G.R. No. 116356 June 29, 1998 EASTERN SHIPPING LINES, INC., petitioner, vs.

COURT OF APPEALS and DAVAO PILOTS ASSOCIATION, respondents. PANGANIBAN, J.: In Philippine Interisland Shipping Association of the Philippines vs. Court of Appeals, 1 the Court, en banc, ruled that Executive Order 1088 2 was not unconstitutional. We adhere to said ruling in this case. The Case This is a petition or certiorari under Rule 45, assailing the Decision 3 of the Court of Appeals 4 in CA-GR CV No. 34487 promulgated on July 18, 1994, the dispositive portion of which reads: WHEREFORE, finding no reversible error in the decision appealed from, the same is hereby AFFIRMED in toto. With costs against defendant-appellant. The Decision affirmed by Respondent Court disposed as follows: WHEREFORE, judgment is rendered directing the defendant: 1. To pay plaintiff the sum of P602,710.04 with legal rate of interest commencing from the filing of the complaint representing unpaid pilotage fees; 2. To pay attorney's fees in the sum of P50,000.00; 3. And costs. SO ORDERED. Hence, this appeal. 5 The Facts As found by the trial court, these are the undisputed facts: On September 25, 1989, plaintiff [herein private respondent] elevated a complaint against defendant [herein petitioner] for sum of money and attorney's fees alleging that plaintiff had rendered pilotage services to defendant between January 14, 1987 to July 22, 1989 with total unpaid fees of P703,290.18. Despite repeated demands, defendant failed to pay and prays that the latter be directed to pay P703,290.18 with legal rate of interest from the filing of the complaint; attorney's fees equivalent to 25% of the principal obligation and such other relief. On November 18, 1989 defendant answered vigorously disputing the claims of plaintiff. It assailed the constitutionality of the Executive Order 1088 upon which plaintiff bases its claims; alleged that there is a pending case before the Court of Appeals elevated by the United Harbor Pilots Association of the Philippines of which plaintiff is a member[;] whereas defendant is a member of the Chamber of Maritime Industries of the Philippine[s] which is an Intervenor in CA-G.R. SP No. 18072; that there therefore is lis pendens by Section 1 (e), Rule 16 of the Rules; that the subject of the complaint falls within the scope and authority of the Philippine Ports Authority by virtue of PD No. 857 dated December 23, 1975; that Executive Order No. 1088 is an unwarranted repeal or modification of the Philippine Ports Authority Charter; that the fees charged by plaintiff are arbitrary and confiscatory; and the basis of the Executive Order 1088 is offensive, sourced from Amendment No. 6 of the 1973 Constitution and rendered inoperative by the Freedom Constitution of March 25, 1986 and the present Constitution; and that the only agency vested by law to prescribe such rates, charges or fees for services rendered by any private organization like the plaintiff within a Port District is governed by Section 20 of PD 857. As regular patron of plaintiff, defendant has never been remiss in paying plaintiff's claim for pilotage fees and the present complaint under the foregoing circumstances is without legal foundation. Defendant prays that plaintiff be advised to await the final outcome of the identical issues already elevated to and pending before the Court of Appeals as CA-G.R. SP No. 18072. Defendant prays for an award of damages, attorney's fees, litigation expense and costs. At the Pre-Trial Conference, the only issue raised by plaintiff is whether the defendant is liable to the plaintiff for the money claims alleged in the complaint.

The defendant on the other hand raised the following issues: 1. Whether or not Executive Order 1088 is constitutional; 2. Whether or not Executive Order 1088 is illegal; 3. Whether or not the plaintiff may motu proprio and independently of the Public Estates Authority enforce Executive Order 1088 and collect the pilotage fees prescribed thereunder; 4. Assuming Executive Order 1088 is constitutional, valid and selfexecutory, whether or not the defendant is liable; and if so, to what extent and for what particular items; and 5. Whether or not the plaintiff is liable under the counterclaims (p. 102, Expediente). On September 5, 1990, plaintiff presented witness Capt. Felix N. Galope, in the course of which testimony identified among others EXHIBITS "B" to "E-2" and "J" to "1-2" consisting of documents related to the collection of the unpaid pilotage fees; basis for such computations; Statement of Accounts; demand letter and official recipients of payment made. On September 6, 1990, Simplicio Barao, plaintiff's Billing Clerk testified among others on the records of plaintiff's Captain's Certificate/Pilotage Chits and Bills/Statements of Accounts on the claims against defendant (EXHIBITS "G" to "H-48-A") and the details of the outstanding accounts in favor of plaintiff. The records show defendant raised no objection thereto and by virtue of which all of plaintiff's documentary exhibits were admitted. (Order dated January 14, 1991, p. 277 Expediente). On March 14, 1991, defendant presented Celso Occidental, employee of defendant shipping company, in the course of which testimony submitted EXHIBITS "1" to "1-D" which is plaintiff's Billing Rate, both old and new with a payment of P79,585.64; and "2" to "2-G" representing plane ticket paid for by defendant for transportation expenses of its counsel and cost of stenographic transcripts. Defendant's last witness, Capt. Jose Dubouzet, Jr. and a Harbor Pilot was briefly presented. 6 After due trial, the trial court rendered its ruling, viz.: Plaintiff's evidence as to the unpaid pilotage services due from defendant duly supported by voluminous documentary exhibits has not been refuted nor rebutted by defendant. On the contrary, when plaintiff's documentary exhibits were formally offered, defendant did not raise any objection thereby leaving the documents unchallenged and undisputed. Upon the other hand, while the records show that defendant raised no less than five (5) issues the evidence fails to show any proof to sustain defendant's posture. On the contrary, neither of defendant's two witnesses appear to have even grazed the outer peripheries of what could have been interesting issues with far-reaching consequences if resolved. 7 The factual antecedents of the controversy are simple. Petitioner insists on paying pilotage fees prescribed under PPA circulars. Because EO 1088 sets a higher rate, petitioner now assails its constitutionality. Public Respondent's Ruling As stated earlier, Respondent Court of Appeals affirmed the trial court's decision. Respondent Court pointed out that petitioner, during the pre-trial, limited the issues to whether: (1) EO C88 is unconstitutional; (2) EO 1088 is illegal; (3) private respondent itself may enforce and collect fees under EO 1088; and (4) petitioner is liable and, if EO 1088 is legal, to what extent. It then affirmed the factual findings and conclusion of the trial court that petitioner "fail[ed] to show any proof" to support its position. Parenthetically, Respondent Court also noted two other cases decided by the Court of Appeals, upholding the constitutionality of EO 1088. 8 The Issue In sum, petitioner raises this main issue: whether Executive Order 1088 is unconstitutional. 9 The Court's Ruling

The petition is unmeritorious. EO 1088 Is Valid Petitioner contends that EO 1088 10 is unconstitutional, because (1) its interpretation and application are left to private respondent, a private person, 11 and (2) it constitutes an undue delegation of powers. Petitioner insists that it should pay pilotage fees in accordance with and on the basis of the memorandum circulars issued by the PPA, the administrative body vested under PD 857 12 with the power to regulate and prescribe pilotage fees. In assailing the constitutionality of EO 1088, the petitioner repeatedly asks: "Is the private respondent vested with power to interpret Executive Order No. 1088?" 13 The Court is not persuaded. The pertinent provisions of EO 1088 read: Sec. 1. The following shall be the rate of pilotage fees or charges based on tonnage for services rendered to both foreign and coastwise vessels: For Foreign Vessels Rate in US$ &/or its Peso Equivalent Less than 500GT $ 30.00 500GT to 2,500GT 43.33 2,500GT to 5,000GT 71.33 5,000GT to 10,000GT 133.67 10,000GT to 15,000GT 181.67 15,000GT to 20,000GT 247.00 20,000GT to 30,000GT 300.00 30,000GT to 40,000GT 416.67 40,000GT to 60,000GT 483.33 60,000GT to 80,000GT 550.00 80,000GT to 100,000GT 616.67 100,000GT to 120,000GT 666.67 120,000GT to 130,000GT 716.67 130,000GT to 140,000GT 766.67 Over 140,000 gross tonnage $0.05 or its peso equivalent every excess tonnage. Rate for docking and undocking anchorage, conduction and shifting other related special services is equal to 100%. Pilotage services shall be compulsory in government and private wharves or piers. For Coastwise Vessels Regular 100 and under 500 gross tons P 41.70 500 and under 600 gross tons 55.60 600 and under 1,000 gross tons 69.60 1,000 and under 3,000 gross tons 139.20 3,000 and under 5,000 gross tons 300.00 5,000 and over gross tons Sec. 2. With respect to foreign vessels, payment of pilotage services shall be made in dollars or in pesos at the prevailing exchange rate. Sec. 3. All orders, letters of instructions, rules, regulations and other issuances inconsistent with this Executive Order are hereby repealed or amended accordingly. Sec. 4. This Executive Order shall take effect immediately. In Philippine Interisland Shipping Association of the Philippines vs. Court of Appeals, 14 the Supreme Court, through Mr. Justice Vicente V. Mendoza, upheld the validity and constitutionality of Executive Order 1088 in no uncertain terms. We aptly iterate our pronouncement in said case, viz.: It is not an answer to say that E.O. No. 1088 should not be considered

a statute because that would imply the withdrawal of power from the PPA. What determines whether an act is a law or an administrative issuance is not its form but its nature. Here as we have already said, the power to fix the rates of charges for services, including pilotage service, has always been regarded as legislative in character. xxx xxx xxx It is worthy to note that E.O. NO. 1088 provides for adjusted pilotage service rates without withdrawing the power of the PPA to impose, prescribe, increase or decrease rates, charges or fees. The reason is because E.O. No. 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the "rationalization of pilotage service charges, through the imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports. xxx xxx xxx We conclude that E.O. No. 1088 is a valid statute and that the PPA is duty bound to comply with its provisions. The PPA may increase the rates but it may not decrease them below those mandated by E.O. No. 1088. . . . . 15 We see no reason to depart from this ruling. The Court's holding clearly debunks petitioner's insistence on paying its pilotage fees based on memorandum circulars issued by the PPA. 16 Because the PPA circulars are inconsistent with EO 1088, they are void and ineffective. "Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution." 17 As stated by this Court in Land Bank of the Philippines vs. Court of Appeals, 18 "[t]he conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction, or grave abuse of discretion clearly conflicting with either the letter or spirit of the law." 19 It is axiomatic that an administrative agency, like the PPA, has no discretion whether to implement the law or not. Its duty is to enforce it. Unarguably, therefore, if there is any conflict between the PPA circular and a law, such as EO 1088, the latter prevails. 20 Based on the foregoing, petitioner has no legal basis to refuse payment of pilotage fees to private respondent, as computed according to the rates set by EO 1088. Private respondent cannot be faulted for relying on the clear and unmistakable provisions of EO 1088. In fact, EO 1088 leaves no room for interpretation, thereby unmistakably showing the duplicity of petitioner's query: "Is the private respondent vested with power to interpret Executive Order No. 10882?" WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED.

G.R. No. L-75697 June 18, 1987 VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner, vs.VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR and CITY TREASURER OF MANILA, respondents. Nelson Y. Ng for petitioner. The City Legal Officer for respondents City Mayor and City Treasurer.

MELENCIO-HERRERA, J.: This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of other videogram operators adversely affected. It assails the constitutionality of Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry (hereinafter briefly referred to as the BOARD). The Decree was promulgated on October 5, 1985 and took effect on April 10, 1986, fifteen (15) days after completion of its publication in the Official Gazette.

On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential Decree No. 1994 amended the National Internal Revenue Code providing, inter alia: SEC. 134. Video Tapes. There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax. On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers and Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association, hereinafter collectively referred to as the Intervenors, were permitted by the Court to intervene in the case, over petitioner's opposition, upon the allegations that intervention was necessary for the complete protection of their rights and that their "survival and very existence is threatened by the unregulated proliferation of film piracy." The Intervenors were thereafter allowed to file their Comment in Intervention. The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows: 1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others, videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific, amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in government revenues; 2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby depriving the Government of approximately P180 Million in taxes each year; 3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of the movie industry, particularly the more than 1,200 movie houses and theaters throughout the country, and occasioned industry-wide displacement and unemployment due to the shutdown of numerous moviehouses and theaters; 4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to create an environment conducive to growth and development of all business industries, including the movie industry which has an accumulated investment of about P3 Billion; 5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire financial condition of the movie industry upon which more than 75,000 families and 500,000 workers depend for their livelihood, but also provide an additional source of revenue for the Government, and at the same time rationalize the heretofore uncontrolled distribution of videograms; 6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear and present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the development of moral character and promote their physical, intellectual, and social well-being; 7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant malpractices which have flaunted our censorship and copyright laws; 8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and betraying the national economic recovery program, bold emergency measures must be adopted with dispatch; ... (Numbering of paragraphs supplied). Petitioner's attack on the constitutionality of the DECREE rests on the following grounds: 1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to the subject matter thereof; 2. The tax imposed is harsh, confiscatory, oppressive and/or in

unlawful restraint of trade in violation of the due process clause of the Constitution; 3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. 6; 4. There is undue delegation of power and authority; 5. The Decree is an ex-post facto law; and 6. There is over regulation of the video industry as if it were a nuisance, which it is not. We shall consider the foregoing objections in seriatim. 1. The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title thereof" 1 is sufficiently complied with if the title be comprehensive enough to include the general purpose which a statute seeks to achieve. It is not necessary that the title express each and every end that the statute wishes to accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title. 2 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." 3 The rule also is that the constitutional requirement as to the title of a bill should not be so narrowly construed as to cripple or impede the power of legislation. 4 It should be given practical rather than technical construction. 5 Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is without merit. That section reads, inter alia: Section 10. Tax on Sale, Lease or Disposition of Videograms . Notwithstanding any provision of law to the contrary, the province shall collect a tax of thirty percent (30%) of 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. Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is collected; PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission. xxx xxx xxx The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, the general object of the DECREE, which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that general subject and title. As a tool for regulation 6 it is simply one of the regulatory and control mechanisms scattered throughout the DECREE. The express purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize the heretofore uncontrolled distribution of videograms is evident from Preambles 2 and 5, supra. Those preambles explain the motives of the lawmaker in presenting the measure. The title of the DECREE, which is the creation of the Videogram Regulatory Board, is comprehensive enough to include the purposes expressed in its Preamble and reasonably covers all its provisions. It is unnecessary to express all those objectives in the title or that the latter be an index to the body of the DECREE. 7 2. 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. 8 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 exercises it. 9 In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 10 The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of

videogram establishments of around P600 million per annum have not been subjected to tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax, imposed on retailers for every videogram they make available for public viewing. It is similar to the 30% amusement tax imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on to the entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed uniformly on all videogram operators. The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition. The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. 11 It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation". 12 Taxation has been made the implement of the state's police power. 13 At bottom, the rate of tax is a matter better addressed to the taxing legislature. 3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the former President under Amendment No. 6 of the 1973 Constitution providing that "whenever in the judgment of the President ... , 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 instructions, which shall form part of the law of the land." In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause sufficiently summarizes the justification in that grave emergencies corroding the moral values of the people and betraying the national economic recovery program necessitated bold emergency measures to be adopted with dispatch. Whatever the reasons "in the judgment" of the then President, considering that the issue of the validity of the exercise of legislative power under the said Amendment still pends resolution in several other cases, we reserve resolution of the question raised at the proper time. 4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative power. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution, enforcement, and implementation. "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." 14 Besides, in the very language of the decree, the authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to the direction and control of the BOARD." That the grant of such authority might be the source of graft and corruption would not stigmatize the DECREE as unconstitutional. Should the eventuality occur, the aggrieved parties will not be without adequate remedy in law. 5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other categories, one which "alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense." It is petitioner's position that Section 15 of the DECREE in providing that:

All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after the effectivity of this Decree within which to register with and secure a permit from the BOARD to engage in the videogram business and to register with the BOARD all their inventories of videograms, including videotapes, discs, cassettes or other technical improvements or variations thereof, before they could be sold, leased, or otherwise disposed of. Thereafter any videogram found in the possession of any person engaged in the videogram business without the required proof of registration by the BOARD, shall be prima facie evidence of violation of the Decree, whether the possession of such videogram be for private showing and/or public exhibition. raises immediately a prima facie evidence of violation of the DECREE when the required proof of registration of any videogram cannot be presented and thus partakes of the nature of an ex post facto law. The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15 ... it is now well settled that "there is no constitutional objection to the passage of a law providing that the presumption of innocence may be overcome by a contrary presumption founded upon the experience of human conduct, and enacting what evidence shall be sufficient to overcome such presumption of innocence" (People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641). And the "legislature may enact that when certain facts have been proved that they shall be prima facie evidence of the existence of the guilt of the accused and shift the burden of proof provided there be a rational connection between the facts proved and the ultimate facts presumed so that the inference of the one from proof of the others is not unreasonable and arbitrary because of lack of connection between the two in common experience". 16 Applied to the challenged provision, there is no question that there is a rational connection between the fact proved, which is non-registration, and the ultimate fact presumed which is violation of the DECREE, besides the fact that the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period counted from its effectivity and is, therefore, neither retrospective in character. 6. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of existence as if it were a nuisance. Being a relatively new industry, the need for its regulation was apparent. While the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business. 17 The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video industry. On the contrary, video establishments are seen to have proliferated in many places notwithstanding the 30% tax imposed. In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the DECREE. These considerations, however, are primarily and exclusively a matter of legislative concern. 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 its wisdom cannot be sustained. 18

In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute. We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as unconstitutional and void. WHEREFORE, the instant Petition is hereby dismissed. No costs. SO ORDERED.

protection clause of the constitution. D. There is no urgent need and demand for the services applied for. E. To grant petitioner's application would only result in ruinous competition contrary to Section 4(d) of R.A. 776. 5 At the initial hearing for the application, petitioner raised the issue of lack of jurisdiction of the Board to hear the application because GrandAir did not possess a legislative franchise. On December 20, 1994, the Chief Hearing Officer of CAB issued an Order denying petitioner's Opposition. Pertinent portions of the Order read:

