c are usually issued
after the cargo is placed on board the vessel.

The issuance of the bills of lading carries the presumption that the goods were delivered to
the carrier for immediate shipment. It does not appear here that the bill of lading specified
any designated day on which the vessel was to lift anchor, nor was it shown that plaintiff
had any knowledge that the vessel M/S VENTURA and M/S BATAAN were not to depart
soon after he placed his cargo on board and the corresponding bills of lading issued to him.
From this latter time, the goods in contemplation of law, are deemed already in transit.

It should also be considered that it is entirely outside the shipper's hands to fix the dates of
departure, route or arrival of a vessel (unless he charters the whole ship).

Defendant's reliance upon Central Bank regulations that the shipment licensed must have
"left the port of origin within the period of validity of the "license" is not maintainable in
the present case, because the regulations came onto effect only on July 1, 1953 already
after issuance of the appellee' license and cannot be read into the same. [cannot be
applied retroactively]

Appeal dismissed.


MP: Creation, Reorganization, and Abolition of Administrative Agencies

FACTS: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce
(PCC), two administrative cases were filed against petitioner, petitioner was preventively
suspended from office pursuant to R.A. No. 3019.

On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos,
UNIVERSITY. On April 3, 1979, Mateo was appointed Acting President and on March 28,
1980, as President for a term of six (6)years.

On July 11, 1980, the court acquitted petitioner of the charges against him, said accused
was ordered reinstated.

On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as
acting president of the PUP. Dr. Gellor did not vacate the office. This led to a contempt
citation against Dr. Gellor. Petitioner assumed the office of president of the PUP.
On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and
prohibition, assailing the orders and the writs of execution issued by the trial court. Hence
this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the
PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose
its existence, it would have specified that the PCC was being "abolished" rather than
"converted" and that if the PUP was intended to be a new institution, the law would
have said it was being "created." Petitioner claims that the PUP is merely a
continuation of the existence of the PCC, and, hence, he could be reinstated to his
former position as president.

ISSUE: Whether or not the conversion of the PCC into PUP abolished the PCC


No. But reinstatement is no longer possible because of the promulgation of P.D. No.
1437. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of
Commerce. When the purpose is to abolish a department or an office or an organization and
to replace it with another one, the lawmaking authority must says so. What took place was a
change in academic status of the educational institution, not in its corporate life. Hence the
change in its name, the expansion of its curricular offerings, and the changes in its structure
and organization.

As petitioner correctly points out, when the purpose is to abolish a department or an office
or an organization and to replace it with another one, the lawmaking authority says so.

But the reinstatement of petitioner to the position of president of the PUP could not
be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been
promulgated fixing the term of office of presidents of state universities and colleges
at six (6) years, renewable for another term of six (6) years, and authorizing the
President of the Philippines to terminate the terms of incumbents who were not

In this case, Dr. Pablo T. Mateo, Jr., who had been acting president of the university since April
3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with
the result that petitioner’s term was cut short.

5. Dario v. Mizon


In January 1987, Corazon Aquino promulgated EO 127, "REORGANIZING THE MINISTRY OF

FINANCE". Among other offices, Executive Order No. 127 provided for the reorganization of the
Bureau of Customs and prescribed a new staffing pattern therefor. On January 1988,
incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of
“Guidelines on the Implementation of Reorganization Executive Orders," prescribing
the procedure in personnel placement. It also provided that by February 1988, all employees
covered by EO 127 and the grace period extended to the Bureau of Customs by the President on
reorganization shall be:

a) informed of their re-appointment, or

b) offered another position in the same department or agency, or

c) informed of their termination.

A total of 394 officials and employees of the Bureau of Customs were given individual notices of
separation. They filed appeals with the CSC. CSC promulgated its ruling for
reinstatement of the 279 employees. Mison, filed a motion for reconsideration, which
was denied. Commissioner Mison instituted certiorari proceedings.


WON EO No. 127, which provided for the reorganization of the Bureau of Customs is valid.



There is no question that the administration may validly carry out a government reorganization---
insofar as these cases are concerned, the reorganization of the Bureau of Customs—by mandate
not only of the Provisional Constitution, supra, but also of the various Executive Orders decreed
by the Chief Executive in her capacity as sole law making authority under the 1986-1987
revolutionary government. It should also be noted that under the present Constitution, there is a
recognition, albeit implied, that a government reorganization may be legitimately undertaken,
subject to certain conditions.

The core provision of law involved is Section 16 Article XVIII of the 1987 Constitution.