G.R. No. 119528 March 26, 1997 PHILIPPINE AIRLINES, INC., petitioner, vs.CIVIL AERONAUTICS BOARD and GRAND INTERNATIONAL AIRWAYS, INC., respondents. TORRES, JR., J.: This Special Civil Action for Certiorari and Prohibition under Rule 65 of the Rules of Court seeks to prohibit respondent Civil Aeronautics Board from exercising jurisdiction over private respondent's Application for the issuance of a Certificate of Public Convenience and Necessity, and to annul and set aside a temporary operating permit issued by the Civil Aeronautics Board in favor of Grand International Airways (GrandAir, for brevity) allowing the same to engage in scheduled domestic air transportation services, particularly the Manila-Cebu, Manila-Davao, and converse routes. The main reason submitted by petitioner Philippine Airlines, Inc. (PAL) to support its petition is the fact that GrandAir does not possess a legislative franchise authorizing it to engage in air transportation service within the Philippines or elsewhere. Such franchise is, allegedly, a requisite for the issuance of a Certificate of Public Convenience or Necessity by the respondent Board, as mandated under Section 11, Article XII of the Constitution. Respondent GrandAir, on the other hand, posits that a legislative franchise is no longer a requirement for the issuance of a Certificate of Public Convenience and Necessity or a Temporary Operating Permit, following the Court's pronouncements in the case of Albano vs. Reyes, 1 as restated by the Court of Appeals in Avia Filipinas International vs . Civil Aeronautics Board 2 and Silangan Airways, Inc. vs. Grand International Airways, Inc., and the Hon. Civil Aeronautics Board. 3 On November 24, 1994, private respondent GrandAir applied for a Certificate of Public Convenience and Necessity with the Board, which application was docketed as CAB Case No. EP-12711. 4 Accordingly, the Chief Hearing Officer of the CAB issued a Notice of Hearing setting the application for initial hearing on December 16, 1994, and directing GrandAir to serve a copy of the application and corresponding notice to all scheduled Philippine Domestic operators. On December 14, 1994, GrandAir filed its Compliance, and requested for the issuance of a Temporary Operating Permit. Petitioner, itself the holder of a legislative franchise to operate air transport services, filed an Opposition to the application for a Certificate of Public Convenience and Necessity on December 16, 1995 on the following grounds: A. The CAB has no jurisdiction to hear the petitioner's application until the latter has first obtained a franchise to operate from Congress. B. The petitioner's application is deficient in form and substance in that: 1. The application does not indicate a route structure including a computation of trunkline, secondary and rural available seat kilometers (ASK) which shall always be maintained at a monthly level at least 5% and 20% of the ASK offered into and out of the proposed base of operations for rural and secondary, respectively. 2. It does not contain a project/feasibility study, projected profit and loss statements, projected balance sheet, insurance coverage, list of personnel, list of spare parts inventory, tariff structure, documents supportive of financial capacity, route flight schedule, contracts on facilities (hangars, maintenance, lot) etc. C. Approval of petitioner's application would violate the equal

PAL alleges that the CAB has no jurisdiction to hear the petitioner's application until the latter has first obtained a franchise to operate from Congress. The Civil Aeronautics Board has jurisdiction to hear and resolve the application. In Avia Filipina vs. CAB, CA G.R. No. 23365, it has been ruled that under Section 10 (c) (I) of R.A. 776, the Board possesses this specific power and duty. In view thereof, the opposition of PAL on this ground is hereby denied. SO ORDERED. Meantime, on December 22, 1994, petitioner this time, opposed private respondent's application for a temporary permit maintaining that: 1. The applicant does not possess the required fitness and capability of operating the services applied for under RA 776; and, 2. Applicant has failed to prove that there is clear and urgent public need for the services applied for. 6 On December 23, 1994, the Board promulgated Resolution No. 119(92) approving the issuance of a Temporary Operating Permit in favor of Grand Air 7 for a period of three months, i.e., from December 22, 1994 to March 22, 1994. Petitioner moved for the reconsideration of the issuance of the Temporary Operating Permit on January 11, 1995, but the same was denied in CAB Resolution No. 02 (95) on February 2, 1995. 8 In the said Resolution, the Board justified its assumption of jurisdiction over GrandAir's application. WHEREAS , the CAB is specifically authorized under Section 10-C (1) of Republic Act No. 776 as follows: (c) The Board shall have the following specific powers and duties: (1) In accordance with the provision of Chapter IV of this Act, to issue, deny, amend revise, alter, modify, cancel, suspend or revoke, in whole or in part, upon petitioner-complaint, or upon its own initiative, any temporary operating permit or Certificate of Public Convenience and Necessity; Provided, however; that in the case of foreign air carriers, the permit shall be issued with the approval of the President of the Republic of the Philippines. WHEREAS, such authority was affirmed in PAL vs. CAB, (23 SCRA 992), wherein the Supreme Court held that the CAB can even on its own initiative, grant a TOP even before the presentation of evidence; WHEREAS, more recently, Avia Filipinas vs. CAB, (CA-GR No. 23365), promulgated on October 30, 1991, held that in accordance with its mandate, the CAB can issue not only a TOP but also a Certificate of Public Convenience and Necessity (CPCN) to a qualified applicant therefor in the absence of a legislative franchise, citing therein as basis the decision of Albano vs. Reyes (175 SCRA 264) which provides (inter alia) that: a) Franchises by Congress are not required before each and every public utility may operate when the law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities; b) The Constitutional provision in Article XII, Section 11 that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility does not necessarily imply that only Congress has the power to grant such authorization since our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities.

WHEREAS, Executive Order No. 219 which took effect on 22 January 1995, provides in Section 2.1 that a minimum of two (2) operators in each route/link shall be encouraged and that routes/links presently serviced by only one (1) operator shall be open for entry to additional operators. RESOLVED, (T)HEREFORE, that the Motion for Reconsideration filed by Philippine Airlines on January 05, 1995 on the Grant by this Board of a Temporary Operating Permit (TOP) to Grand International Airways, Inc. alleging among others that the CAB has no such jurisdiction, is hereby DENIED, as it hereby denied, in view of the foregoing and considering that the grounds relied upon by the movant are not indubitable. On March 21, 1995, upon motion by private respondent, the temporary permit was extended for a period of six (6) months or up to September 22, 1995. Hence this petition, filed on April 3, 1995. Petitioners argue that the respondent Board acted beyond its powers and jurisdiction in taking cognizance of GrandAir's application for the issuance of a Certificate of Public Convenience and Necessity, and in issuing a temporary operating permit in the meantime, since GrandAir has not been granted and does not possess a legislative franchise to engage in scheduled domestic air transportation. A legislative franchise is necessary before anyone may engage in air transport services, and a franchise may only be granted by Congress. This is the meaning given by the petitioner upon a reading of Section 11, Article XII, 9 and Section 1, Article VI, 10 of the Constitution. To support its theory, PAL submits Opinion No. 163, S. 1989 of the Department of Justice, which reads: Dr. Arturo C. CoronaExecutive DirectorCivil Aeronautics BoardPPL Building, 1000 U.N. AvenueErmita, Manila Sir: This has reference to your request for opinion on the necessity of a legislative franchise before the Civil Aeronautics Board ("CAB") may issue a Certificate of Public Convenience and Necessity and/or permit to engage in air commerce or air transportation to an individual or entity. You state that during the hearing on the application of Cebu Air for a congressional franchise, the House Committee on Corporations and Franchises contended that under the present Constitution, the CAB may not issue the abovestated certificate or permit, unless the individual or entity concerned possesses a legislative franchise . You believe otherwise, however, for the reason that under R.A. No. 776, as amended, the CAB is explicitly empowered to issue operating permits or certificates of public convenience and necessity and that this statutory provision is not inconsistent with the current charter. We concur with the view expressed by the House Committee on Corporations and Franchises. In an opinion rendered in favor of your predecessor-in-office, this Department observed that, . . . it is useful to note the distinction between the franchise to operate and a permit to commence operation. The former is sovereign and legislative in nature; it can be conferred only by the lawmaking authority (17 W and P, pp. 691-697). The latter is administrative and regulatory in character (In re Application of Fort Crook-Bellevue Boulevard Line, 283 NW 223); it is granted by an administrative agency, such as the Public Service Commission [now Board of Transportation], in the case of land transportation, and the Civil Aeronautics Board, in case of air services. While a legislative franchise is a pre-requisite to a grant of a certificate of public convenience and necessity to an airline company, such franchise alone cannot constitute the authority to commence operations, inasmuch as there are still matters relevant to such operations which are not determined in the franchise, like rates, schedules and routes, and which matters are resolved in the process of issuance of permit by the administrative. (Secretary of Justice opn No. 45, s. 1981) Indeed, authorities are agreed that a certificate of public convenience and necessity is an authorization issued by the appropriate governmental agency for the operation of public services for which a franchise is required by law (Almario, Transportation and Public

Service Law, 1977 Ed., p. 293; Agbayani, Commercial Law of the Phil., Vol. 4, 1979 Ed., pp. 380-381). Based on the foregoing, it is clear that a franchise is the legislative authorization to engage in a business activity or enterprise of a public nature, whereas a certificate of public convenience and necessity is a regulatory measure which constitutes the franchise's authority to commence operations. It is thus logical that the grant of the former should precede the latter. Please be guided accordingly. (SGD.) SEDFREY A. ORDONEZSecretary of Justice Respondent GrandAir, on the other hand, relies on its interpretation of the provisions of Republic Act 776, which follows the pronouncements of the Court of Appeals in the cases of Avia Filipinas vs. Civil Aeronautics Board, and Silangan Airways, Inc. vs. Grand International Airways (supra). In both cases, the issue resolved was whether or not the Civil Aeronautics Board can issue the Certificate of Public Convenience and Necessity or Temporary Operating Permit to a prospective domestic air transport operator who does not possess a legislative franchise to operate as such. Relying on the Court's pronouncement in Albano vs. Reyes (supra), the Court of Appeals upheld the authority of the Board to issue such authority, even in the absence of a legislative franchise, which authority is derived from Section 10 of Republic Act 776, as amended by P.D. 1462. 11 The Civil Aeronautics Board has jurisdiction over GrandAir's Application for a Temporary Operating Permit. This rule has been established in the case of Philippine Air Lines Inc., vs. Civil Aeronautics Board, promulgated on June 13, 1968. 12 The Board is expressly authorized by Republic Act 776 to issue a temporary operating permit or Certificate of Public Convenience and Necessity, and nothing contained in the said law negates the power to issue said permit before the completion of the applicant's evidence and that of the oppositor thereto on the main petition. Indeed, the CAB's authority to grant a temporary permit "upon its own initiative" strongly suggests the power to exercise said authority, even before the presentation of said evidence has begun. Assuming arguendo that a legislative franchise is prerequisite to the issuance of a permit, the absence of the same does not affect the jurisdiction of the Board to hear the application, but tolls only upon the ultimate issuance of the requested permit. The power to authorize and control the operation of a public utility is admittedly a prerogative of the legislature, since Congress is that branch of government vested with plenary powers of legislation. The franchise is a legislative grant, whether made directly by the legislature itself, or by any one of its properly constituted instrumentalities. The grant, when made, binds the public, and is, directly or indirectly, the act of the state. 13 The issue in this petition is whether or not Congress, in enacting Republic Act 776, has delegated the authority to authorize the operation of domestic air transport services to the respondent Board, such that Congressional mandate for the approval of such authority is no longer necessary. Congress has granted certain administrative agencies the power to grant licenses for, or to authorize the operation of certain public utilities. 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 towards the delegation of greater powers by the legislature, and towards the approval of the practice by the courts. 14 It is generally recognized that a franchise may be derived indirectly from the state through a duly designated agency, and to this extent, the power to grant franchises has frequently been delegated, even to agencies other than those of a legislative nature. 15 In pursuance of this, it has been held that privileges conferred by grant by local authorities as agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the Legislature. 16 The trend of modern legislation is to vest the Public Service Commissioner with the power to regulate and control the operation of public services under reasonable rules and regulations, and as a general rule, courts will not interfere with the exercise of that discretion

when it is just and reasonable and founded upon a legal right. 17 It is this policy which was pursued by the Court in Albano vs. Reyes. Thus, a reading of the pertinent issuances governing the Philippine Ports Authority, 18 proves that the PPA is empowered to undertake by itself the operation and management of the Manila International Container Terminal, or to authorize its operation and management by another by contract or other means, at its option. The latter power having been delegated to the to PPA, a franchise from Congress to authorize an entity other than the PPA to operate and manage the MICP becomes unnecessary. Given the foregoing postulates, we find that the Civil Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air transport operator, who, though not possessing a legislative franchise, meets all the other requirements prescribed by the law. Such requirements were enumerated in Section 21 of R.A. 776. There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article XII recognizes Congress' control over any franchise, certificate or authority to operate a public utility, it does not mean Congress has exclusive authority to issue the same. Franchises issued by Congress are not required before each and every public utility may operate. 19 In many instances, Congress has seen it fit to delegate this function to government agencies, specialized particularly in their respective areas of public service. A reading of Section 10 of the same reveals the clear intent of Congress to delegate the authority to regulate the issuance of a license to operate domestic air transport services: Sec. 10. Powers and Duties of the Board. (A) Except as otherwise provided herein, the Board shall have the power to regulate the economic aspect of air transportation, and shall have general supervision and regulation of, the jurisdiction and control over air carriers, general sales agents, cargo sales agents, and air freight forwarders as well as their property rights, equipment, facilities and franchise, insofar as may be necessary for the purpose of carrying out the provision of this Act. In support of the Board's authority as stated above, it is given the following specific powers and duties: (C) The Board shall have the following specific powers and duties: (1) In accordance with the provisions of Chapter IV of this Act, to issue, deny, amend, revise, alter, modify, cancel, suspend or revoke in whole or in part upon petition or complaint or upon its own initiative any Temporary Operating Permit or Certificate of Public Convenience and Necessity: Provided however, That in the case of foreign air carriers, the permit shall be issued with the approval of the President of the Republic of the Philippines. Petitioner argues that since R.A. 776 gives the Board the authority to issue "Certificates of Public Convenience and Necessity", this, according to petitioner, means that a legislative franchise is an absolute requirement. It cites a number of authorities supporting the view that a Certificate of Public Convenience and Necessity is issued to a public service for which a franchise is required by law, as distinguished from a "Certificate of Public Convenience" which is an authorization issued for the operation of public services for which no franchise, either municipal or legislative, is required by law. 20 This submission relies on the premise that the authority to issue a certificate of public convenience and necessity is a regulatory measure separate and distinct from the authority to grant a franchise for the operation of the public utility subject of this particular case, which is exclusively lodged by petitioner in Congress. We do not agree with the petitioner. Many and varied are the definitions of certificates of public convenience which courts and legal writers have drafted. Some statutes use the terms "convenience and necessity" while others use only the words "public convenience." The terms "convenience and necessity", if used together in a statute, are usually held not to be separable, but are construed together. Both words modify each other

and must be construed together. The word 'necessity' is so connected, not as an additional requirement but to modify and qualify what might otherwise be taken as the strict significance of the word necessity. Public convenience and necessity exists when the proposed facility will meet a reasonable want of the public and supply a need which the existing facilities do not adequately afford. It does not mean or require an actual physical necessity or an indispensable thing. 21 The terms "convenience" and "necessity" are to be construed together, although they are not synonymous, and effect must be given both. The convenience of the public must not be circumscribed by according to the word "necessity" its strict meaning or an essential requisites. 22 The use of the word "necessity", in conjunction with "public convenience" in a certificate of authorization to a public service entity to operate, does not in any way modify the nature of such certification, or the requirements for the issuance of the same. It is the law which determines the requisites for the issuance of such certification, and not the title indicating the certificate. Congress, by giving the respondent Board the power to issue permits for the operation of domestic transport services, has delegated to the said body the authority to determine the capability and competence of a prospective domestic air transport operator to engage in such venture. This is not an instance of transforming the respondent Board into a mini-legislative body, with unbridled authority to choose who should be given authority to operate domestic air transport services. To be valid, the delegation itself must be circumscribed by legislative restrictions, not a "roving commission" that will give the delegate unlimited legislative authority. It must not be a delegation "running riot" and "not canalized with banks that keep it from overflowing." Otherwise, the delegation is in legal effect an abdication of legislative authority, a total surrender by the legislature of its prerogatives in favor of the delegate. 23 Congress, in this instance, has set specific limitations on how such authority should be exercised. Firstly, Section 4 of R.A. No. 776, as amended, sets out the following guidelines or policies: Sec. 4. Declaration of policies. In the exercise and performance of its powers and duties under this Act, the Civil Aeronautics Board and the Civil Aeronautics Administrator shall consider the following, among other things, as being in the public interest, and in accordance with the public convenience and necessity: (a) The development and utilization of the air potential of the Philippines; (b) The encouragement and development of an air transportation system properly adapted to the present and future of foreign and domestic commerce of the Philippines, of the Postal Service and of the National Defense; (c) The regulation of air transportation in such manner as to recognize and preserve the inherent advantages of, assure the highest degree of safety in, and foster sound economic condition in, such transportation, and to improve the relations between, and coordinate transportation by, air carriers; (d) The promotion of adequate, economical and efficient service by air carriers at reasonable charges, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices; (e) Competition between air carriers to the extent necessary to assure the sound development of an air transportation system properly adapted to the need of the foreign and domestic commerce of the Philippines, of the Postal Service, and of the National Defense; (f) To promote safety of flight in air commerce in the Philippines; and, (g) The encouragement and development of civil aeronautics. More importantly, the said law has enumerated the requirements to determine the competency of a prospective operator to engage in the public service of air transportation. Sec. 12. Citizenship requirement. Except as otherwise provided in the Constitution and existing treaty or treaties, a permit authorizing a

person to engage in domestic air commerce and/or air transportation shall be issued only to citizens of the Philippines 24 Sec. 21. Issuance of permit. The Board shall issue a permit authorizing the whole or any part of the service covered by the application, if it finds: (1) that the applicant is fit, willing and able to perform such service properly in conformity with the provisions of this Act and the rules, regulations, and requirements issued thereunder; and (2) that such service is required by the public convenience and necessity; otherwise the application shall be denied. Furthermore, the procedure for the processing of the application of a Certificate of Public Convenience and Necessity had been established to ensure the weeding out of those entities that are not deserving of public service. 25 In sum, respondent Board should now be allowed to continue hearing the application of GrandAir for the issuance of a Certificate of Public Convenience and Necessity, there being no legal obstacle to the exercise of its jurisdiction. ACCORDINGLY, in view of the foregoing considerations, the Court RESOLVED to DISMISS the instant petition for lack of merit. The respondent Civil Aeronautics Board is hereby DIRECTED to CONTINUE hearing the application of respondent Grand International Airways, Inc. for the issuance of a Certificate of Public Convenience and Necessity. SO ORDERED.