Section 6. Career civil service employees separated from the service not for cause but as a result
of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization
following the ratification of this Constitution shall be entitled to appropriate separation pay and to
retirement and other benefits accruing to them under the laws of general application in force at
the time of their separation. In lieu thereof, at the option of the employees, they may be considered
for employment in the government or in any of its subdivisions, instrumentalities, or agencies,
including go3ernment-owned or controlled corporations and their subsidiaries. This pro3ision also
applies to career officers whose resignation,tendered in line with the enlisting policy, had been
It is also to be observed that unlike the grants or power to effect reorganizations under the past
Constitutions, the above provision comes as a mere recognition of the right of the government to
reorganize its offices, bureaus, and instrumentalities. Other than references to reorganization
following the ratification of this Constitution, there is no provision or automatic vacancies under
the 1987 Constitution.



A complaint was filed against Ruperto, a government official, charging him with disloyalty to
service, partiality, favoritism, violation of his oath of office, and corruption. A copy of the
complaint was submitted to the Integrity Board. The Board found, after hearing, that the
charges were sufficiently established and concluded that Ruperto made use of his public
office for his personal interests. The Board recommended that Ruperto be given a warning,
and any repetition will have greater consequences. The Integrity Board was created by EO
318 and was succeeded by the Presidential Complaints and Action Commission, which
vested said board with the power to “proceed to a thorough and complete investigation of
any specific case of graft, corruption, dereliction of duty or irregularity in office, and to
submit to the President the record of such investigation together with its finding and


WON the defunct Integrity Board or its successor, Presidential Complaints and Action
Commission, a board exercising judicial functions.



The Investigatory Board’s power is limited to investigating the facts and making
findings in respect thereto. The board neither adjudicates upon nor determines the
rights and interests or duties of parties. After an investigation by the Integrity Board, the
officer that ultimately passes upon and adjudicates the rights of the parties is the President
and not the board, or its successor Presidential Complaints and Action Commission. While it
is true that the board, in performing its duties and exercising its functions may exercise what
is known as judicial discretion since it evaluates the evidence submitted to it on the facts and
circumstances presented, such judicial discretion is only for the purpose of evaluation and
for the determination of disputed facts. Not every function wherein judgment and discretion
are exercised is a judicial function. The test of judicial functions is not the exercise of judicial
discretion, but the power and authority to adjudicate upon the rights and obligations of
parties before it. As the Board lacks the power and authority to adjudicate upon the matters
submitted to it for investigation and make final pronouncement thereon, the second
requisite for availability of the action of certiorari is wanting.

7. People vs. De Vera

65 Phil 56
Doctrine of Non-Delegation of Powers
Delegation to Administrative Agencies

Defendant Mariano Cu Unjieng applied for probation under the provisions of Act No. 4421,
otherwise known as the Probation act . The action for certiorari and prohibition was filed to
prohibit the Court of First Instanced of Manila from taking any further action
in entertaining the aforementioned application for probation on the ground that Act No.
4421 in unconstitutional for being an undue delegation of legislative power. The challenged
provision of the said Act was section 11 thereof which reads: 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 not 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.

Whether or not the provision in question constitute an unconstitutional delegation of
legislative power

Yes. For the purpose of the 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. An examination of 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. 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.
Doctrine of Non-Delegation of Powers: Corollary of separation of powers doctrine. - This rule
followsas a necessary corollary of the doctrine of separation of powers prohibits the delega
tion of legislative power, the vesting of judicial officers with non-judicial functions, as well
as the investing on non- judicial officers with judicial powers. Any attempt at such delegation
is unconstitutional and void.

The distinction is between a delegation of power to make the law, which involves discretion
as to what the law shall be, which delegation is void; and the delegation of authority or
discretion as to the execution of a law to be exercised under, and in pursuance of the law, to
which delegation no objection can be made. The legislature may delegate its authority to
make findings of fact, and the fact-finding power may be conferred for putting into effect,
suspending, or applying the law. But where delegation to a fact-Finding body empowers it to
create the conditions which constitute the fact, the delegation is invalid. The test of
completeness has been said to be whether the provision is sufficiently definite and certain
to enable one to #now his rights and obligations thereunder

8. Maceda v. Macaraig


CA 120 created the NPC as a public corporation to undertake the development of hydraulic
power and the production of power from other sources. RA 358 granted NPC tax and duty
exemption privileges. This was further provided in detail by RA 6395, PD 380, and PD 938.
However, PD 1931 withdrew all tax exemption privileges granted in favor of government-
owned or controlled corporations including their subsidiaries but said law empowered the
President and/or the then Minister of Finance, upon recommendation of the FIRB, to restore,
partially or totally, the exemption withdrawn, or otherwise revise the scope and coverage of
any applicable tax and duty. Pursuant to this, the FIRB issued Resolution No. 10-85 restoring
the tax and duty exemption privileges of NPC.

However, EO 93 once again withdrew all tax and duty incentives granted to government and
private entities which had been restored under PD 1931 and 1955 but it gave the authority
to FIRB to restore, revise the scope and prescribe the date of effectivity of such tax and/or
duty exemptions. So, the FIRB issued Resolution No. 17-87 restoring NPC’s tax and duty
exemption privileges effective March 10, 1987. On October 5, 1987, the President, through
respondent Executive Secretary Macaraig, Jr., confirmed and approved FIRB Resolution No.


The Executive Secretary, by authority of the President, has the power to modify, alter or
reverse the construction of a statute given by a department secretary.

True it is that the then Secretary of Justice in Opinion No. 77 dated August 6, 1977 was of the
view that the powers conferred upon the FIRB by Sections 2(a), (b), (c), and (d) of Executive
Order No. 93 constitute undue delegation of legislative power and is therefore
unconstitutional. However, he was overruled by the respondent Executive Secretary in a
letter to the Secretary of Finance dated March 30, 1989. The Executive Secretary, by
authority of the President, has the power to modify, alter or reverse the construction of a
statute given by a department secretary.

9. Rabor v. CSC
244 SCRA 614
Dionisio M. Rabor is a Utility Worker in the Office of the Mayor, Davao City. He entered
the government service as a Utility Worker on 10 April 1978 at the age of 55 years.
Sometime in May 1991, an official in the Office of the Mayor of Davao City,
advised the petitioner to apply for retirement, considering that he had already
reached the age of 68 years with 13 years and 1 month of government service. Rabor
responded by showing a GSIS certificate with a notation to the effect that his service is
extended for him to complete the 15-years requirement for retirement.
The Davao City Government wrote to the Regional Director of the Civil Service
Commission, Region XI, Davao City informing the latter of the foregoing and requesting
advice as to what action should be taken on Rabor’s case. Director Caward replied
by saying that Rabor’s extension of service is contrary to M.C. No. 65 of the Office of the
President. Hence, it is non-extendible.
Mayor Duterte furnished Rabor a copy of Cawad’s letter and order him not to work
anymore. Rabor asked Director Cawad for extension of his job until he completed the 15-
year requirement under PD 1146. CSC MC. No 27, s. 1990 provides that “any request for
extension of service of compulsory retires to complete the 15-year service requirement for
retirement shall be allowed only to permanent appointees in the career service who are regular
members of the GSIS and shall be granted for a period of not exceeding 1 year.” However, the
request was denied. Rabor then asked OP for an extension. His request was referred
by OP to CSC and thereafter CSC denied Rabor’s request. Rabor asked for
reconsideration of CSC ruling citing Cena case but was denied. Rabor reiterated his request
to Mayor Duterte but was rebuffed. Hence, this petition.

Whether or not Civil Service Commission Memorandum Circular No 27 must be in
harmony with the provisions of law.

Y e s . It is well established 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 and promulgate rules and regulations to implement a
given legislation and effectuate its policies, for the reason that the legislature often finds it
impracticable to anticipate and provide for the multifarious and complex situations that may
be met in carrying the law into effect. All that is required is that the regulation should be
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.

The CSC MC No. 27 being in the nature of an Administrative regulation, must be

governed by the principle that administrative regulations adopted under legislative
authority by a particular department must be in harmony with the provisions of the law, and
should be for the sole purpose of carrying into effect its general provisions. The rule on
limiting to one year the extension of service of an employee who has reached the compulsory
age of 65 years, but has less than 15 years of service under CSC MC No. 27 cannot likewise
be accorded validity because it has no relationship of connection with any provision of PD
1146 supposed to be carried into effect. The rule was an addition to or extension of the law,
not merely a mode of carrying it into effect. The CSC has no power to supply perceived
omissions in PD 1146.