SEC. 4. The violations of any of the provisions of this Act or of the regulations, orders and decrees promulgated in accordance therewith shall be punished by a fine of not more than five thousands pesos, or by imprisonment for not more than two years, or both, in the discretion of the court: Provided, That in the case of companies or corporations the manager or administrator shall be criminally liable. SEC. 7. At any time that the Governor-General, with the consent of the Council of State, shall consider that the public interest requires the application of the provisions of this Act, he shall so declare by proclamation, and any provisions of other laws inconsistent herewith shall from then on be temporarily suspended. Upon the cessation of the reasons for which such proclamation was issued, the Governor-General, with the consent of the Council of State, shall declare the application of this Act to have likewise terminated, and all laws temporarily suspended by virtue of the same shall again take effect, but such termination shall not prevent the prosecution of any proceedings or cause begun prior to such termination, nor the filing of any proceedings for an offense committed during the period covered by the Governor-General's proclamation. August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should be sold. August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him with the sale of rice at an excessive price as follows: The undersigned accuses Ang Tang Ho of a violation of Executive Order No. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, in relation with the provisions of sections 1, 2 and 4 of Act No. 2868, committed as follows: That on or about the 6th day of August, 1919, in the city of Manila, Philippine Islands, the said Ang Tang Ho, voluntarily, illegally and criminally sold to Pedro Trinidad, one ganta of rice at the price of eighty centavos (P.80), which is a price greater than that fixed by Executive Order No. 53 of the Governor-General of the Philippines, dated the 1st of August, 1919, under the authority of section 1 of Act No. 2868. Contrary to law. Upon this charge, he was tried, found guilty and sentenced to five months' imprisonment and to pay a fine of P500, from which he appealed to this court, claiming that the lower court erred in finding Executive Order No. 53 of 1919, to be of any force and effect, in finding the accused guilty of the offense charged, and in imposing the sentence. The official records show that the Act was to take effect on its approval; that it was approved July 30, 1919; that the GovernorGeneral issued his proclamation on the 1st of August, 1919; and that the law was first published on the 13th of August, 1919; and that the proclamation itself was first published on the 20th of August, 1919. The question here involves an analysis and construction of Act No. 2868, in so far as it authorizes the Governor-General to fix the price at which rice should be sold. It will be noted that section 1 authorizes the Governor-General, with the consent of the Council of State, for any cause resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate temporary rules and emergency measures for carrying out the purposes of the Act. By its very terms, the promulgation of temporary rules and emergency measures is left to the discretion of the Governor-General. The Legislature does not undertake to specify or define under what conditions or for what reasons the Governor-General shall issue the proclamation, but says that it may be issued "for any cause," and leaves the question as to what is "any cause" to the discretion of the Governor-General. The Act also says: "For any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or corn." The Legislature does not specify or define what is "an extraordinary rise." That is also left to the discretion of the Governor-General. The Act also says that the Governor-General, "with the consent of the Council of State," is authorized to issue and promulgate "temporary rules and emergency measures for carrying out the purposes of this Act." It does not specify or define what is a temporary rule or an emergency measure, or how long such temporary rules or emergency measures shall remain in force and effect, or when they shall take effect. That is to say, the Legislature itself has not in any manner specified or defined any basis for the order, but has left it to the sole judgement and discretion of the

G.R. No. 17122

February 27, 1922

THE UNITED STATES, plaintiff-appellee, vs.ANG TANG HO, defendant-appellant. Williams & Ferrier for appellant.Acting Attorney-General Tuason for appellee. JOHNS, J.: At its special session of 1919, the Philippine Legislature passed Act No. 2868, entitled "An Act penalizing the monopoly and holding of, and speculation in, palay, rice, and corn under extraordinary circumstances, regulating the distribution and sale thereof, and authorizing the Governor-General, with the consent of the Council of State, to issue the necessary rules and regulations therefor, and making an appropriation for this purpose," the material provisions of which are as follows: Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate, with the consent of the Council of State, temporary rules and emergency measures for carrying out the purpose of this Act, to wit: (a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn. (b) To establish and maintain a government control of the distribution or sale of the commodities referred to or have such distribution or sale made by the Government itself. (c) To fix, from time to time the quantities of palay rice, or corn that a company or individual may acquire, and the maximum sale price that the industrial or merchant may demand. (d) . . . SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other manner obstruct the production or milling of palay, rice or corn for the purpose of raising the prices thereof; to corner or hoard said products as defined in section three of this Act; . . . Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or corn within the meaning of this Act, but does not specify the price of rice or define any basic for fixing the price.

Governor-General to say what is or what is not "a cause," and what is or what is not "an extraordinary rise in the price of rice," and as to what is a temporary rule or an emergency measure for the carrying out the purposes of the Act. Under this state of facts, if the law is valid and the Governor-General issues a proclamation fixing the minimum price at which rice should be sold, any dealer who, with or without notice, sells rice at a higher price, is a criminal. There may not have been any cause, and the price may not have been extraordinary, and there may not have been an emergency, but, if the Governor-General found the existence of such facts and issued a proclamation, and rice is sold at any higher price, the seller commits a crime. By the organic law of the Philippine Islands and the Constitution of the United States all powers are vested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; of the Executive to execute the law; and of the Judiciary to construe the law. The Legislature has no authority to execute or construe the law, the Executive has no authority to make or construe the law, and the Judiciary has no power to make or execute the law. Subject to the Constitution only, the power of each branch is supreme within its own jurisdiction, and it is for the Judiciary only to say when any Act of the Legislature is or is not constitutional. Assuming, without deciding, that the Legislature itself has the power to fix the price at which rice is to be sold, can it delegate that power to another, and, if so, was that power legally delegated by Act No. 2868? In other words, does the Act delegate legislative power to the Governor-General? By the Organic Law, all Legislative power is vested in the Legislature, and the power conferred upon the Legislature to make laws cannot be delegated to the Governor-General, or any one else. The Legislature cannot delegate the legislative power to enact any law. If Act no 2868 is a law unto itself and within itself, and it does nothing more than to authorize the Governor-General to make rules and regulations to carry the law into effect, then the Legislature itself created the law. There is no delegation of power and it is valid. On the other hand, if the Act within itself does not define crime, and is not a law, and some legislative act remains to be done to make it a law or a crime, the doing of which is vested in the Governor-General, then the Act is a delegation of legislative power, is unconstitutional and void. The Supreme Court of the United States in what is known as the Granger Cases (94 U.S., 183-187; 24 L. ed., 94), first laid down the rule: Railroad companies are engaged in a public employment affecting the public interest and, under the decision in Munn vs. Ill., ante, 77, are subject to legislative control as to their rates of fare and freight unless protected by their charters. The Illinois statute of Mar. 23, 1874, to establish reasonable maximum rates of charges for the transportation of freights and passengers on the different railroads of the State is not void as being repugnant to the Constitution of the United States or to that of the State. It was there for the first time held in substance that a railroad was a public utility, and that, being a public utility, the State had power to establish reasonable maximum freight and passenger rates. This was followed by the State of Minnesota in enacting a similar law, providing for, and empowering, a railroad commission to hear and determine what was a just and reasonable rate. The constitutionality of this law was attacked and upheld by the Supreme Court of Minnesota in a learned and exhaustive opinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul ry. Co. (38 Minn., 281), in which the court held: Regulations of railway tariffs Conclusiveness of commission's tariffs . Under Laws 1887, c. 10, sec. 8, the determination of the railroad and warehouse commission as to what are equal and reasonable fares and rates for the transportation of persons and property by a railway company is conclusive, and, in proceedings by mandamus to compel compliance with the tariff of rates recommended and published by them, no issue can be raised or inquiry had on that question. Same constitution Delegation of power to commission. The authority thus given to the commission to determine, in the exercise of their discretion and judgement, what are equal and reasonable rates, is not a delegation of legislative power. It will be noted that the law creating the railroad commission expressly provides

That all charges by any common carrier for the transportation of passengers and property shall be equal and reasonable. With that as a basis for the law, power is then given to the railroad commission to investigate all the facts, to hear and determine what is a just and reasonable rate. Even then that law does not make the violation of the order of the commission a crime. The only remedy is a civil proceeding. It was there held That the legislative itself has the power to regulate railroad charges is now too well settled to require either argument or citation of authority. The difference between the power to say what the law shall be, and the power to adopt rules and regulations, or to investigate and determine the facts, in order to carry into effect a law already passed, is apparent. 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 the conferring an authority or discretion to be exercised under and in pursuance of the law. The legislature enacts that all freights rates and passenger fares should be just and reasonable. It had the undoubted power to fix these rates at whatever it deemed equal and reasonable. They have not delegated to the commission any authority or discretion as to what the law shall be, which would not be allowable, but have merely conferred upon it an authority and discretion, to be exercised in the execution of the law, and under and in pursuance of it, which is entirely permissible. The legislature itself has passed upon the expediency of the law, and what is shall be. The commission is intrusted with no authority or discretion upon these questions. It can neither make nor unmake a single provision of law. It is merely charged with the administration of the law, and with no other power. The delegation of legislative power was before the Supreme Court of Wisconsin in Dowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion says: "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." 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 maters 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 confirmity to which all fire insurance policies were required to be issued. 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 judgement 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. The delegation of legislative power was before the Supreme Court in United States vs. Grimaud (220 U.S., 506; 55 L. ed., 563), where it was held that the rules and regulations of the Secretary of Agriculture as to a trespass on government land in a forest reserve were valid constitutional. The Act there provided that the Secretary of Agriculture ". . . may make such rules and regulations and establish such service as will insure the object of such reservations; namely, to regulate their occupancy and use, and to preserve the forests thereon from destruction; and any violation of the provisions of this act or such rules and regulations shall be punished, . . ." The brief of the United States Solicitor-General says: In refusing permits to use a forest reservation for stock grazing, except upon stated terms or in stated ways, the Secretary of Agriculture merely assert and enforces the proprietary right of the United States over land which it owns. The regulation of the Secretary, therefore, is not an exercise of legislative, or even of administrative, power; but is an ordinary and legitimate refusal of the landowner's authorized agent

to allow person having no right in the land to use it as they will. The right of proprietary control is altogether different from governmental authority. The opinion says: From the beginning of the government, various acts have been passed conferring upon executive officers power to make rules and regulations, not for the government of their departments, but for administering the laws which did govern. None of these statutes could confer legislative power. But when Congress had legislated power. But when Congress had legislated and indicated its will, it could give to those who were to act under such general provisions "power to fill up the details" by the establishment of administrative rules and regulations, the violation of which could be punished by fine or imprisonment fixed by Congress, or by penalties fixed by Congress, or measured by the injury done. That "Congress cannot delegate legislative power is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution." If, after the passage of the act and the promulgation of the rule, the defendants drove and grazed their sheep upon the reserve, in violation of the regulations, they were making an unlawful use of the government's property. In doing so they thereby made themselves liable to the penalty imposed by Congress. The subjects as to which the Secretary can regulate are defined. The lands are set apart as a forest reserve. He is required to make provisions to protect them from depredations and from harmful uses. He is authorized 'to regulate the occupancy and use and to preserve the forests from destruction.' A violation of reasonable rules regulating the use and occupancy of the property is made a crime, not by the Secretary, but by Congress." The above are leading cases in the United States on the question of delegating legislative power. It will be noted that in the "Granger Cases," it was held that a railroad company was a public corporation, and that a railroad was a public utility, and that, for such reasons, the legislature had the power to fix and determine just and reasonable rates for freight and passengers. The Minnesota case held that, so long as the rates were just and reasonable, the legislature could delegate the power to ascertain the facts and determine from the facts what were just and reasonable rates,. and that in vesting the commission with such power was not a delegation of legislative power. The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of fire insurance," and the court held that "the act, . . . 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." The case of the United States Supreme Court, supra dealt with rules and regulations which were promulgated by the Secretary of Agriculture for Government land in the forest reserve. These decisions hold that the legislative only can enact a law, and that it cannot delegate it legislative authority. The line of cleavage between what is and what is not a delegation of legislative power is pointed out and clearly defined. As the Supreme Court of Wisconsin says: That no part of the legislative power can be delegated by the legislature to any other department of the government, executive or judicial, is a fundamental principle in constitutional law, essential to the integrity and maintenance of the system of government established by the constitution. Where an act is clothed with all the forms of law, and is complete in and of itself, it may be provided that it shall become operative only upon some certain act or event, or, in like manner, that its operation shall be suspended. The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of

things upon which the law makes, or intends to make, its own action to depend. The Village of Little Chute enacted an ordinance which provides: All saloons in said village shall be closed at 11 o'clock P.M. each day and remain closed until 5 o'clock on the following morning, unless by special permission of the president. Construing it in 136 Wis., 526; 128 A. S. R., 1100, 1 the Supreme Court of that State says: We regard the ordinance as void for two reasons; First, because it attempts to confer arbitrary power upon an executive officer, and allows him, in executing the ordinance, to make unjust and groundless discriminations among persons similarly situated; second, because the power to regulate saloons is a law-making power vested in the village board, which cannot be delegated. A legislative body cannot delegate to a mere administrative officer power to make a law, but it can make a law with provisions that it shall go into effect or be suspended in its operations upon the ascertainment of a fact or state of facts by an administrative officer or board. In the present case the ordinance by its terms gives power to the president to decide arbitrary, and in the exercise of his own discretion, when a saloon shall close. This is an attempt to vest legislative discretion in him, and cannot be sustained. The legal principle involved there is squarely in point here. It must be conceded that, after the passage of act No. 2868, and before any rules and regulations were promulgated by the GovernorGeneral, a dealer in rice could sell it at any price, even at a peso per "ganta," and that he would not commit a crime, because there would be no law fixing the price of rice, and the sale of it at any price would not be a crime. That is to say, in the absence of a proclamation, it was not a crime to sell rice at any price. Hence, it must follow that, if the defendant committed a crime, it was because the Governor-General issued the proclamation. There was no act of the Legislature making it a crime to sell rice at any price, and without the proclamation, the sale of it at any price was to a crime. The Executive order2 provides: (5) The maximum selling price of palay, rice or corn is hereby fixed, for the time being as follows: In Manila Palay at P6.75 per sack of 57 kilos, or 29 centavos per ganta. Rice at P15 per sack of 57 kilos, or 63 centavos per ganta. Corn at P8 per sack of 57 kilos, or 34 centavos per ganta. In the provinces producing palay, rice and corn, the maximum price shall be the Manila price less the cost of transportation from the source of supply and necessary handling expenses to the place of sale, to be determined by the provincial treasurers or their deputies. In provinces, obtaining their supplies from Manila or other producing provinces, the maximum price shall be the authorized price at the place of supply or the Manila price as the case may be, plus the transportation cost, from the place of supply and the necessary handling expenses, to the place of sale, to be determined by the provincial treasurers or their deputies. (6) Provincial treasurers and their deputies are hereby directed to communicate with, and execute all instructions emanating from the Director of Commerce and Industry, for the most effective and proper enforcement of the above regulations in their respective localities. The law says that the Governor-General may fix "the maximum sale price that the industrial or merchant may demand." The law is a general law and not a local or special law. The proclamation undertakes to fix one price for rice in Manila and other and different prices in other and different provinces in the Philippine Islands, and delegates the power to determine the other and different prices to provincial treasurers and their deputies. Here, then, you would have a delegation of legislative power to the GovernorGeneral, and a delegation by him of that power to provincial treasurers and their deputies, who "are hereby directed to communicate with, and execute all instructions emanating from the Director of Commerce and