Additional notes:
I n C e n a v . C S C , t h e C o u r t r e a c h e d i t s conclusion primarily on the basis of
the "plain and ordinary meaning" of Section 11(b) of P.D. No. 1146. While Section 11
(b) appeared cast in verbally unqualified terms, there were 2 administrative
issuances which prescribe limitations on the extension of service that may be granted to
an employee who has reached sixty-five (65) years of age. These are CSC Circular No. 27, s.
1990 and OP M.C. No. 65. The Court resolved the challenges posed by the above two (2)
administrative regulations by considering as invalid Civil Service Memorandum No. 27 and
interpreting the OP M.C. No. 65 as inapplicable to the case of Cena.

The Court rules that the SC in Cena made a narrow interpretation. It is incorrect to decide
the issue on the basis only of PD 1146. The Admin Code and PD 1146 a r e t h e governing
laws relating to retirement of government officials and employees. It was on the basis of
the above quoted provisions of the 1987 Administrative Code that the Civil
Service Commission promulgated its Memorandum Circular No. 27. In doing so, the
Commission was acting as "the central personnel agency of the government empowered to
promulgate policies, standards and guidelines for efficient, responsive and effective
personnel administration in the government. It was also discharging its function of
"administering the retirement program for government officials and employees" and of
"evaluating qualifications for retirement." It is also incorrect to say that
limitation of permissible extensions of service after an employee has reached sixty-
five (65) years of age has no reasonable relationship or is not germane to the foregoing
provisions of the present Civil Service Law. The physiological and psychological
processes associated with ageing in human beings are in fact related to the efficiency and
quality of the service that may be expected from individual persons. CSC Memo No. 27 is not
invalid for having gone beyond the parameters set by PD 1146. In fact what the
legislature intends is that the CSC should “fill in the details” in the implementation
of PD 1146.

10. AbakadaGuro Party List vsPurisima


RA 9335 (Attrition Act of 2005) was enacted to optimize the revenue-generation

capability and collection of the BIR and the BOC. The law intends to encourage their officials
and employees to exceed their revenue targets by providing a system of rewards and
sanctions through the creation of Rewards and Incentives Fund and Revenue Performance
Evaluation Board. The Boards in the BIR and BOC, DOF, DBM, and NEDA, were tasked to
prescribe the rules and guidelines for the allocation, distribution and release of the fund, to
set criteria and procedures for removing service officials and employees whose revenue
collection fall short of the target; and further, to issue rules and regulations.

Petitioners, invoking their right as taxpayers filed this petition challenging the
constitutionality of RA 9335, a tax reform legislation. They contend that, by establishing a
system of rewards and incentives, the law "transform[s] the officials and employees of the
BIR and the BOC into mercenaries and bounty hunters" as they will do their best only in
consideration of such rewards. Thus, the system of rewards and incentives invites
corruption and undermines the constitutionally mandated duty of these officials and
employees to serve the people with utmost responsibility, integrity, loyalty and efficiency.

Issue: WON the provisions on Rewards and Incentives in RA 9335 is unconstitutional.

Ruling: No. Petitioners’ claim is not only without any factual and legal basis; it is also purely
speculative. Public officers enjoy the presumption of regularity in the performance of their
duties. This presumption necessarily obtains in favor of BIR and BOC officials and employees.
RA 9335 operates on the basis thereof and reinforces it by providing a system of rewards
and sanctions for the purpose of encouraging the officials and employees of the BIR and the
BOC to exceed their revenue targets and optimize their revenue-generation capability and

Public service is its own reward. Nevertheless, public officers may by law be rewarded for
exemplary and exceptional performance. A system of incentives for exceeding the set
expectations of a public office is not anathema to the concept of public accountability. In fact,
it recognizes and reinforces dedication to duty, industry, efficiency and loyalty to public
service of deserving government personnel. Employees of the BIR and the BOC may by law
be entitled to a reward when, as a consequence of their zeal in the enforcement of tax and
customs laws, they exceed their revenue targets. In addition, RA 9335 establishes safeguards
to ensure that the reward will not be claimed if it will be either the fruit of "bounty hunting
or mercenary activity" or the product of the irregular performance of official duties.

11. GUTIERREZ VS DBM; GR NO.153266 (class suit)

Congress RA 6758, called the Compensation and Position Classification Act to
rationalize the compensation of government employees. Its Section 12 directed the
consolidation of allowances and additional compensation already being enjoyed by
employees into their standardized salary rates. But it exempted certain additional
compensations that the employees may be receiving from such consolidations such as
transportation allowance.