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Industry, for the most effective and proper enforcement of the above regulations in their respective localities." The issuance of the proclamation by the Governor-General was the exercise of the delegation of a delegated power, and was even a sub delegation of that power. Assuming that it is valid, Act No. 2868 is a general law and does not authorize the Governor-General to fix one price of rice in Manila and another price in Iloilo. It only purports to authorize him to fix the price of rice in the Philippine Islands under a law, which is General and uniform, and not local or special. Under the terms of the law, the price of rice fixed in the proclamation must be the same all over the Islands. There cannot be one price at Manila and another at Iloilo. Again, it is a mater of common knowledge, and of which this court will take judicial notice, that there are many kinds of rice with different and corresponding market values, and that there is a wide range in the price, which varies with the grade and quality. Act No. 2868 makes no distinction in price for the grade or quality of the rice, and the proclamation, upon which the defendant was tried and convicted, fixes the selling price of rice in Manila "at P15 per sack of 57 kilos, or 63 centavos per ganta," and is uniform as to all grades of rice, and says nothing about grade or quality. Again, it will be noted that the law is confined to palay, rice and corn. They are products of the Philippine Islands. Hemp, tobacco, coconut, chickens, eggs, and many other things are also products. Any law which single out palay, rice or corn from the numerous other products of the Islands is not general or uniform, but is a local or special law. If such a law is valid, then by the same principle, the Governor-General could be authorized by proclamation to fix the price of meat, eggs, chickens, coconut, hemp, and tobacco, or any other product of the Islands. In the very nature of things, all of that class of laws should be general and uniform. Otherwise, there would be an unjust discrimination of property rights, which, under the law, must be equal and inform. Act No. 2868 is nothing more than a floating law, which, in the discretion and by a proclamation of the Governor-General, makes it a floating crime to sell rice at a price in excess of the proclamation, without regard to grade or quality. When Act No. 2868 is analyzed, it is the violation of the proclamation of the Governor-General which constitutes the crime. Without that proclamation, it was no crime to sell rice at any price. In other words, the Legislature left it to the sole discretion of the Governor-General to say what was and what was not "any cause" for enforcing the act, and what was and what was not "an extraordinary rise in the price of palay, rice or corn," and under certain undefined conditions to fix the price at which rice should be sold, without regard to grade or quality, also to say whether a proclamation should be issued, if so, when, and whether or not the law should be enforced, how long it should be enforced, and when the law should be suspended. The Legislature did not specify or define what was "any cause," or what was "an extraordinary rise in the price of rice, palay or corn," Neither did it specify or define the conditions upon which the proclamation should be issued. In the absence of the proclamation no crime was committed. The alleged sale was made a crime, if at all, because the Governor-General issued the proclamation. The act or proclamation does not say anything about the different grades or qualities of rice, and the defendant is charged with the sale "of one ganta of rice at the price of eighty centavos (P0.80) which is a price greater than that fixed by Executive order No. 53." We are clearly of the opinion and hold that Act No. 2868, in so far as it undertakes to authorized the Governor-General in his discretion to issue a proclamation, fixing the price of rice, and to make the sale of rice in violation of the price of rice, and to make the sale of rice in violation of the proclamation a crime, is unconstitutional and void. It may be urged that there was an extraordinary rise in the price of rice and profiteering, which worked a severe hardship on the poorer classes, and that an emergency existed, but the question here presented is the constitutionality of a particular portion of a statute, and none of such matters is an argument for, or against, its constitutionality. The Constitution is something solid, permanent an substantial. Its stability protects the life, liberty and property rights of the rich and the poor alike, and that protection ought not to change with the wind or any emergency condition. The fundamental question involved in this case is the right of the people of the Philippine Islands to be and live under a

republican form of government. We make the broad statement that no state or nation, living under republican form of government, under the terms and conditions specified in Act No. 2868, has ever enacted a law delegating the power to any one, to fix the price at which rice should be sold. That power can never be delegated under a republican form of government. In the fixing of the price at which the defendant should sell his rice, the law was not dealing with government property. It was dealing with private property and private rights, which are sacred under the Constitution. If this law should be sustained, upon the same principle and for the same reason, the Legislature could authorize the GovernorGeneral to fix the price of every product or commodity in the Philippine Islands, and empower him to make it a crime to sell any product at any other or different price. It may be said that this was a war measure, and that for such reason the provision of the Constitution should be suspended. But the Stubborn fact remains that at all times the judicial power was in full force and effect, and that while that power was in force and effect, such a provision of the Constitution could not be, and was not, suspended even in times of war. It may be claimed that during the war, the United States Government undertook to, and did, fix the price at which wheat and flour should be bought and sold, and that is true. There, the United States had declared war, and at the time was at war with other nations, and it was a war measure, but it is also true that in doing so, and as a part of the same act, the United States commandeered all the wheat and flour, and took possession of it, either actual or constructive, and the government itself became the owner of the wheat and flour, and fixed the price to be paid for it. That is not this case. Here the rice sold was the personal and private property of the defendant, who sold it to one of his customers. The government had not bought and did not claim to own the rice, or have any interest in it, and at the time of the alleged sale, it was the personal, private property of the defendant. It may be that the law was passed in the interest of the public, but the members of this court have taken on solemn oath to uphold and defend the Constitution, and it ought not to be construed to meet the changing winds or emergency conditions. Again, we say that no state or nation under a republican form of government ever enacted a law authorizing any executive, under the conditions states, to fix the price at which a price person would sell his own rice, and make the broad statement that no decision of any court, on principle or by analogy, will ever be found which sustains the constitutionality of the particular portion of Act No. 2868 here in question. By the terms of the Organic Act, subject only to constitutional limitations, the power to legislate and enact laws is vested exclusively in the Legislative, which is elected by a direct vote of the people of the Philippine Islands. As to the question here involved, the authority of the Governor-General to fix the maximum price at which palay, rice and corn may be sold in the manner power in violation of the organic law. This opinion is confined to the particular question here involved, which is the right of the Governor-General, upon the terms and conditions stated in the Act, to fix the price of rice and make it a crime to sell it at a higher price, and which holds that portions of the Act unconstitutional. It does not decide or undertake to construe the constitutionality of any of the remaining portions of the Act. The judgment of the lower court is reversed, and the defendant discharged. So ordered.

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.

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 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 preCommonwealth 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

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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 nonimpairment 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 nondelegation of legislative power. Such administrative order, which took effect on April 17, 1970, has a provision on reflectors in effect

13

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 nondelegation 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-fromformidable, 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.

14

G.R. No. L-23825

December 24, 1965

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 delegate 2 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.

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.

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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, 258359); 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,

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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.

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

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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

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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

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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 provision 17 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 ruled 18 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 States 23 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.

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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 oftrade, 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 handsoff 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%.

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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 anticompetitive 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

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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 antitrust 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

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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 40day 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.

G.R. No. 76633 October 18, 1988 EASTERN SHIPPING LINES, INC., petitioner, vs.PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents. Jimenea, Dala & Zaragoza Law Office for petitioner. The Solicitor General for public respondent. Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.: The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment Administration (POEA) for the death of her husband. The decision is challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the case as the husband was not an overseas worker. Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses. The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the ground of non-exhaustion of administrative remedies. Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on the theory inter alia that the

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agency should be given an opportunity to correct the errors, if any, of its subordinates. This case comes under one of the exceptions, however, as the questions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondent himself has not objected to the petitioner's direct resort to this Court, observing that the usual procedure would delay the disposition of the case to her prejudice. The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "original and exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law or contract involving Filipino contract workers, including seamen." These cases, according to the 1985 Rules and Regulations on Overseas Employment issued by the POEA, include "claims for death, disability and other benefits" arising out of such employment. 2 The petitioner does not contend that Saco was not its employee or that the claim of his widow is not compensable. What it does urge is that he was not an overseas worker but a 'domestic employee and consequently his widow's claim should have been filed with Social Security System, subject to appeal to the Employees Compensation Commission. We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the petitioner at the time he met with the fatal accident in Japan in 1985. Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. 3 A contract worker is described as "any person working or who has worked overseas under a valid employment contract and shall include seamen" 4 or "any person working overseas or who has been employed by another which may be a local employer, foreign employer, principal or partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6 It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The second is its payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers." Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature, described the subject of the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the light of the petitioner's own previous acts, that the petitioner and the Fund to which it had made contributions considered Saco to be an overseas employee. The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air Lines who, although working abroad in its international flights, are not considered overseas workers. If this be so, the petitioner should not have found it necessary to submit its shipping articles to the POEA for processing, formalization and approval or to contribute to the Welfare Fund which is available only to overseas workers. Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the definitions given be considered seamen nor are their appointments coursed through the POEA. The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984. This

circular prescribed a standard contract to be adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier been required by the National Seamen Board and had been sustained in a number of cases by this Court. 10 The petitioner claims that it had never entered into such a contract with the deceased Saco, but that is hardly a serious argument. In the first place, it should have done so as required by the circular, which specifically declared that "all parties to the employment of any Filipino seamen on board any ocean-going vessel are advised to adopt and use this employment contract effective 01 February 1984 and to desist from using any other format of employment contract effective that date." In the second place, even if it had not done so, the provisions of the said circular are nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. 11 But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of legislative power. It contends that no authority had been given the POEA to promulgate the said regulation; and even with such authorization, the regulation represents an exercise of legislative discretion which, under the principle, is not subject to delegation. The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading as follows: ... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary rules and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA). Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself prescribed a standard shipping contract substantially the same as the format adopted by the POEA. The second challenge is more serious as it is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held: We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase " may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a 'roving commission a wide and sweeping authority that is not canalized within banks that keep it from overflowing,' in short a clearly profligate and therefore invalid delegation of legislative powers. 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 legislature such that when it reaches the delegate the only thing he will have to do is enforce it. 13 Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot. 14 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 principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case

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of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception. The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in the particular fields assigned to them. The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation." With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the details which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law. Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has been applied in a significant number of the cases without challenge by the employer. The power of the POEA (and before it the National Seamen Board) in requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority. That standard is discoverable in the executive order itself which, in creating the Philippine Overseas Employment Administration, mandated it to protect the rights of overseas Filipino workers to "fair and equitable employment practices." Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the "sense and experience of men" was accepted in Mutual Film Corp. v. Industrial Commission , 19 and "national security" in Hirabayashi v. United States. 20 It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under Memorandum Circular No. 2, Series of 1984, that Section C. Compensation and Benefits. 1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiaries the amount of: a. P220,000.00 for master and chief engineers b. P180,000.00 for other officers, including radio operators and master electrician c. P 130,000.00 for ratings. 2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will be in addition to whatever

benefits which the seaman is entitled to under Philippine laws. ... 3. ... c. If the remains of the seaman is buried in the Philippines, the owners shall pay the beneficiaries of the seaman an amount not exceeding P18,000.00 for burial expenses. The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National Seamen Board on July 12,1976, providing an follows: Income Benefits under this Rule Shall be Considered Additional Benefits. All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (Employees Compensation and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or allowances that the seaman or his beneficiaries may be entitled to under the employment contract approved by the NSB. If applicable, all benefits under the Social Security Law and the Philippine Medicare Law shall be enjoyed by the seaman or his beneficiaries in accordance with such laws. The above provisions are manifestations of the concern of the State for the working class, consistently with the social justice policy and the specific provisions in the Constitution for the protection of the working class and the promotion of its interest. One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due process because the same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is an uninformed criticism of administrative law itself. Administrative agencies are vested with two basic powers, the quasilegislative and the quasi-judicial. The first enables them to promulgate implementing rules and regulations, and the second enables them to interpret and apply such regulations. Examples abound: the Bureau of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars, the Securities and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board and the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their respective administrative regulations. Such an arrangement has been accepted as a fact of life of modern governments and cannot be considered violative of due process as long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed. Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line with the express mandate of the Labor Code and the principle that those with less in life should have more in law. When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can negotiate on even plane. Labor is not a mere employee of capital but its active and equal partner. WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

G.R. No. L-34674

October 26, 1931

MAURICIO CRUZ, petitioner-appellant, vs.STANTON YOUNGBERG, Director of the Bureau of Animal Industry, respondent-appellee. Jose Yulo for appellant.Office of the Solicitor-General Reyes for appellee. OSTRAND, J.:

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 This is a petition brought originally before the Court of First Instance of Manila for the issuance of a writ of mandatory injunction against the respondent, Stanton Youngberg, as Director of the Bureau of Animal Industry, requiring him to issue a permit for the landing of ten large cattle imported by the petitioner and for the slaughter thereof. The petitioner attacked the constitutionality of Act No. 3155, which at present prohibits the importation of cattle from foreign countries into the Philippine Islands. Among other things in the allegation of the petition, it is asserted that "Act No. 3155 of the Philippine Legislature was enacted for the sole purpose of preventing the introduction of cattle diseases into the Philippine Islands from foreign countries, as shown by an explanatory note and text of Senate Bill No. 328 as introduced in the Philippine Legislature, ... ." The Act in question reads as follows: SECTION 1. After March thirty-first, nineteen hundred and twenty-five existing contracts for the importation of cattle into this country to the contrary notwithstanding, it shall be strictly prohibited to import, bring or introduce into the Philippine Islands any cattle from foreign countries: Provided, however, That at any time after said date, the Governor-General, with the concurrence of the presiding officers of both Houses, may raise such prohibition entirely or in part if the conditions of the country make this advisable or if decease among foreign cattle has ceased to be a menace to the agriculture and live stock of the lands. SEC. 2. All acts or parts of acts inconsistent with this Act are hereby repealed. SEC. 3. This Act shall take effect on its approval. Approved, March 8, 1924. The respondent demurred to the petition on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was based on two reasons, namely, (1) that if Act No. 3155 were declared unconstitutional and void, the petitioner would not be entitled to the relief demanded because Act No. 3052 would automatically become effective and would prohibit the respondent from giving the permit prayed for; and (2) that Act No. 3155 was constitutional and, therefore, valid. The court sustained the demurrer and the complaint was dismissed by reason of the failure of the petitioner to file another complaint. From that order of dismissal, the petitioner appealed to this court. The appellee contends that even if Act No. 3155 be declared unconstitutional by the fact alleged by the petitioner in his complaint, still the petitioner can not be allowed to import cattle from Australia for the reason that, while Act No. 3155 were declared unconstitutional, Act No. 3052 would automatically become effective. Act No. 3052 reads as follows: SECTION 1. Section seventeen hundred and sixty-two of Act Numbered Twenty-seven hundred and eleven, known as the Administrative Code, is hereby amended to read as follows: "SEC. 1762. Bringing of animals imported from foreign countries into the Philippine Islands. It shall be unlawful for any person or corporation to import, bring or introduce live cattle into the Philippine Islands from any foreign country. The Director of Agriculture may, with the approval of the head of the department first had, authorize the importation, bringing or introduction of various classes of thoroughbred cattle from foreign countries for breeding the same to the native cattle of these Islands, and such as may be necessary for the improvement of the breed, not to exceed five hundred head per annum: Provided, however, That the Director of Agriculture shall in all cases permit the importation, bringing or introduction of draft cattle and bovine cattle for the manufacture of serum: Provided, further, That all live cattle from foreign countries the importation, bringing or introduction of which into the Islands is authorized by this Act, shall be submitted to regulations issued by the Director of Agriculture, with the approval of the head of the department, prior to authorizing its transfer to other provinces. "At the time of the approval of this Act, the Governor-General shall issue regulations and others to provide against a raising of the price of both fresh and refrigerated meat. The Governor-General also may, by executive order, suspend, this prohibition for a fixed period in

case local conditions require it." SEC. 2. This Act shall take effect six months after approval. Approved, March 14, 1922. The petitioner does not present any allegations in regard to Act No. 3052 to show its nullity or unconstitutionality though it appears clearly that in the absence of Act No. 3155 the former act would make it impossible for the Director of the Bureau of Animal Industry to grant the petitioner a permit for the importation of the cattle without the approval of the head of the corresponding department. An unconstitutional statute can have no effect to repeal former laws or parts of laws by implication, since, being void, it is not inconsistent with such former laws. (I Lewis Sutherland, Statutory Construction 2nd ed., p. 458, citing McAllister vs. Hamlin, 83 Cal., 361; 23 Pac., 357; Orange Country vs. Harris, 97 Cal., 600; 32 Pac., 594; Carr vs. State, 127 Ind., 204; 11 L.R.A., 370, etc.) This court has several times declared that it will not pass upon the constitutionality of statutes unless it is necessary to do so (McGirr vs. Hamilton and Abreu, 30 Phil., 563, 568; Walter E. Olsen & Co. vs. Aldanese and Trinidad, 43 Phil., 259) but in this case it is not necessary to pass upon the validity of the statute attacked by the petitioner because even if it were declared unconstitutional, the petitioner would not be entitled to relief inasmuch as Act No. 3052 is not in issue. But aside from the provisions of Act No. 3052, we are of the opinion that Act No. 3155 is entirely valid. As shown in paragraph 8 of the amended petition, the Legislature passed Act No. 3155 to protect the cattle industry of the country and to prevent the introduction of cattle diseases through importation of foreign cattle. It is now generally recognized that the promotion of industries affecting the public welfare and the development of the resources of the country are objects within the scope of the police power (12 C.J., 927; 6 R.C.L., 203-206 and decisions cited therein; Reid vs. Colorado, 187 U.S., 137, 147, 152; Yeazel vs. Alexander, 58 Ill., 254). In this connection it is said in the case of Punzalan vs. Ferriols and Provincial Board of Batangas (19 Phil., 214), that the provisions of the Act of Congress of July 1, 1902, did not have the effect of denying to the Government of the Philippine Islands the right to the exercise of the sovereign police power in the promotion of the general welfare and the public interest. The facts recited in paragraph 8 of the amended petition shows that at the time the Act No. 3155 was promulgated there was reasonable necessity therefor and it cannot be said that the Legislature exceeded its power in passing the Act. That being so, it is not for this court to avoid or vacate the Act upon constitutional grounds nor will it assume to determine whether the measures are wise or the best that might have been adopted. (6 R.C.L., 243 and decisions cited therein.)1awphil.net In his third assignment of error the petitioner claims that "The lower court erred in not holding that the power given by Act No. 3155 to the Governor-General to suspend or not, at his discretion, the prohibition provided in the act constitutes an unlawful delegation of the legislative powers." We do not think that such is the case; as Judge Ranney of the Ohio Supreme Court in Cincinnati, Wilmington and Zanesville Railroad Co. vs. Commissioners of Clinton County (1 Ohio St., 77, 88) said in such case: The true distinction, therefore, 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. Under his fourth assignment of error the appellant argues that Act No. 3155 amends section 3 of the Tariff Law, but it will be noted that Act No. 3155 is not an absolute prohibition of the importation of cattle and it does not add any provision to section 3 of the Tariff Law. As stated in the brief of the Attorney-General: "It is a complete statute in itself. It does not make any reference to the Tariff Law. It does not permit the importation of articles, whose importation is prohibited by the Tariff Law. It is not a tariff measure but a quarantine measure, a statute adopted under the police power of the Philippine Government. It is at most a `supplement' or an `addition' to the Tariff Law. (See MacLeary vs. Babcock, 82 N.E., 453, 455; 169 Ind., 228 for distinction between `supplemental' and `amendatory' and O'Pry vs. U.S., 249

27

U.S., 323; 63 Law. ed., 626, for distinction between `addition' and `amendment.')" The decision appealed from is affirmed with the costs against the appellant. So ordered.

Carabao, and all other islands and detached rocks lying between Mariveles Reservation on the north side of the entrance to Manila Bay and Calumpan Point Reservation on the south side of said entrance: Provided, That boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above only upon receiving written permission therefor, which permission may be granted by the Secretary of Agriculture and Commerce upon recommendation of the military or naval authorities concerned. A violation of this paragraph may be proceeded against under section 45 of the Federal Penal Code. The above quoted provisions of Administrative, Order No. 2 were issued by the then Secretary of Agriculture and Natural Resources, now Secretary of Agriculture and Commerce, by virtue of the authority vested in him by section 4 of Act No. 4003 which reads as follows: SEC. 4. Instructions, orders, rules and regulations. The Secretary of Agriculture and Natural Resources shall from time to time issue such instructions, orders, rules and regulations consistent with this Act, as may be necessary and proper to carry into effect the provisions thereof and for the conduct of proceedings arising under such provisions. 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 Ill registered in his name and to fish, loiter and anchor within three kilometers of the shore line of the Island of Corregidor over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Commerce. These acts constitute a violation of the conditional clause of section 28 above quoted, which reads as follows: Provided, That boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above (within 3 kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, particularly Corregidor) only upon receiving written permission therefor, which permission may be granted by the Secretary of Agriculture and Commerce upon recommendation of the military and naval authorities of concerned. (Emphasis supplied.) Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within three kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Commerce upon recommendation of the military and naval authorities concerned. Inasmuch as the only authority granted to the Secretary of Agriculture and Commerce, by section 4 of Act No. 4003, is to issue from time to time such instructions, orders, rules, and regulations consistent with said Act, as may be necessary and proper to carry into effect the provisions thereof and for the conduct of proceedings arising under such provisions; and inasmuch as said Act No. 4003, as stated, contains no provisions similar to those contained in the above quoted conditional clause of section 28 of Administrative Order No. 2, the conditional clause in question supplies a defect of the law, extending it. This is equivalent to legislating on the matter, a power which has not been and cannot be delegated to him, it being exclusively reserved to the then Philippine Legislature by the Jones Law, and now to the National Assembly by the Constitution of the Philippines. Such act constitutes not only an excess of the regulatory power conferred upon the Secretary of Agriculture and Commerce, but also an exercise of a legislative power which he does not have, and therefore said conditional clause is null and void and without effect (12 Corpus Juris, 845; Rubi vs. Provincial Board of Mindoro, 39 Phil., 660; U.S. vs. Ang Tang Ho, 43 Phil., 1; U.S. vs. Barrias, 11 Phil., 327). For the foregoing considerations, we are of the opinion and so hold that the conditional clause of section 28 of Administrative Order No. 2. issued by the Secretary of Agriculture and Commerce, is null and void and without effect, as constituting an excess of the regulatory power conferred upon him by section 4 of Act No. 4003 and an exercise of a legislative power which has not been and cannot be delegated to him. Wherefore, inasmuch as the facts with the commission of which Augusto A. Santos is charged do not constitute a crime or a violation of some criminal law within the jurisdiction of the civil courts, the

G.R. No. L-44291

August 15, 1936

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. AUGUSTO A. SANTOS, defendant-appellee. Office of the Solicitor-General Hilado for appellant.Arsenio Santos for appellee. VILLA-REAL, J.: This case is before us by virtue of an appeal taken by the prosecuting attorney from the order of the Court of First Instance of Cavite which reads as follows: O R D E R When this case was called for trial for the arraignment, counsel for the accused appeared stating that in view of the ruling laid down by this court in criminal case No. 6785 of this court, holding that the penalty applicable is under section 83 of Act No. 4003 which falls within the original jurisdiction of the justice of the peace court he requests that the case be remanded to the justice of the peace court of Cavite which conducted the preliminary investigation, so that the latter may try it, being within its original jurisdiction. We agree that it falls within the jurisdiction of the corresponding justice of the peace court, but it being alleged in the information that the infraction was committed within the waters of the Island of Corregidor, the competent justice of the peace court is that of Corregidor, not Cavite. Wherefore, we decree the dismissal of this case, cancelling the bond filed by the accused, with costs de oficio, without prejudice to the filing by the prosecuting attorney of a new information in the justice of the peace court of Corregidor, if he so deems convenient. It is so ordered. In support of his appeal the appellant assigns as the sole alleged error committed by the court a quo its having dismissed the case on the ground that it does not fall within its original jurisdiction. On June 18, 1930, the provincial fiscal of Cavite filed against the accused -appellee Augusta A. Santos an information which reads as follows: The undersigned Provincial Fiscal accuses Augusta A. Santos of violation of section 28 of Fish and Game Administrative Order No. 2 and penalized by section 29 thereof committed as follows: That on or about April 29, 1935, within 1,500 yards north of Cavalry Point, Corregidor Island, Province of Cavite, P.I., the said accused Augusta A. Santos, the registered owner of two fishing motor boats Malabon II and Malabon III, did then and there willfully, unlawfully and criminally have his said boats, manned and operated by his fishermen, fish, loiter and anchor without permission from the Secretary of Agriculture and Commerce within three (3) kilometers from the shore line of the Island of Corregidor over which the naval and military authorities of the United States exercise jurisdiction. Contrary to law. Cavite, Cavite, June 18, 1935. Section 28 of Administrative Order No. 2 relative to fish and game, issued by the Secretary of Agriculture and Commerce, provides as follows: 28. Prohibited fishing areas. No boats licensed in accordance with the provisions of Act No. 4003 and this order to catch, collect, gather, take, or remove fish and other sea products from Philippine waters shall be allowed to fish, loiter, or anchor within 3 kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval or military authorities of the United States, particularly Corregidor, Pulo Caballo, La Monja, El Fraile, and

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information filed against him is dismissed, with the costs de oficio. So ordered.

G.R. No. L-9876 December 8, 1914 THE UNITED STATES, plaintiff-appellee, vs.ADRIANO PANLILIO, defendant-appellant. Pedro Abad Santos for appellant.Office of the Solicitor General Corpus for appellee. MORELAND, J.: This is an appeal from a judgment of the Court of First Instance of the Province of Pampanga convicting the accused of a violation of the law relating to the quarantining of animals suffering from dangerous communicable or contagious diseases and sentencing him to pay a fine of P40, with subsidiary imprisonment in case of insolvency, and to pay the costs of the trial. The information charges: "That on or about the 22nd day of February, 1913, all of the carabaos belonging to the above-named accused having been exposed to the dangerous and contagious disease known as rinderpest, were, in accordance with an order of duly-authorized agent of the Director of Agriculture, duly quarantined in a corral in the barrio of Masamat, municipality of Mexico, Province of Pampanga, P. I.; that, on said place, the said accused, Adriano Panlilio, illegally and voluntarily and without being authorized so to do, and while the quarantine against said carabaos was still in force, permitted and ordered said carabaos to be taken from the corral in which they were then quarantined and conducted from one place to another; that by virtue of said orders of the accused, his servants and agents took the said carabaos from the said corral and drove them from one place to another for the purpose of working them." The defendant demurred to this information on the ground that the acts complained of did not constitute a crime. The demurrer was overruled and the defendant duly excepted and pleaded not guilty. From the evidence introduced by the prosecution on the trial of the cause it appears that the defendant was notified in writing on February 22, 1913, by a duly authorized agent of the Director of agriculture, that all of his carabaos in the barrio of Masamat, municipality of Mexico, Pampanga Province, had been exposed to the disease commonly known as rinderpest, and that said carabaos were accordingly declared under quarantine, and were ordered kept in a corral designated by an agent of the Bureau of Agriculture and were to remain there until released by further order of the Director of Agriculture. It further appears from the testimony of the witnesses for the prosecution that the defendant fully understood that, according to the orders of the Bureau of Agriculture, he was not to remove the animals, or to permit anyone else to remove them, from the quarantine in which they had been placed. In spite, however, of all this, the carabaos were taken from the corral by the commands of the accused and driven from place to place on his hacienda, and were used as work animals thereon in the same manner as if they had not been quarantined. The contention of the accused is that the facts alleged in the information and proved on the trial do not constitute a violation of Act No. 1760 or any portion thereof. We are forced to agree with this contention.1awphil.net The original information against the accused charged a violation of section 6 of Act No. 1760 committed by the accused in that he ordered and permitted his carabaos, which, at the time, were in quarantine, to be taken from quarantine and moved from one place to another on his hacienda. An amended information was filed. It failed, however, to specify that section of Act No. 1760 alleged to have been violated, evidently leaving that to be ascertained by the court on the trial. The only sections of Act No. 1760, which prohibit acts and pronounce them unlawful are 3, 4 and 5. This case does not fall within any of them. Section 3 provides, in effect, that it shall be unlawful for any

person, firm, or corporation knowingly to ship or otherwise bring into the Philippine Islands any animal suffering from, infected with, or dead of any dangerous communicable disease, or any of the effects pertaining to such animal which are liable to introduce such disease into the Philippine Islands. Section 4 declares, substantially, that it shall be unlawful for any reason, firm, or corporation knowingly to ship, drive or otherwise take or transport from one island, province, municipality, township, or settlement to another any domestic animal suffering from any dangerous communicable diseased or to expose such animal either alive or dead on any public road or highway where it may come in contact with other domestic animals. Section 5 provides that whenever the Secretary of the Interior shall declare that a dangerous communicable animal disease prevails in any island, province, municipality, township, or settlement and that there is danger of spreading such disease by shipping, driving or otherwise transporting or taking out of such island, province, municipality, township, or settlement any class of domestic animal, it shall be unlawful for any person, firm or corporation to ship, drive or otherwise remove the kind of animals so specified from such locality except when accompanied by a certificate issued by authority of the Director of Agriculture stating the number and the kind of animals to be shipped, driven, taken or transported, their destination, manner in which they are authorized to be shipped, driven, taken, or transported, and their brands and distinguishing marks. A simple reading of these sections demonstrates clearly that the case at bar does not fall within any of them. There is no question here of importation and there is no charge or proof that the animals in question were suffering from a dangerous communicable disease or that the Secretary of the Interior had made the declaration provided for in section 5 or that the accused had driven or taken said animals from one island, province, municipality, township or settlement to another. It was alleged had been exposed to a dangerous communicable disease and that they had been placed in a corral in quarantine on the premises of the accused and that he, in violation of the quarantine, had taken them from the corral and worked them upon the lands adjoining. They had not been in highway nor moved from one municipality or settlement to another. They were left upon defendant's hacienda, where they were quarantined, and there worked by the servants of the accused. The Solicitor-General in his brief in this court admits that the sections referred to are not applicable to the case at bar and also admits that section 7 of said Act is not applicable. This section provides: "Whenever the Director of Agriculture shall order any animal placed in quarantine in accordance with the provisions of this Act, the owner of such animal, or his agent, shall deliver it at the place designated for the quarantine and shall provide it with proper food, water, and attendance. Should the owner or his agent fail to comply with this requirement the Director of Agriculture may furnish supplies and attendance needed, and the reasonable cost of such supplies and attendance shall be collectible from the owner or his agent." We are in accord with the opinion expressed by the Solicitor-General with respect to this section, as we are with his opinion as to sections 3, 4, and 5. the law nowhere makes it a penal offense to refuse to comply with the provisions of section 7, nor is the section itself so phrased as to warrant the conclusion that it was intended to be a penal section. The section provides the means by which the refusal of the owner to comply therewith shall be overcome and the punishment, if we may call it punishment, which he shall receive by reason of that refusal. It has none of the aspects of a penal provision or the form or substance of such provision. It does not prohibit any act. It does not compel an act nor does it really punish or impose a criminal penalty. The other sections of the law under which punishments may be inflicted are so phrased as to make the prohibited act unlawful, and section 8 provides the punishment for any act declared unlawful by the law. The Solicitor-General suggests, but does not argue, that section 6 is applicable to the case at bar. Section 6 simply authorizes the Director of Agriculture to do certain things, among them, paragraph ( c) "to require that animals which are suffering from dangerous communicable diseases or have been exposed thereto be placed in quarantine at such place and for such time as may be deemed by him necessary to prevent the spread of the disease." Nowhere in the law, however, is the violation of the orders of the Bureau of Agriculture prohibited or made unlawful, nor is there provided any punishment for a violation of such orders. Section 8 provides that "any person violating any of the

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provisions of this Act shall, upon conviction, be punished by a fine of not more than one thousand pesos, or by imprisonment for not more than six months, or by both such fine and imprisonment, in the discretion of the court, for each offense." A violation of the orders of the Bureau of Agriculture, as authorized by paragraph ( c), is not a violation of the provision of the Act. The orders of the Bureau of Agriculture, while they may possibly be said to have the force of law, are statutes and particularly not penal statutes, and a violation of such orders is not a penal offense unless the statute itself somewhere makes a violation thereof unlawful and penalizes it. Nowhere in Act No. 1760 is a violation of the orders of the Bureau of Agriculture made a penal offense, nor is such violation punished in any way therein. Finally, it is contended by the Government that if the offense stated in the information and proved upon the trial does not constitute a violation of any of the provisions of Act No. 1760, it does constitute a violation of article 581, paragraph 2, of the Penal Code. It provides: A fine of not less than fifteen and not more than seventy pesetas and censure shall be imposed upon: . . . 2. Any person who shall violate the regulations, ordinances, or proclamations issued with reference to any epedemic disease among animals, the extermination of locusts, or any other similar plague.1awphil.net It alleged in the information and was proved on the trial that the Bureau of agriculture had ordered a quarantine of the carabaos at the time and place mentioned; that the quarantine had been executed and completed and the animals actually segregated and confined; that the accused, in violation of such quarantine and of the orders of the Bureau of Agriculture, duly promulgated, broke the quarantine, removed the animals and used them in the ordinary work of his plantation. We consider these acts a plain violation of the article of the Penal Code as above quoted. The fact that the information in its preamble charged a violation of act No. 1760 does not prevent us from finding the accused guilty of a violation of an article of the Penal Code. The complaint opens as follows: "The undersigned accuses Adriano Panlilio of a violation of Act No. 1760, committed as follows:" Then follows the body of the information already quoted in this opinion. We would not permit an accused to be convicted under one Act when he is charged with the violation of another, if the change from one statute to another involved a change of the theory of the trial or required of the defendant a different defense or surprised him in any other way. The allegations required under Act No. 1760 include those required under article 581. The accused could have defended himself in no different manner if he had been expressly charged with a violation of article 581. In the case of United States vs. Paua (6 Phil. Rep., 740), the information stating the facts upon which the charge was founded terminated with his expression: "In violation of section 315 of Act No. 355 of the Philippine Commission, in effect on the 6th of February, 1902." In the resolution of this case the Supreme Court found that the facts set forth in the information and proved on the trial did not constitute a violation of section 315 of Act No. 355 as alleged in the information, but did constitute a violation of article 387 in connection with article 383 of the Penal Code, and accordingly convicted the accused under those articles and sentenced him to the corresponding penalty. In that case the court said: "The foregoing facts, duly established as they were by the testimony of credible witnesses who heard and saw everything that occurred, show beyond peradventure of doubt that the crime of attempted bribery, as defined in article 387, in connection with article 383 of the Penal Code, has been committed, it being immaterial whether it is alleged in the complaint that section 315 of Act No. 355 of the Philippine Commission was violated by the defendant, as the same recites facts and circumstances sufficient to constitute the crime of bribery as defined and punished in the aforesaid articles of the Penal Code." (U. S. vs. Lim San, 17 Phil. Rep., 273; U.S. vs. Jeffrey, 15 Phil. Rep., 391; U. S. vs. Guzman, 25 Phil. Rep., 22.) The accused is accordingly convicted of a violation of article 581, paragraph 2, of the Penal Code, and is sentenced to pay a fine of seventy pesetas (P14) and censure, with subsidiary imprisonment in case of insolvency, and the costs of this appeal. So ordered.

G.R. No. L-64279 April 30, 1984 ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners, vs.JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City Branch 129, acting for REGIONAL TRIAL COURT of Camarines Norte, now presided over by JUDGE NICANOR ORIO, Daet Branch 40; DRA. BELLA S. MIRANDA, ARNULFO V. ZENAROSA, ET AL., respondents. Quiazon, De Guzman Makalintal and Barot for petitioners. The Solicitor General for respondents.