Department of Budget and Management (DBM) NCC 59 covering the government

which enumerated the specific allowances and additional compensations which were
deemed integrated in the basic salaries and these included the Cost of Living Allowance
(COLA) and Inflation Connected Allowance(ICA).DBM issued Corporate Compensation
Circular (CCC) covering GOCCs and government financial institutions.

Accordingly, the Commission on Audit (COA) disallowed the payments of honoraria

and other allowances which were deemed integrated into the standardized salary
rates. Employees of government-owned or controlled corporations questioned the validity
of CCC 10 due to its non-publication.

Meanwhile, the DBM also issued Budget Circular 2001-03clarifying that only the
exempt allowances may continue to be granted the employees; all others were deemed
integrated in the standardized salary rates. Thus, the payment of allowances and
compensation such as Cost of Living Allowances and Inflation Connected Allowance that
were already deemed integrated in the basic salary were unauthorized.

DBM issued a National Budget Circular which provided that all Supreme Court rulings
on the integration of allowances, including COLA, of government employees under R.A. 6758
applied only to specific government-owned or controlled corporations. Consequently, the
payment of allowances and other benefits to them remained prohibited until otherwise
provided by law or ruled by this Court.


1. Whether or not the COLA should be deemed integrated into the standardized salary rates
of the concerned government employees by virtue of Section 12 of R.A. 6758;

2. Whether or not the ICA may still be paid to officials and employees of the Insurance
3. Whether or not the non-publication of NCC 59 in the Official Gazette or newspaper of
general circulation nullifies the integration of the COLA into the standardized salary rates;

3. Whether or not the grant of COLA to military and police personnel to the exclusion of
other government employees violates the equal protection clause.

RULING: YES. Delegated rule-making is a practical necessity in modern governance because

ofthe increasing complexity and variety of public functions. Congress has endowed
administrative agencies like respondent DBM with the power to make rules and regulations
to implement a given legislation and effectuate its policies. Such power is, however,
necessarily limited to what the law provides. Implementing rules and regulations cannot
extend the law or expand its coverage, as the power to amend or repeal a statute belongs to
the legislature. Administrative agencies implement the broad policies laid down in a law by
“filling in” only its details. The regulations must be germane to the objectives and purposes
of the law and must conform to the standards prescribed by law.

R.A. 6758 did not prohibit the DBM from identifying for the purpose of implementation what
fell into the class of “all allowances.” With respect to what employees’ benefits fell outside
the term apart from those that the law specified, the DBM, said this Court in a case, needed
to promulgate rules and regulations identifying those excluded benefits.COLA is deemed
already incorporated in the standardized salary rates of government employees under the
general rule of integration.

1. YES. As defined, cost of living refers to “the level of prices relating to a range of
everyday items” or “the cost of purchasing those goods and services which are included in
an accepted standard level of consumption.” Based on this premise, COLA is a benefit
intended to cover increases in the cost of living. Thus, it is and should be integrated into the
standardized salary rates.

ICA, like COLA, falls under the general rule of integration. The DBM specifically identified
it as an allowance or additional compensation integrated into the standardized salary rates.
By its very nature, ICA is granted due to inflation and upon determination that the current
salary of officials and employees of the Insurance Commission is insufficient to address the
problem. The DBM determines whether a need for ICA exists and the fund from which it will
be taken. The Insurance Commission cannot, on its own, determine what allowances are
necessary and then grant them to its officials and employees without the approval of the

2. NO. It is a settled rule that publication is required as a condition precedent to the

effectivity of a law to inform the public of its contents before their rights and interests are
affected by the same. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid delegation.
Nonetheless, as previously discussed, the integration of COLA into the standardized salary
rates is not dependent on the publication of CCC 10 and NCC 59. This benefit is deemed
included in the standardized salary rates of government employees since it falls under the
general rule of integration—”all allowances.”

3. NO. While it may appear that petitioners are questioning the constitutionality of these
issuance, they are in fact attacking the very constitutionality of Section 11 of R.A. 6758. It is
actually this provision which allows the uniformed personnel to continue receiving their
COLA over and above their basic pay. The classification must satisfy the following
requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the
purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must
apply equally to all members of the same class.The fundamental right of equal protection of
the laws is subject to reasonable classification. As for the personnel they are likely to be
assigned to a variety of low, moderate, and high-cost areas, and since their basic pay does
not vary based on location, the continued grant of Cost of living allowance (COLA) is intended
to help them offset the effects of living in higher cost areas.

12. G.R. No. 170463. February 2, 2011.


WINSTON F. GARCIA, in his capacity as GSIS President and General Manager,
petitioners, vs. ALBERT M. VELASCO and MARIO I. MOLINA, respondents.