AQUINO, J.:+.wph!1 At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of Presidential Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by the government of carabaos transported from one province to another. Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the evening of April 2, 1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia, Batangas, as the destination. They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under the Revised Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a permit to transport large cattle issued under the authority of the provincial commander; and (3) three certificates of inspection, one from the Constabulary command attesting that the carabaos were not included in the list of lost, stolen and questionable animals; one from the LIvestock inspector, Bureau of Animal Industry of Libmanan, Camarines Sur and one from the mayor of Sipocot. In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud, Camarines Norte, were confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander, and by Doctor Bella S. Miranda, provincial veterinarian. The confiscation was basis on the aforementioned Executive Order No. 626-A which provides "that henceforth, no carabao, regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabaos or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos" (78 OG 3144). Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the Vinzons municipal nursery (Annex 1). The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the carabaos allegedly valued at P70,000 and damages of P92,000. The replevin order could not be executed by the sheriff. In his order of April 25, 1983 Judge Domingo Medina Angeles, who heard the case at Daet and who was later transferred to Caloocan City, dismissed the case for lack of cause of action. The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and pursuant to Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court. We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted, it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the Revised Administrative Code. The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said penalties binding on the persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central Bank

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of the Phils., 104 Phil. 573; Balbuna vs. Secretary of Education, 110 Phil. 150.) The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las mismas por el Gobierno en uso de su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.) Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No. 20 and sentenced to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court because the circular was published in the Official Gazette three months after his conviction. He was not bound by the circular. That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision or sanction makes it a penal statute. Justice and fairness dictate that the public must be informed of that provision by means of publication in the Gazette before violators of the executive order can be bound thereby. The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills vs. Social Security System, 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal regulation. Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should be published in the Official Gazette. It provides that "every order or document which shag prescribe a penalty shall be deemed to have general applicability and legal effect." Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised Administrative Code provides that even bureau "regulations and orders shall become effective only when approved by the Department Head and published in the Official Gazette or otherwise publicly promulgated". (See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.) In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of the Public Affairs Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans could not have been expected to be cognizant of such an executive order. It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not in order. The recipients of the carabaos should return them to the Pesigans. However, they cannot transport the carabaos to Batangas because they are now bound by the said executive order. Neither can they recover damages. Doctor Miranda and Zenarosa acted in good faith in ordering the forfeiture and dispersal of the carabaos. WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed and set aside. Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite documents, to the petitioners, who as owners are entitled to possess the same, with the right to dispose of them in Basud or Sipocot, Camarines Sur. No costs. SO ORDERED.

with an extension of about 250 square miles and an average depth of approximately 6 fathoms (Otter trawl explorations in Philippine waters p. 21, Exh. B), is considered as the most important fishing area in the Pacific side of the Bicol region. Sometime in 1950, trawl 1 operators from Malabon, Navotas and other places migrated to this region most of them settling at Sabang, Calabanga, Camarines Sur, for the purpose of using this particular method of fishing in said bay. On account of the belief of sustenance fishermen that the operation of this kind of gear caused the depletion of the marine resources of that area, there arose a general clamor among the majority of the inhabitants of coastal towns to prohibit the operation of trawls in San Miguel Bay. This move was manifested in the resolution of December 18, 1953 (Exh. F), passed by the Municipal Mayors' League condemning the operation of trawls as the cause of the wanton destruction of the shrimp specie and resolving to petition the President of the Philippines to regulate fishing in San Miguel Bay by declaring it closed for trawl fishing at a certain period of the year. In another resolution dated March 27, 1954, the same League of Municipal Mayor, prayed the President to protect them and the fish resources of San Miguel Bay by banning the operation of trawls therein (Exh. 4). The Provincial Governor also made proper presentations to this effect and petitions in behalf of the non-trawl fishermen were likewise presented to the President by social and civic organizations as the NAMFREL (National Movement for Free Elections) and the COMPADRE (Committee for Philippine Action in Development, Reconstruction and Education), recommending the cancellation of the licenses of trawl operators after investigation, if such inquiry would substantiate the charges that the operation of said fishing method was detrimental to the welfare of the majority of the inhabitants (Exh. 2). In response to these pleas, the President issued on April 5, 1954, Executive Order No. 22 (50 Off. Gaz., 1421) prohibiting the use of trawls in San Miguel Bay, but said executive order was amended by Executive Order No. 66, issued on September 23, 1954 (50 Off. Gaz., 4037), apparently in answer to a resolution of the Provincial Board of Camarines Sur recommending the allowance of trawl fishing during the typhoon season only. On November 2, 1954, however, Executive Order No. 80 (50 Off. Gaz., 5198) was issued reviving Executive Order No. 22, to take effect after December 31, 1954. A group of Otter trawl operators took the matter to the court by filing a complaint for injunction and/or declaratory relief with preliminary injunction with the Court of First Instance of Manila, docketed as Civil Case No. 24867, praying that a writ of preliminary injunction be issued to restrain the Secretary of Agriculture and Natural Resources and the Director of Fisheries from enforcing said executive order; to declare the same null and void, and for such other relief as may be just and equitable in the premises. The Secretary of Agriculture and Natural Resources and the Director of Fisheries, represented by the Legal Adviser of said Department and a Special Attorney of the Office of the Solicitor General, answered the complaint alleging, among other things, that of the 18 plaintiff (Exequiel Soriano, Teodora Donato, Felipe Concepcion, Venancio Correa, Santo Gaviana, Alfredo General, Constancio Gutierrez, Arsenio de Guzman, Pedro Lazaro, Porfirio Lazaro, Deljie de Leon, Jose Nepomuceno, Bayani Pingol, Claudio Salgado, Porfirio, San Juan, Luis Sioco, Casimiro Villar and Enrique Voluntad), only 11 were issued license to operate fishing boats for the year 1954 (Annex B, petition L-8895); that the executive orders in question were issued accordance with law; that the encouragement by the Bureau of Fisheries of the use of Otter trawls should not be construed to mean that the general welfare of the public could be disregarded, and set up the defenses that since plaintiffs question the validity of the executive orders issued by the President, then the Secretary of Agriculture and Natural Resources and the Director of Fisheries were not the real parties in interest; that said executive orders do not constitute a deprivation of property without due process of law, and therefore prayed that the complaint be dismissed (Exh. B, petition, L-8895). During the trial of the case, the Governor of Camarines Sur appearing for the municipalities of Siruma, Tinambac, Calabanga, Cabusao and Sipocot, in said province, called the attention of the Court that the Solicitor General had not been notified of the proceeding. To this manifestation, the Court ruled that in view of the circumstances of the case, and as the Solicitor General would only be interested in maintaining the legality of the executive orders sought to be impugned, section 4 of Rule 66 could be interpreted to mean that the trial could go

G.R. Nos. L-8895 and L-9191

April 30, 1957

SALVADOR A. ARANETA, ETC., ET AL., petitioners, vs.THE HON. MAGNO S. GATMAITAN, ETC., ET AL., respondents. EXEQUIEL SORIANO, ET AL., petitioners-appellees, vs.SALVADOR ARANETA, ETC., ET AL., respondents-appellants. Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and Solicitor Troadio T. Quiazon for petitioners.San Juan, Africa and Benedicto for respondents. FELIX, J.: San Miguel Bay, located between the provinces of Camarines Norte and Camarines Sur, a part of the National waters of the Philippines

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on and the Solicitor General could be notified before judgement is entered. After the evidence for both parties was submitted and the Solicitor General was allowed to file his memorandum, the Court rendered decision on February 2, 1955, the last part of which reads as follows: The power to close any definite area of the Philippine waters, from the fact that Congress has seen fit to define under what conditions it may be done by the enactment of the sections cited, in the mind of Congress must be of transcendental significance. It is primarily within the fields of legislation not of execution: for it goes far and says who can and who can not fish in definite territorial waters. The court can not accept that Congress had intended to abdicate its inherent right to legislate on this matter of national importance. To accept respondents' view would be to sanction the exercise of legislative power by executive decrees. If it is San Miguel Bay now, it may be Davao Gulf tomorrow, and so on. That may be done only by Congress. This being the conclusion, there is hardly need to go any further. Until the trawler is outlawed by legislative enactment, it cannot be banned from San Miguel Bay by executive proclamation. The remedy for respondents and population of the coastal towns of Camarines Sur is to go to the Legislature. The result will be to issue the writ prayed for, even though this be to strike at public clamor and to annul the orders of the President issued in response therefor. This is a task unwelcome and unpleasant; unfortunately, courts of justice use only one measure for both the rich and poor, and are not bound by the more popular cause when they give judgments. IN VIEW WHEREOF, granted; Executive Order Nos. 22, 66 and 80 are declared invalid; the injunction prayed for is ordered to issue; no pronouncement as to costs. Petitioners immediately filed an ex-parte motion for the issuance of a writ of injunction which was opposed by the Solicitor General and after the parties had filed their respective memoranda, the Court issued an order dated February 19, 1955, denying respondents' motion to set aside judgement and ordering them to file a bond in the sum of P30,000 on or before March 1, 1955, as a condition for the nonissuance of the injunction prayed for by petitioners pending appeal. The Solicitor General filed a motion for reconsideration which was denied for lack of merit, and the Court, acting upon the motion for new trial filed by respondents, issued another order on March 3, 1965, denying said motion and granting the injunction prayed for by petitioners upon the latter's filing a bond for P30,000 unless respondents could secure a writ of preliminary injunction from the Supreme Court on or before March 15, 1955. Respondents, therefore, brought the matter to this Court in a petition for prohibition and certiorari with preliminary injunction, docketed as G.R. No. L-8895, and on the same day filed a notice to appeal from the order of the lower court dated February 2, 1955, which appeal was docketed in this Court as G.R. No. L-9191. In the petition for prohibition and certiorari, petitioners (respondents therein) contended among other things, that the order of, the respondent Judge requiring petitioners Secretary of Agriculture and Natural Resources and the Director of Fisheries to post a bond in the sum of P30,000 on or before March 1, 1955, had been issued without jurisdiction or in excess thereof, or at the very least with grave abuse of discretion, because by requiring the bond, the Republic of the Philippines was in effect made a party defendant and therefore transformed the suit into one against the Government which is beyond the jurisdiction of the respondent Judge to entertain; that the failure to give the Solicitor General the opportunity to defend the validity of the challenged executive orders resulted in the receipt of objectionable matters at the hearing; that Rule 66 of the Rules of Court does not empower a court of law to pass upon the validity of an executive order in a declaratory relief proceeding; that the respondent Judge did not have the power to grant the injunction as Section 4 of Rule 39 does not apply to declaratory relief proceedings but only to injunction, receivership and patent accounting proceedings; and prayed that a writ of preliminary injunction be issued to enjoin the respondent Judge from enforcing its order of March 3, 1955, and for such other relief as may be deem just and equitable in the premises. This petition was given due course and the hearing on the merits was set by this Court for April 12, 1955, but no writ of preliminary injunction was issued. Meanwhile, the appeal (G.R. No. L-9191) was heard on October 3,

1956, wherein respondents-appellants ascribed to the lower court the commission of the following errors: 1. In ruling that the President has no authority to issue Executive Orders Nos. 22, 66 and 80 banning the operation of trawls in San Miguel Bay; 2. In holding that the power to declare a closed area for fishing purposes has not been delegated to the President of the Philippines under the Fisheries Act; 3. In not considering Executive Orders Nos. 22, 66 and 80 as declaring a closed season pursuant to Section 7, Act 4003, as amended, otherwise known as the Fisheries Act; 4. In holding that to uphold the validity of Executive Orders Nos. 22 and 80 would be to sanction the exercise of legislative power by executive decrees; 5. In its suggestion that the only remedy for respondents and the people of the coastal towns of Camarines Sur and Camarines Norte is to go to the Legislature; and 6. In declaring Executive Orders Nos. 22, 66 and 80 invalid and in ordering the injunction prayed for to issue. As Our decision in the prohibition and certiorari case (G.R. No. L-8895) would depend, in the last analysis, on Our ruling in the appeal of the respondents in case G.R. No. L-9191, We shall first proceed to dispose of the latter case. It is indisputable that the President issued Executive Orders Nos. 22, 66 and 80 in response to the clamor of the inhabitants of the municipalities along the coastline of San Miguel Bay. They read as follows: EXECUTIVE ORDER No. 22 PROHIBITING THE USE OF TRAWLS IN SAN MIGUEL BAY In order to effectively protect the municipal fisheries of San Miguel Bay, Camarines Norte and Camarines Sur, and to conserve fish and other aquatic resources of the area, I, RAMON MAGSAYSAY, President of the Philippines, by virtue of the powers vested in me by law, do hereby order that: 1. Fishing by means of trawls (utase, otter and/or perenzella) of any kind, in the waters comprised within San Miguel Bay, is hereby prohibited. 2. Trawl shall mean, for the purpose of this Order, a fishing net made in the form of a bag with the mouth kept open by a device, the whole affair being towed, dragged, trailed or trawled on the bottom of the sea to capture demersal, ground or bottom species. 3. Violation of the provisions of this Order shall subject the offender to the penalty provided under Section 83 of Act 4993, or more than six months, or both, in the discretion of the Court. Done in the City of Manila, this 5th day of April, nineteen hundred and fifty-four and of the Independence of the Philippines, the eighth. (50 Off. Gaz. 1421) EXECUTIVE ORDER No. 66 AMENDING EXECUTIVE ORDER No. 22, DATED APRIL 5, 1954, ENTITLED "PROHIBITING THE USE OF TRAWLS IN SAN MIGUEL BAY" By virtue of the powers voted in me by law, I, RAMON MAGSAYSAY, President of the Philippines, do hereby amend Executive Order No. 22, dated April 5, 1954, so as to allow fishing by means of trawls, as defined in said Executive Order, within that portion of San Miguel Bay north of a straight line drawn from Tacubtacuban Hill in the Municipality of Tinambac, Province of Camarines Sur. Fishing by means of trawls south of said line shall still be absolutely prohibited. Done in the City of Manila, this 23rd day of September, in the year of our Lord, nineteen hundred and fifty-four, and of the Independence of the Philippines, the ninth." (50 Off. Gaz. 4037). EXECUTIVE ORDER No. 80. FURTHER AMENDING EXECUTIVE ORDER No. 22, DATED APRIL

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5, 1954, AS AMENDED BY EXECUTIVE ORDER No. 66, DATED SEPTEMBER 23, 1954. By virtue of the powers vested in me by law, I, RAMON MAGSAYSAY, President of the Philippines, do hereby amend Executive Order No. 66 dated September 23, 1954, so as to allow fishing by means of trawls, as defined in Executive Order No. 22, dated April 5, 1954, within the portion of San Miguel Bay North of a straight line drawn from Tacubtacuban Hill in the Municipality of Mercedes, Province of Camarines Norte to Balocbaloc Point in the Municipality of Tinambac, Province of Camarines Sur, until December 31, 1954, only. Thereafter, the provisions of said Executive Order No. 22 absolutely prohibiting fishing by means of trawls in all the waters comprised within the San Miguel Bay shall be revived and given full force and effect as originally provided therein. Done in the City of Manila, this 2nd day of November, in the year of Our Lord, nineteen hundred and fifty-four and of the Independence of the Philippines, the ninth. (50 Off. Gaz. 5198) It is likewise admitted that petitioners assailed the validity of said executive orders in their petition for a writ of injunction and/or declaratory relief filed with the Court of First Instance of Manila, and that the lower court, upon declaring Executive Orders Nos. 22, 66 and 80 invalid, issued an order requiring the Secretary of Agriculture and Natural Resources and the Director of Fisheries to post a bond for P30,000 if the writ of injunction restraining them from enforcing the executive orders in question must be stayed. The Solicitor General avers that the constitutionality of an executive order cannot be ventilated in a declaratory relief proceeding. We find this untenable, for this Court taking cognizance of an appeal from the decision of the lower court in the case of Hilado vs. De la Costa, et al., 83 Phil., 471, which involves the constitutionality of another executive order presented in an action for declaratory relief, in effect accepted the propriety of such action. This question being eliminated, the main issues left for Our determination with respect to defendants' appeal (G.R. No. L-9191), are: (1) Whether the Secretary of an Executive Department and the Director of a Bureau, acting in their capacities as such Government officials, could lawfully be required to post a bond in an action against them; (2) Whether the President of the Philippines has authority to issue Executive Orders Nos. 22, 66 and 80, banning the operation of trawls in San Miguel Bay, or, said in other words, whether said Executive Orders Nos. 22, 66 and 80 were issued in accordance with law; and. (3) Whether Executive Orders Nos. 22, 66 and 80 were valid, for the issuance thereof was not in the exercise of legislative powers unduly delegated to the President. Counsel for both parties presented commendable exhaustive defenses in support of their respective stands. Certainly, these cases deserve such efforts, not only because the constitutionality of an act of a coordinate branch in our tripartite system of Government is in issue, but also because of the number of inhabitants, admittedly classified as "subsistence fishermen", that may be affected by any ruling that We may promulgate herein. I. As to the first proposition, it is an elementary rule of procedure that an appeal stays the execution of a judgment. An exception is offered by section 4 of Rule 39 of the Rules of Court which provides that: SEC. 4. INJUNCTION, RECEIVERSHIP AND PATENT ACCOUNTING, NOT STAYED. Unless otherwise ordered by the court, a judgment in an action for injunction or in a receivership action, or a judgment or order directing an accounting in an action for infringement of letter patent, shall not be stayed after its rendition and before an appeal is taken or during the pendency of an appeal. The trial court, however, in its discretion, when an appeal is taken from a judgement granting, dissolving or denying an injunction, may make an order suspending, modifying, restoring, or granting such injunction during the pendency of an appeal, upon such terms as to bond or otherwise as it may consider proper for the security of the rights of the adverse party.