Facts: On May 2002, Petitioners charged the respondents with administrative case for grave
misconduct for their alleged participation and in the demonstration held by some GSIS
employees to denounce the alleged corruption within the agency and to oust its president
Winston Garcia. The Board placed the respondents under preventive suspension for 90 days.

On April 2003, respondent Molina requested for a step increment but it was denied because
he did not pass the qualifications mentioned in the Board Resolution. The respondents filed
a petition for prohibition with prayer for writ of preliminary injunction claiming that they
were denied of their benefits as employees of GSIS due to their pending administrative case.
Respondents also argued that the subject resolutions were ineffective because they were not
registered with the UP Law Center pursuant to the Revised Administrative Code of 1987.

The trial court granted the petition and declared the subject Board Resolution null and void.
Issue: WON a Special Civil action for Prohibition against GSIS Board – who is exercising quasi
legislative and administrative function – is within the jurisdiction of RTC

Ruling: YES. The petition for prohibition filed by respondents is a special civil action which
may be filed in the Supreme Court, the Court of Appeals, the Sandiganbayan or the regional
trial court, as the case may be. It is also a personal action because it does not affect the title
to, or possession of real property, or interest therein. It may comment and be tried where
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, at the election of the plaintiff. Since respondent Velasco is a
resident of the City of Manila, the petition could properly be filed in the City of Manila.

Section 18 of Batas PambansaBlg. 129 (BP 129) provides:Authority to define territory

appurtenant to each branch. - The Supreme Court shall define the territory over which a
branch of the Regional Trial Court shall exercise its authority. The territory thus
defined shall be deemed to be the territorial area of the branch concerned for
purposes of determining the venue of all suits, proceedings or actions, whether civil
or criminal, as well as determining the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts over which the said branch may exercise appellate
jurisdiction. The power herein granted shall be exercised with a view to making the courts
readily accessible to the people of the different parts of the region and making attendance of
litigants and witnesses as inexpensive as possible. (Emphasis supplied)


Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social
Security System (SSS) who retired from government service. They availed of compulsory
retirement benefits under Republic Act No. 660. In addition, petitioners also claimed benefits
granted under SSS Resolution No. 56, series of 1971 that provides financial incentive and
inducement to SSS employees qualified to retire to avail of retirement benefits under RA 660
as amended, rather than the retirement benefits under RA 1616 as amended, by giving them
“financial assistance” equivalent in amount to the difference between what a retiree would
have received under RA 1616, less what he was entitled to under RA 660. Thereafter, COA
issued a ruling disallowing in audit “all such claims for financial assistance under SSS
Resolution No. 56” for the reason that it results in the increase of benefits beyond what is
allowed under existing retirement laws.

1. Whether or not public respondent abused its discretion when it disallowed in audit
petitioners’ claims for benefits under SSS Res. 56.

2. Whether or not SSS Resolution No. 56 is valid.

1. No. The Commission bears stress that the financial assistance contemplated under SSS
Resolution No. 56 is granted to SSS employees who opt to retire under R.A. No. 660. It is clear
that petitioners applied for benefits under RA 660 only because of the incentives offered by
Res. 56, and that absent such incentives, they would have without fail availed of RA 1616
instead. The petition is dismissed for lack of merit, there having been no grave abuse of
discretion on the part of respondent Commission.
2. No. The said financial assistance partakes of the nature of a retirement benefit that has the
effect of modifying existing retirement laws particularly R.A. No. 660. It is simply beyond
dispute that the SSS had no authority to maintain and implement such retirement plan and
in the guise of rule-making, legislate or amend laws or worse, render them nugatory. Hence,
SSS Resolution No. 56 is hereby illegal, void and no effect.

SCRA: Same; Same; Same; Administrative Law; Delegation of Powers; The rule-making
power of a public administrative body is a delegated legislative power, which it may not use
either to abridge the authority given it by the Congress or the Constitution or to enlarge its
power beyond the scope intended.—It is doctrinal that in case of conflict between a statute
and an administrative order, the former must prevail. A rule or regulation must conform to
and be consistent with the provisions of the enabling statute in order for such rule or
regulation to be valid. The rule-making power of a public administrative body is a delegated
legislative power, which it may not use either to abridge the authority given it by the
Congress or the Constitution or to enlarge its power beyond the scope intended.

14. People vs. Santos 62 Phil. 300

The Secretary of Agriculture and Commerce, by virtue of the authority vested in him
by section 4 of ActNo.4003 issued Administrative Order No. 2 Section 28 relative to fish and
game provides as follows;
“28. Prohibited fishing areas, collect, gather, take, or remove fish and other sea products
from Philippine waters shall be allowed to fish, loiter, or anchor within 3 kilometers of the
shore line of islands and reservations over which jurisdiction is exercised by naval
or military authorities of the United States, particularly Corregidor, PuloCaballo, La Monja,
El Fraile, and Carabao, and all other islands and detached rocks lying between Mariveles
Reservation on the north side of the entrance to manila bay and Calumpan Point Reservation
on the south side of said entrance; Provided, that boats not subject to license under Act No.
4003 and this order may fish within the areas mentioned above only upon receiving written
permission therefore, which permission maybe granted by the Secretary of Agriculture and
Commerce upon recommendation of the military or naval authorities concerned.

“A violation of this paragraph may be proceeded against under section 41 of the Federal
Penal Code.”

The herein accused and appellee Augusto A. Santos is charged with having ordered his
fishermen to manage and operate the motor launches Malabon II and Malabon III registered
in his name and to fish, loiter and anchor within three kilometers of the shore line of the
Island of Corregidor over which jurisdiction is exercised by naval and military authorities of
the United States, without permission from the Secretary of Agriculture and Commerce.

Issues: Whether or not violation of section 28 of Administrative Order No. 2 can give rise
to criminal prosecution.
Act No. 4003 does not contain a provision prohibiting boats not subject to license to fish wi
thin the stipulated areas without the written permission of the Secretary. Since the act itself
does not contain such prohibition, the rules and regulations promulgated by the Secretary of
Agriculture to carry into effect the provisions of the law cannot incorporate such prohibition.

For the foregoing considerations, we are of the opinion and so hold that the conditional
clause of section 28 of Administrative Order No. 2, issued by the Secretary of Agriculture
and Commerce, is null and void and without effect, as constituting an excess of the regulatory
power conferred upon him by section 4 of Act No. 4003 and an exercise of a legislative power
which has not been and cannot be delegated to him. Therefore, inasmuch as the facts with
the commission of which Augusto A. Santos is charged do not constitute a crime or a violation
of some criminal law within the jurisdiction of the civil courts, the information filed against
him is dismissed, with the costs de oficio. So ordered.

15. People vs. Quepolay


Que Po Lay is appealing from the decision of the Court of First Instance of Manila, finding him guilty of
violating Central Bank Circular No. 20 in connection with section 34 of Republic Act No. 265, for
possession of foreign exchange consisting of U.S. dollars, U.S. checks and U.S. money orders amounting
to about $7,000 and failing to sell the same to the Central Bank through its agents within one day
following the receipt of such foreign exchange as required by Circular No. 20.

The appeal is based on the claim that said circular No. 20 was not published in the Official Gazette prior
to the act or omission imputed to the appellant, and that consequently, said circular had no force and

The Solicitor General answering this contention says that Commonwealth Act. No. 638 and 2930 do not
require the publication in the Official Gazette of said circular issued for the implementation of a law in
order to have force and effect.

Issue: WON Circular No. 20 should be published in Official Gazette in order to make it effective


Yes. Section11 of the Revised Administrative Code provides that statutes passed by Congress shall, in the
absence of special provision, take effect at the beginning of the fifteenth day after the completion of the
publication of the statute in the Official Gazette. Article 2 of the new Civil Code (Republic Act No. 386)
equally provides that laws shall take effect after fifteen days following the completion of their publication
in the Official Gazette, unless it is otherwise provided.

It is true that Circular No. 20 of the Central Bank is not a statute or law but being issued for the
implementation of the law authorizing its issuance, it has the force and effect of law according to settled
jurisprudence. (See U.S. vs. Tupasi Molina, 29 Phil., 119 and authorities cited therein.) Moreover, as a
rule, circulars and regulations especially like the Circular No. 20 of the Central Bank in question which
prescribes a penalty for its violation should be published before becoming effective, this, on the general
principle and theory that before the public is bound by its contents, especially its penal provisions, a law,
regulation or circular must first be published and the people officially and specifically informed of said
contents and its penalties.

In the present case, although circular No. 20 of the Central Bank was issued in the year 1949, it was not
published until November 1951, that is, about 3 months after appellant's conviction of its violation. It is
clear that said circular, particularly its penal provision, did not have any legal effect and bound no one
until its publication in the Official Gazzette or after November 1951. In other words, appellant could not
be held liable for its violation, for it was not binding at the time he was found to have failed to sell the
foreign exchange in his possession thereof.