This provision was the basis of the order of the lower court dated February 19, 1955, requiring the filing by the respondents of a bond for P30,000 as a condition for the non-issuance of the injunction prayed for by plaintiffs therein, and which the Solicitor General charged to have been issued in excess of jurisdiction. The State's counsel, however, alleges that while judgment could be stayed in injunction, receivership and patent accounting cases and although the complaint was styled "Injunction, and/or Declaratory Relief with Preliminary Injunction", the case is necessarily one for declaratory relief, there being no allegation sufficient to convince the Court that the plaintiffs intended it to be one for injunction. But aside from the title of the complaint, We find that plaintiffs pray for the declaration of the nullity of Executive Order Nos. 22, 66 and 80; the issuance of a writ of preliminary injunction, and for such other relief as may be deemed just and equitable. This Court has already held that there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right sought to be protected, and that the acts against which the injunction is to be directed are violative of said right (North Negros Sugar Co., Inc. vs. Serafin Hidalgo, 63 Phil., 664). There is no question that at least 11 of the complaining trawl operators were duly licensed to operate in any of the national waters of the Philippines, and it is undeniable that the executive enactment's sought to be annulled are detrimental to their interests. And considering further that the granting or refusal of an injunction, whether temporary or permanent, rests in the sound discretion of the Court, taking into account the circumstances and the facts of the particular case (Rodulfa vs. Alfonso, 76 Phil,, 225, 42 Off. Gaz., 2439), We find no abuse of discretion when the trial Court treated the complaint as one for injunction and declaratory relief and executed the judgment pursuant to the provisions of section 4 of Rule 39 of the Rules of Court. On the other hand, it shall be remembered that the party defendants in Civil Case No. 24867 of the Court of First Instance of Manila are Salvador Araneta, as Secretary of Agriculture and Natural Resources, and, Deogracias Villadolid, as Director of Fisheries, and were sued in such capacities because they were the officers charged with duty of carrying out the statutes, orders and regulations on fishing and fisheries. In its order of February 19, 1955, the trial court denied defendants' motion to set aside judgment and they were required to file a bond for P30,000 to answer for damages that plaintiffs were allegedly suffering at that time, as otherwise the injunction prayed for by the latter would be issued. Because of these facts, We agree with the Solicitor General when he says that the action, being one against herein petitioners as such Government officials, is essentially one against the Government, and to require these officials to file a bond would be indirectly a requirement against the Government for as regards bonds or damages that may be proved, if any, the real party in interest would be the Republic of the Philippines (L. S. Moon and Co. vs. Harrison, 43 Phi., 39; Salgado vs. Ramos, 64 Phil., 724-727, and others). The reason for this pronouncement is understandable; the State undoubtedly is always solvent (Tolentino vs. Carlos 66 Phil., 140; Government of the P. I. vs. Judge of the Court of First Instance of Iloilo, 34 Phil., 167, cited in Joaquin Gutierrez et al. vs. Camus et al. * G.R. No. L-6725, promulgated October 30, 1954). However, as the records show that herein petitioners failed to put up the bond required by the lower court, allegedly due to difficulties encountered with the Auditor General's Office (giving the impression that they were willing to put up said bond but failed to do so for reasons beyond their control), and that the orders subjects of the prohibition and certiorari proceedings in G.R. No. L-8895, were enforced, if at all,2 in accordance with section 4 of Rule 39, which We hold to be applicable to the case at bar, the issue as to the regularity or adequacy of requiring herein petitioners to post a bond, becomes moot and academic. II. Passing upon the question involved in the second proposition, the trial judge extending the controversy to the determination of which between the Legislative, and Executive Departments of the Government had "the power to close any definite area of the Philippine waters" instead of limiting the same to the real issue raised by the enactment of Executive Orders No. 22, 26 and 80, especially the first and the last "absolutely prohibiting fishing by means trawls in all the waters comprised within the San Miguel Bay", ruled in favor of Congress had not intended to abdicate its power to legislate on the matter, he maintained as stated before, that "until the trawler is outlawed by legislative enactment, it cannot be banned from San

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Miguel Bay by executive proclamation", and that "the remedy for respondents and population of the coastal towns of Camarines Sur is to go to Legislature," and thus declared said Executive Orders Nos. 22, 66 and 80 invalid". The Solicitor General, on the contrary, asserts that the President is empowered by law to issue the executive enactment's in question. Sections 6, 13 and 75 of Act No. 4003, known as the Fisheries Law, the latter two sections as amended by section 1 of Commonwealth Act No. 471, read as follows: SEC. 6. WORDS AND PHRASES DEFINED. Words and terms used in this Act shall be construed as follows: x x x x x x x x x TAKE or TAKING includes pursuing, shooting, killing, capturing, trapping, snaring, and netting fish and other aquatic animals, and all lesser acts, such as disturbing, wounding, stupefying; or placing, setting, drawing, or using any net or other device commonly used to take or collect fish and other aquatic animals, whether they result in taking or not, and includes every attempt to take and every act of assistance to every other person in taking or attempting to take or collect fish and other aquatic animals: PROVIDED, That whenever taking is allowed by law, reference is had to taking by lawful means and in lawful manner. x x x x x x x x x SEC. 13. PROTECTION OF FRY OR FISH EGGS. Except for scientific or educational purpose or for propagation, it shall be unlawful to take or catch fry or fish eggs and the small fish, not more than three (3) centimeters long, known as siliniasi, in the territorial waters of the Philippines. Towards this end, the Secretary of Agriculture and Commerce shall be authorized to provide by regulations such restrictions as may be deemed necessary to be imposed on THE USE OF ANY FISHING NET OR FISHING DEVICE FOR THE PROTECTION OF FRY OR FISH EGGS; Provided, however , That the Secretary of Agriculture and Commerce shall permit the taking of young of certain species of fish known as hipon under such restrictions as may be deemed necessary. SEC. 75. FISH REFUGEES AND SANCTUARIES. Upon the recommendation of the officer or chief of the bureau, office or service concerned, the Secretary of Agriculture and Commerce may set aside and establish fishery reservation or fish refuges and sanctuaries to be administered in the manner to be prescribed by him. All streams, ponds and waters within the game refuge, birds, sanctuaries, national parks, botanical gardens, communal forest and communal pastures are hereby declared fishing refuges and sanctuaries. It shall be unlawful for any person, to take, destroy or kill in any of the places aforementioned, or in any manner disturb or drive away or take therefrom, any fish fry or fish eggs. Act No. 4003 further provides as follows: SEC. 83. OTHER VIOLATIONS. Any other violation of the provisions of this Act or any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the Court. As may be seen from the just quoted provisions, the law declares unlawful and fixes the penalty for the taking (except for scientific or educational purposes or for propagation), destroying or killing of any fish fry or fish eggs, and the Secretary of Agriculture and Commerce (now the Secretary of Agriculture and Natural Resources) is authorized to promulgate regulations restricting the use of any fish net or fishing device (which includes the net used by trawl fishermen) for the protection of fry or fish eggs, as well as to set aside and establish fishery reservations or fish refuges and sanctuaries to be administered in the manner prescribed by him, from which no person could lawfully take, destroy or kill in any of the places aforementioned, or in any manner disturb or drive away or take therefrom any small or immature fish, fry or fish eggs. It is true that said section 75 mentions certain streams, ponds and waters within the game refuges, . . . communal forest, etc., which the law itself declares fish refuges and sanctuaries, but this enumeration of places does not curtail the general and unlimited power of the Secretary of Agriculture and Natural Resources

in the first part of section 75, to set aside and establish fishery reservations or fish refuges and sanctuaries, which naturally include seas or bays, like the San Miguel Bay in Camarines. From the resolution passed at the Conference of Municipal Mayors held at Tinambac, Camarines Sur, on December 18, 1953 (Exh. F), the following manifestation is made: WHEREAS, the continuous operation of said trawls even during the close season as specified in said Executive Order No. 20 caused the wanton destruction of the mother shrimps laying their eggs and the millions of eggs laid and the inevitable extermination of the shrimps specie; in order to save the shrimps specie from eventual extermination and in order to conserve the shrimps specie for posterity; In the brief submitted by the NAMFREL and addressed to the President of the Philippines (Exh. 2), in support of the petition of San Miguel Bay fishermen (allegedly 6, 175 in number), praying that trawlers be banned from operating in San Miguel Bay, it is stated that: The trawls ram and destroy the fish corrals. The heavy trawl nets dig deep into the ocean bed. They destroy the fish foods which lies below the ocean floor. Their daytime catches net millions of shrimps scooped up from the mud. In their nets they bring up the life of the sea: algea, shell fish and star fish . . . The absence of some species or the apparent decline in the catch of some fishermen operating in the bay may be due to several factors, namely: the indiscriminate catching of fry and immature sizes of fishes , the wide-spread use of explosives inside as well as at the mouth and approaches of the bay, and the extensive operation of the trawls. (p.9, Report of Santos B. Rasalan, Exh. A) Extensive Operation of Trawls: The strenuous effect of the operations of the 17 TRAWLS of the demersal fisheries of San Miguel Bay is better appreciated when we consider the fact that out of its about 850 square kilometers area, only about 350 square kilometers of 5 fathoms up could be trawled. With their continuous operation, is greatly strained. This is shown by the fact that in view of the nonobservance of the close season from May to October, each year, majority of their catch are immature . If their operation would continue unrestricted, the supply would be greatly depleted. (p. 11), Report of Santos B. Rasalan, Exh. A) San Miguel Bay can sustain 3 to 4 small trawlers (Otter Trawl Explorations in Philippine Waters, Research Report 25 of the Fish and Wildlife Service, United States Department of the Interior, p. 9 Exhibit B). According to Annex A of the complaint filed in the lower court in Civil Case No. 24867 G.R. No. L-9191 (Exh. D, p. 53 of the folder of Exhibits), the 18 plaintiffs-appellees operate 29 trawling boats, and their operation must be in a big scale considering the investments plaintiffs have made therefore, amounting to P387,000 (Record on Appeal, p. 16-17). In virtue of the aforementioned provisions of law and the manifestation just copied, We are of the opinion that with or without said Executive Orders, the restriction and banning of trawl fishing from all Philippine waters come, under the law, within the powers of the Secretary of Agriculture and Natural Resources, who in compliance with his duties may even cause the criminal prosecution of those who in violation of his instructions, regulations or orders are caught fishing with trawls in the Philippine waters. Now, if under the law the Secretary of Agriculture and Natural Resources has authority to regulate or ban the fishing by trawl which, it is claimed, obnoxious for it carries away fish eggs and fry's which should be preserved, can the President of the Philippines exercise that same power and authority? Section 10(1), Article VII of the Constitution of the Philippines prescribes: SEC. 10 (1). The President shall have control of all the executive departments, bureaus or offices, exercises general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed. Section 63 of the Revised Administrative Code reads as follows: SEC. 63. EXECUTIVE ORDERS AND EXECUTIVE PROCLAMATION. Administrative acts and commands of the President of the

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Philippines touching the organization or mode of operation of the Government or rearranging or readjusting any of the district, divisions, parts or ports of the Philippines, and all acts and commands governing the general performance of duties by public employees or disposing of issues of general concern shall be made in executive orders. x x x x x x x x x Regarding department organization Section 74 of the Revised Administrative Code also provides that: All executive functions of the government of the Republic of the Philippines shall be directly under the Executive Departments subject to the supervision and control of the President of the Philippines in matters of general policy. The Departments are established for the proper distribution of the work of the Executive, for the performance of the functions expressly assigned to them by law, and in order that each branch of the administration may have a chief responsible for its direction and policy. Each Department Secretary shall assume the burden of, and responsibility for, all activities of the Government under his control and supervision. For administrative purposes the President of the Philippines shall be considered the Department Head of the Executive Office. One of the executive departments is that of Agriculture and Natural Resources which by law is placed under the direction and control of the Secretary, who exercises its functions subject to the general supervision and control of the President of the Philippines (Sec. 75, R. A. C.). Moreover, "executive orders, regulations, decrees and proclamations relative to matters under the supervision or jurisdiction of a Department, the promulgation whereof is expressly assigned by law to the President of the Philippines, shall as a general rule, be issued upon proposition and recommendation of the respective Department" (Sec. 79-A, R.A.C.), and there can be no doubt that the promulgation of the questioned Executive Orders was upon the proposition and recommendation of the Secretary of Agriculture and Natural Resources and that is why said Secretary, who was and is called upon to enforce said executive Orders, was made a party defendant in one of the cases at bar (G.R. No. L-9191). For the foregoing reasons We do hesitate to declare that Executive Orders Nos. 22, 66 and 80, series of 1954, of the President, are valid and issued by authority of law. III. But does the exercise of such authority by the President constitute and undue delegation of the powers of Congress? As already held by this Court, the true distinction between delegation of the power to legislate and the conferring of authority or discretion as to the execution of law consists in that the former necessary involves a discretion as to what the law shall be, wile in the latter the authority or discretion as to its execution has to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made (Cruz vs. Youngberg, 56 Phil., 234, 239. See also Rubi, et al. vs. The Provincial Board of Mindoro, 39 Phil., 660). In the case of U. S. vs. Ang Tang Ho, 43 Phil. 1, We also held: THE POWER TO DELEGATE. The Legislature cannot delegate legislative power to enact any law. If Act No. 2868 is a law unto itself, and it does nothing more than to authorize the Governor-General to make rules and regulations to carry it into effect, then the Legislature created the law. There is no delegation of power and it is valid. On the other hand, if the act within itself does not define a crime and is not complete, and some legislative act remains to be done to make it a law or a crime, the doing of which is vested in the Governor-General, the act is delegation of legislative power, is unconstitutional and void. From the provisions of Act No. 4003 of the Legislature, as amended by Commonwealth Act No. 471, which have been aforequoted, We find that Congress (a) declared it unlawful "to take or catch fry or fish eggs in the territorial waters of the Philippines; (b) towards this end, it authorized the Secretary of Agriculture and Natural Resources to provide by the regulations such restrictions as may be deemed necessary to be imposed on the use of any fishing net or fishing device for the protection of fish fry or fish eggs (Sec. 13); (c) it authorized the Secretary of Agriculture and Natural Resources to set aside and establish fishery reservations or fish refuges and sanctuaries to be administered in the manner to be prescribed by him and declared

it unlawful for any person to take, destroy or kill in any of said places, or, in any manner disturb or drive away or take therefrom, any fish fry or fish eggs (See. 75); and (d) it penalizes the execution of such acts declared unlawful and in violation of this Act (No. 4003) or of any rules and regulations promulgated thereunder, making the offender subject to a fine of not more than P200, or imprisonment for not more than 6 months, or both, in the discretion of the court (Sec. 83). From the foregoing it may be seen that in so far as the protection of fish fry or fish egg is concerned, the Fisheries Act is complete in itself, leaving to the Secretary of Agriculture and Natural Resources the promulgation of rules and regulations to carry into effect the legislative intent. It also appears from the exhibits on record in these cases that fishing with trawls causes "a wanton destruction of the mother shrimps laying their eggs and the millions of eggs laid and the inevitable extermination of the shrimps specie" (Exh. F), and that, "the trawls ram and destroy the fish corrals. The heavy trawl nets dig deep into the ocean bed. They destroy the fish food which lies below the ocean floor. Their daytime catches net millions of shrimps scooped up from the mud. In their nets they bring up the life of the sea" (Exh- 2). In the light of these facts it is clear to Our mind that for the protection of fry or fish eggs and small and immature fishes, Congress intended with the promulgation of Act No. 4003, to prohibit the use of any fish net or fishing device like trawl nets that could endanger and deplete our supply of sea food, and to that end authorized the Secretary of Agriculture and Natural Resources to provide by regulations such restrictions as he deemed necessary in order to preserve the aquatic resources of the land. Consequently, when the President, in response to the clamor of the people and authorities of Camarines Sur issued Executive Order No. 80 absolutely prohibiting fishing by means of trawls in all waters comprised within the San Miguel Bay, he did nothing but show an anxious regard for the welfare of the inhabitants of said coastal province and dispose of issues of general concern (Sec. 63, R.A.C.) which were in consonance and strict conformity with the law. Wherefore, and on the strength of the foregoing considerations We render judgement, as follows: (a) Declaring that the issues involved in case G.R. No. L-8895 have become moot, as no writ of preliminary injunction has been issued by this Court the respondent Judge of the Court of First Instance of Manila Branch XIV, from enforcing his order of March 3, 1955; and (b) Reversing the decision appealed from in case G. R. No. L-9191; dissolving the writ of injunction prayed for in the lower court by plaintiffs, if any has been actually issued by the court a quo; and declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid for having been issued by authority of the Constitution, the Revised Administrative Code and the Fisheries Act. Without pronouncement as to costs. It is so ordered.

G.R. No. L-32166 October 18, 1977 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs.HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO DEL ROSARIO, accused-appellees. Office of the Solicitor General for appellant. Rustics F. de los Reyes, Jr. for appellees.

AQUINO, J.:t.hqw This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water fisheries, promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission. On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. Cruz, Laguna

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with having violated Fisheries Administrative Order No. 84-1. It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by "using their own motor banca, equipped with motor; with a generator colored green with attached dynamo colored gray or somewhat white; and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current, which destroy any aquatic animals within its cuffed reach, to the detriment and prejudice of the populace" (Criminal Case No. 5429). Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. SC-36). The case is now before this Court on appeal by the prosecution under Republic Act No. 5440. The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy conducted or transmitted by substances. The lower court further held that, since the law does not clearly prohibit electro fishing, the executive and judicial departments cannot consider it unlawful. As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing. Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not more than five hundred pesos nor more than five thousand, and by imprisonment for not less than six months nor more than five years. It is noteworthy that the Fisheries Law does not expressly punish .electro fishing." Notwithstanding the silence of the law, the Secretary of Agriculture and Natural Resources, upon the recommendation of the Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters. The order is quoted below: +.wph!1 SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS +. wph!1 OF THE PHILIPPINES. Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the following rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance of all concerned. +. wph!1 SECTION 1. Definition. Words and terms used in this Order 11 construed as follows: (a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago, as defined in the t between the United States and Spain, dated respectively the tenth of December, eighteen hundred ninety eight and the seventh of November, nineteen hundred. For the purpose of this order, rivers, lakes and other bodies of fresh waters are included. (b) Electro Fishing. Electro fishing is the catching of fish with the use of electric current. The equipment used are of many electrical devices which may be battery or generator-operated and from and available source of electric current. (c) 'Persons' includes firm, corporation, association, agent or employee. (d) 'Fish' includes other aquatic products. SEC. 2. Prohibition. It shall be unlawful for any person to engage in electro fishing or to catch fish by the use of electric current in any portion of the Philippine waters except for research, educational and scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural Resources which shall be carried at all times.