(Additionally the question of the non-publication may be raised it in any stage of the proceeding, thus it
can be raised first time in appeal as it is fundamental and the court acquires no jurisdiction for in the eyes
of the law no violation has been committed.)

16. Dagan vs Phil Racing Commission (Philracom)

February 12, 2009

Philracom directing the Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club,
Inc. (PRCI) to immediately come up with their respective Clubs House Rule to address Equine
Infectious Anemia (EIA) problem and to rid their facilities of horses infected with EIA. Said
directive was issued pursuant to Administrative Order No. 5 by the Department of
Agriculture declaring it unlawful for any person, firm or corporation to ship, drive, or
transport horses from any locality or place except when accompanied by a certificate issued
by the authority of the Director of the Bureau of Animal Industry (BAI).

In compliance with the directive, MJCI and PRCI ordered the owners of racehorses
stable in their establishments to submit the horses to blood sampling and administration of
the Coggins Test to determine whether they are afflicted with the EIA virus. Subsequently,
on 17 September 2004, Philracom issued copies of the guidelines for the monitoring and
eradication of EIA.

Petitioners and racehorse owners refused to comply with the directive.Despite

resistance from petitioners, the blood testing proceeded. The horses, whose owners refused
to comply were banned from the races, were removed from the actual day of race, prohibited
from renewing their licenses or evicted from their stables.
Racehorse owners lodged a complaint before the Office of the President (OP) which
in turn issued a directive instructing Philracom to investigate the matter.
Petitioners filed for a TRO with the RTC-granted. RTC however dismissed their
petition for INJUNCTION because 1.) The issue is already moot since almost all racehorse
owners complied with the directives and 2.) It is valid exercise of police power. Upon appeal,
CA affirmed the RTC decision in toto.

Issue: Whether or not there is a valid delegation of legislative power to Philracom

Ruling: YES

The validity of an administrative issuance, such as the assailed guidelines, hinges on

compliance with the following requisites:

1. Its promulgation must be authorized by the legislature;

2. It must be promulgated in accordance with the prescribed procedure;
3. It must be within the scope of the authority given by the legislature;
4. It must be reasonable.

All the prescribed requisites are met as regards the questioned issuances. Philracoms
authority is drawn from P.D. No. 420. The delegation made in the presidential decree is valid.
Philracom did not exceed its authority. And the issuances are fair and reasonable.xxxx

(in case lang, bakatatanunginni Ma’am)

(First Requisite)
The rule is that what has been delegated cannot be delegated, or as expressed in the
Latin maxim: potestas delegate non delegarepotest. This rule is based upon the ethical
principle that such 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. This rule however
admits of recognized exceptions] such as the grant of rule-making power to administrative
agencies. They have been granted by Congress with the authority to issue rules to regulate
the implementation of a law entrusted to them. Delegated rule-making has become a
practical necessity in modern governance due to the increasing complexity and variety of
public functions.]
(Second Requisite)
While it is conceded that the guidelines were issued a month after Philracoms
directive, this circumstance does not render the directive nor the guidelines void. The
directives validity and effectivity are not dependent on any supplemental
guidelines. Philracom has every right to issue directives to MJCI and PRCI with respect to the
conduct of horse racing, with or without implementing guidelines.

(Third requisite)
The administrative body may not make rules and regulations which are inconsistent
with the provisions of the Constitution or a statute, particularly the statute it is administering
or which created it, or which are in derogation of, or defeat, the purpose of a statute.]

The assailed guidelines prescribe the procedure for monitoring and eradicating
EIA. These guidelines are in accord with Philracoms mandate under the law to regulate the
conduct of horse racing in the country.

(Fourth requisite)
The assailed guidelines do not appear to be unreasonable or discriminatory. In fact,
all horses stabled at the MJCI and PRCIs premises underwent the same procedure. The
guidelines implemented were undoubtedly reasonable as they bear a reasonable relation to
the purpose sought to be accomplished, i.e., the complete riddance of horses infected with
House-owners were also informed beforehand. The lease contract executed between
petitioner and MJC contains a proviso reserving the right of the lessor, MJCI in this case, the
right to determine whether a particular horse is a qualified horse.In addition, Philracoms
rules and regulations on horse racing provide that horses must be free from any contagious
disease or illness in order to be eligible as race entries.