SEC. 3. Penalty. Any violation of the provisions of this Administrative Order shall subject the offender to a fine of not exceeding five hundred pesos (P500.00) or imprisonment of not extending six (6) months or both at the discretion of the Court. SEC. 4. Repealing Provisions. All administrative orders or parts thereof inconsistent with the provisions of this Administrative Order are hereby revoked. SEC. 5. Effectivity. This Administrative Order shall take effect six (60) days after its publication in the Office Gazette. On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of the Fisheries Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of Administrative Order No. 84, by restricting the ban against electro fishing to fresh water fisheries (63 O.G. 9963). Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other bodies of fresh water." The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is punishable under section 83 of the Fisheries Law (not under section 76 thereof), which provides that any other violation of that law "or of any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200), or in t for not more than six months, or both, in the discretion of the court." That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84 imposes a fm of not exceeding P500 on a person engaged in electro fishing, which amount the 83. It seems that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed in section 83. Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 44 [f], Judiciary Law; People vs. Ragasi, L-28663, September 22, We have discussed this pre point, not raised in the briefs, because it is obvious that the crime of electro fishing which is punishable with a sum up to P500, falls within the concurrent original jurisdiction of the inferior courts and the Court of First instance (People vs. Nazareno, L-40037, April 30, 1976, 70 SCRA 531 and the cases cited therein). And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial capital, the order of d rendered by that municipal court was directly appealable to the Court, not to the Court of First Instance of Laguna (Sec. 45 and last par. of section 87 of the Judiciary Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA 596). It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. Its order affirming the municipal court's order of dismissal is void for lack of motion. This appeal shall be treated as a direct appeal from the municipal court to this Court. (See People vs. Del Rosario, 97 Phil. 67). In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not issued under section 11 of the Fisheries Law which, as indicated above, punishes fishing by means of an obnoxious or poisonous substance. This contention is not well-taken because, as already stated, the Penal provision of Administrative Order No. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11. The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries Law; (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the declared national policy to encourage, Promote and conserve our fishing resources (Sec. 1, Republic Act No. 3512), and (4) section 83 of the

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Fisheries Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court." As already pointed out above, the prosecution's reference to section 83 is out of place because the penalty for electro fishing under Administrative order No. 84 is not the same as the penalty fixed in section 83. We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission, Republic Act No. 3512. The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis. Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in the old Fisheries Law. That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2) unlawful fishing in deepsea fisheries; (3) unlawful taking of marine molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report the kind and quantity of fish caught, and (6) other violations. Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in punishing electro fishing, does not contemplate that such an offense fails within the category of "other violations" because, as already shown, the penalty for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances, fixed in section 76, and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the Fisheries Law. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. (People vs. Exconde 101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11 32). Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban against electro fishing was confined to fresh water fisheries. The amendment created the impression that electro fishing is not condemnable per se. It could be tolerated in marine waters. That circumstances strengthens the view that the old law does not eschew all forms of electro fishing. However, at present, there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. 704, which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and which was promulgated on May 16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh water and salt water areas. That decree provides: +.wph!1 SEC. 33. Illegal fishing, dealing in illegally caught fish or fishery/aquatic products. It shall he unlawful for any person to catch, take or gather or cause to be caught, taken or gathered fish or fishery/aquatic products in Philippine waters with the use of explosives, obnoxious or poisonous substance, or by the use of electricity as defined in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: ... The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586, Presidential Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders, rules and regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704). The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that

point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing. Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries Administrative Order No. 84 and which is not provided for the old Fisheries Law, is now found in section 3(d) of the decree. Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4) years", a punishment which is more severe than the penalty of a time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order No. 84. An examination of the rule-making power of executive officials and administrative agencies and, in particular, of the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order. Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Mu;oz, L-24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706, 712). The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506; Interprovincial Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6). The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the nondeleption of legislative, powers. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the law" Calalang vs. Williams, 70 Phil. 726; People vs. Rosenthal and Osme;a, 68 Phil. 328). Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350). The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans Administrative, L-27299, June 27, 1973, 51 SCRA 340, 349). There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue instructions, orders, and regulations consistent" with that law, "as may be and proper to carry into effect the provisions thereof." That power is now vested in the Secretary of Natural Resources by on 7 of the Revised Fisheries law, Presidential December No. 704. Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources, forms instructions, rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries." Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate, whenever he

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may see fit do so, all rules, regulates, orders, memorandums, and other instructions, not contrary to law, to regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of his Department, and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said Department; but none of said rules or orders shall prescribe penalties for the violation thereof, except as expressly authorized by law." Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. Secretary of culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that he should not transcend the bound demarcated by the statute for the exercise of that power; otherwise, he would be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body. Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution." As noted by Justice Fernando, "except for constitutional officials who can trace their competence to act to the fundamental law itself, a public office must be in the statute relied upon a grant of power before he can exercise it." "department zeal may not be permitted to outrun the authority conferred by statute." (Radio Communications of the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974, 58 SCRA 493, 496-8). "Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided in the law. This is so because statutes are usually couched in general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the law are oftentimes left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law." The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency. (Davis, Administrative Law, p. 194, 197, cited in Victories Milling Co., Inc. vs. Social Security Commission, 114 Phil. 555, 558). In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People vs. Lim, 108 Phil. 1091). This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the attention of technical men in the executive departments, who draft rules and regulations, to the importance and necessity of closely following the legal provisions which they intend to implement so as to avoid any possible misunderstanding or confusion. The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in accordance with the provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, 124). In other words, a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided in the authorizing statute and by virtue of the latter (People vs. Exconde 101 Phil. 1125, 1132). It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in the legislature, and it may not be delegated to any other body or agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F. Supp. 527). In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law, under which the regulation was issued, because the law itself does not expressly punish electro fishing. The instant case is similar to People vs. Santos, 63 Phil. 300. The

Santos case involves section 28 of Fish and Game Administrative Order No. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law. Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military reservations authorities of the United States only upon receiving written permission therefor, which permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. A violation of the proviso may be proceeded against under section 45 of the Federal Penal Code. Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two fishing boats to fish, loiter and anchor without permission from the Secretary within three kilometers from the shoreline of Corrigidor Island. This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military and naval authorities concerned. As the said law does not penalize the act mentioned in section 28 of the administrative order, the promulgation of that provision by the Secretary "is equivalent to legislating on the matter, a power which has not been and cannot be delegated to him, it being expressly reserved" to the lawmaking body. "Such an act constitutes not only an excess of the regulatory power conferred upon the Secretary but also an exercise of a legislative power which he does not have, and therefore" the said provision "is null and void and without effect". Hence, the charge against Santos was dismiss. A penal statute is strictly construed. While an administrative agency has the right to make ranks and regulations to carry into effect a law already enacted, that power should not be confused with the power to enact a criminal statute. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130). Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority granting statute, do not represent a valid precise of the rulemaking power but constitute an attempt by an administrative body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51). In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body, and the order will be scrutinized with special care. (State vs. Miles supra). The Miles case involved a statute which authorized the State Game Commission "to adopt, promulgate, amend and/or repeal, and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game. Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer, pay or receive any reward, prize or compensation for the hunting, pursuing, taking, killing or displaying of any game animal, game bird or game fish or any part thereof." Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to the person displaying the largest deer in his store during the open for hunting such game animals. For that act, he was charged with a violation of the rule Promulgated by the State Game Commission. It was held that there was no statute penalizing the display of game. What the statute penalized was the taking of game. If the lawmaking body desired to prohibit the display of game, it could have readily said so. It was not lawful for the administrative board to extend or modify the statute. Hence, the indictment against Miles was quashed. The Miles case is similar to this case.

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WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate jurisdiction and the order of dismissal rendered by the municipal court of Sta. Cruz, Laguna in Criminal Case No. 5429 is affirmed. Costs de oficio. SO ORDERED.

Upon the filing of this petition, we issued a temporary restraining order dated February 6, 1990, to prevent enforcement of the said decision until further orders from this Court. Thereafter, we required a comment from the private respondent, to which the petitioner filed a reply as also directed. The petitioner reiterates and reinforces its argument in the court below and insists that LOI 43 remains in force despite the issuance of PD 1605. It contends that there is no inconsistency between the two measures because the former deals with illegally parked vehicles anywhere in the Philippines whereas the latter deals with the regulation of the flow of traffic in the Metro Manila area only. The two measures may be enforced together because implied repeals are not favored and, furthermore, to look at them another way, LOI 43 is the special law dealing only with illegal parking while PD 1605 is the general law dealing with all other kinds of traffic violations. The special law must of course prevail over the general law. The petitioner also deplores the above-quoted remarks of the trial judge, pointing out that the parties had agreed to limit the issue to whether there was a statutory basis for the act complained of. And even assuming that abuses have been committed in the enforcement of LOI 43, the remedy is not to disregard it or consider it revoked but to prosecute the guilty parties. In his comment, the private respondent argues that LOI 43 has been repealed by PD 1605, which specifies all the sanctions available against the various traffic violations, including illegal parking. He stresses that removal and confiscation of the license plates of illegally parked vehicles is not one of them, the penalties being limited in the decree to imposition of fine and suspension or revocation of driver's licenses or certificates of public convenience, etc. Expressio unius est exclusio alterius. He agrees that the special law prevails over the general law but maintains it is PD 1605 that is the special law because it is applicable only on Metro Manila and LOI 43 that is the general law because it was intended to operate throughout the country. As for his allegation that the challenged practice is a source of graft, he maintains that it was not improper to discuss it in his memorandum because it was pertinent to the central issue under consideration. Finally, he claims that removal and confiscation of the license plate without notice and hearing violates due process because such license plate is a form of property protected by the Bill of Rights against unlawful deprivation. In its reply, the petitioner faults the private respondent for belatedly raising the constitutionality of LOI 43, suggesting faintly that this should not be permitted. In any case, it maintains, the license plate is not property in the constitutional sense, being merely the identification of the vehicle, and its "temporary confiscation" does not deprive the owner of the use of the vehicle itself. Hence, there is no unlawful taking under the due process clause. The petitioner also takes issue with the contention that it is PD 1605 that should be considered the special law because of its limited territorial application. Repeal of LOI 43 on that ground would run counter to the legislative intention as it is in fact in Metro Manila that the problem of illegal parking is most acute. LOI 43, entitled Measures to Effect a Continuing Flow of Transportation on Streets and Highways, was issued on November 28, 1972, with the following pertinent provisions: Motor vehicles that stall on the streets and highways, streets and sidewalks, shall immediately be removed by their owners/users; otherwise said vehicles shall be dealt with and disposed in the manner stated hereunder; 1. For the first offense the stalled or illegally parked vehicle shall be removed, towed and impounded at the expense of the owner, user or claimant; 2. For the second and subsequent offenses, the registry plates of the vehicles shall be confiscated and the owner's certificate of registration cancelled. (Emphasis supplied). PD 1605 (Granting the Metropolitan Manila Commission Central Powers Related to Traffic Management, Providing Penalties, and for Other Purposes) was issued, also by President Marcos, on November 21, 1978, and pertinently provides: Section 1. The Metropolitan Manila Commission shall have the power to impose fines and otherwise discipline drivers and operators of motor vehicles for violations of traffic laws, ordinances, rules and regulations

G.R. No. 91023 July 13, 1990 METROPOLITAN TRAFFIC COMMAND WEST TRAFFIC DISTRICT, petitioner, vs.HON. ARSENIO M. GONONG, in his capacity as Presiding Judge of the Regional Trial Court, Branch 8 at Manila, and DANTE S. DAVID, respondents. Dante S. David for and in his own behalf as private respondent.

CRUZ, J.: We deal here with a practice known to many motorists in Metro Manila: the removal of the license plates of illegally parked vehicles. This was challenged by the private respondent in the regional trial court of Manila, which held the practice unlawful. The petitioner is now before us, urging reversal of the decision for grave abuse of discretion. The original complaint was filed with the said court on August 10, 1989, by Dante S. David, a lawyer, who claimed that the rear license plate, of his car was removed by the Metropolitan Traffic Command while the vehicle was parked on Escolta. He questioned the petitioner's act on the ground not only that the car was not illegally parked but, more importantly, that there was no ordinance or law authorizing such removal. He asked that the practice be permanently enjoined and that in the meantime a temporary restraining order or a writ of preliminary injunction be issued. Judge Arsenio M. Gonong issued a temporary restraining order on August 14, 1989, and hearings on the writ of preliminary injunction were held on August 18, 23, and 25, 1989. The writ was granted on this last date. The parties also agreed to submit the case for resolution on the sole issue of whether there was a law or ordinance authorizing the removal of the license plates of illegally parked vehicles. The parties then submitted simultaneous memoranda in support of their respective positions, following which the respondent judge rendered the assailed decision. In ruling for the complainant, Judge Gonong held that LOI 43, which the defendant had invoked, did not empower it "to detach, remove and confiscate vehicle plates of motor vehicles illegally parked and unattended as in the case at bar. It merely authorizes the removal of said vehicles when they are obstacles to free passage or continued flow of traffic on streets and highways." At any rate, he said, the LOI had been repealed by PD 1605. Moreover, the defendant had not been able to point to any MMC rule or regulation or to any city ordinance to justify the questioned act. On the allegation that the practice was "the root cause of graft and corruption or at the very least the equivalent of street racket among defendant's deployed agents," His Honor made the following pointed observations: At this juncture, it may not be amiss to say, that if the arbitrary and capricious detachment and confiscation of vehicles plates illegally parked and unattended as in the act complained of in the instant case, the image of the man clothed in a traffic or police uniform will be greatly impaired if not cursed with disrespect on the part of those who have suffered at his hands. Worse, he will cease (if he had not already ceased) to be the law-abiding, courageous and valiant protector of a citizen of the Republic that he is meant to be, and instead his real oppressor and enemy, thereby fortifying the contemporaneous public perception that he is a dyed-in-the-wool extortionist if not an unmitigated chiseler. 1 It bears noting that this petition should have been filed first with the Court of Appeals, which has concurrent jurisdiction with this Court on decisions of the regional trial courts involving questions of law. However, in view of the importance of the issue raised, we have decided to take cognizance thereof under Rule 65 of the Rules of Court so we can address and resolve the question directly.

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in Metropolitan Manila in such amounts and under such penalties as are herein prescribed. For his purpose, the powers of the Land Transportation Commission and the Board of Transportation under existing laws over such violations and punishment thereof are hereby transferred to the Metropolitan Manila Commission. When the proper penalty to be imposed is suspension or revocation of driver's license or certificate of public convenience, the Metropolitan Manila Commission or its representatives shall suspend or revoke such license or certificate. The suspended or revoked driver's license or the report of suspension or revocation of the certificate of public convenience shall be sent to the Land Transportation Commission or the Board of Transportation, as the case may be, for their records update. xxx xxx xxx Section 3. Violations of traffic laws, ordinances, rules and regulations, committed within a twelve-month period, reckoned from the date of birth of the licensee, shall subject the violator to graduated fines as follows: P10.00 for the first offense, P20.00 for the second offense, P50.00 for the third offense, a one-year suspension of driver's license for the fourth offense, and a revocation of the driver' license for the fifth offense: Provided, That the Metropolitan Manila Commission may impose higher penalties as it may deem proper for violations of its ordinances prohibiting or regulating the use of certain public roads, streets or thoroughfares in Metropolitan Manila. xxx xxx xxx Section 5. In case of traffic violations, the driver's license shall not be confiscated but the erring driver shall be immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall state the violation committed, the amount of fine imposed for the violation and an advice that he can make payment to the city or municipal treasurer where the violation was committed or to the Philippine National Bank or Philippine Veterans Bank or their branches within seven days from the date of issuance of the citation ticket. If the offender fails to pay the fine imposed within the period herein prescribed, the Metropolitan Manila Commission or the law enforcement agency concerned shall endorse the case to the proper fiscal for appropriate proceedings preparatory to the filing of the case with the competent traffic court, city or municipal court. If at the time a driver renews his driver's license and records show that he has an unpaid fine, his driver's license shall not be renewed until he has paid the fine and corresponding surcharges. xxx xxx xxx Section 8. Insofar as the Metropolitan Manila area is concerned, all laws, decrees, orders, ordinances, rules and regulations, or parts thereof inconsistent herewith are hereby repealed or modified accordingly. (Emphasis supplied). A careful reading of the above decree will show that removal and confiscation of the license plate of any illegally parked vehicle is not among the specified penalties. Moreover, although the Metropolitan Manila Commission is authorized by the decree to "otherwise discipline" and "impose higher penalties" on traffic violators, whatever sanctions it may impose must be "in such amounts and under such penalties as are herein prescribed." The petitioner has not pointed to any such additional sanctions, relying instead on its argument that the applicable authority for the questioned act is LOI 43. The petitioner stresses that under the decree, "the powers of the Land Transportation Commission and the Board of Transportation over such violations and punishment thereof are (hereby) transferred to the Metropolitan Manila Commission," and one of such laws is LOI 43. The penalties prescribed by the LOI are therefore deemed incorporated in PD 1605 as additional to the other penalties therein specified. It would appear that what the LOI punishes is not a traffic violation but a traffic obstruction, which is an altogether different offense. A violation imports an intentional breach or disregard of a rule, as where a driver leaves his vehicle in a no-parking area against a known and usually visible prohibition. Contrary to the common impression, LOI 43 does not punish illegal parking per se but parking of stalled vehicles, i.e., those that involuntarily stop on the road due to some unexpected trouble such as engine defect, lack of gasoline, punctured tires, or other similar cause. The vehicle is deemed illegally parked because it

obstructs the flow of traffic, but only because it has stalled. The obstruction is not deliberate. In fact, even the petitioner recognizes that "there is a world of difference between a stalled vehicle and an illegally parked and unattended one" and suggests a different treatment for either. "The first means one which stopped unnecessarily or broke down while the second means one which stopped to accomplish something, including temporary rest. 2 LOI 43 deals with motor vehicles "that stall on the streets and highways' and not those that are intentionally parked in a public place in violation of a traffic law or regulation. The purpose of the LOI evidently is to discipline the motorist into keeping his vehicle in good condition before going out into the streets so as not to cause inconvenience to the public when the car breaks down and blocks other vehicles. That is why, for the first offense, the stalled vehicle is immediately towed at the owner's expense to clear the street of the traffic obstruction. Where it appears that the owner has not learned from his first experience because the vehicle has stalled again, presumably due to his failure to repair it, the penalty shall be confiscation of the license plate and cancellation of the certificate of registration petition. It is worth noting that it is not the driver's license that is confiscated and canceled when the vehicle stalls on a public street. The LOI goes against the vehicle itself. The object of the measure is to ensure that only motor vehicles in good condition may use the public streets, and this is effected by confiscating the license plates and canceling the certificates of registration of those vehicles that are not roadworthy. In the case of the private respondent, it is not alleged or shown that his vehicle stalled on a public thoroughfare and obstructed the flow of traffic. The charge against him is that he purposely parked his vehicle in a no parking area (although this is disputed by him). itc-asl The act, if true, is a traffic violation that may not be punished under LOI 43. The applicable law is PD 1605, which does not include removal and confiscation of the license plate of the vehicle among the imposable penalties. Indeed, even if LOI 43 were applicable, the penalty of confiscation would still not be justified as it has not been alleged, much less shown, that the illegal parking was a second or subsequent offense. That circumstance must be established at a trial before a court of justice where the vehicle owner shall have a right to be heard in his defense. The second or subsequent offense cannot be simply pronounced by the traffic authorities without hearing and without proof. Confiscation of the registry plate without a judicial finding that the offense charge is a second or subsequent one would, unless the owner concedes this point, be invalid. While it is true that the license plate is strictly speaking not a property right, it does not follow that it may be removed or confiscated without lawful cause. Due process is a guaranty against all forms of official arbitrariness. Under the principle that ours is a government of laws and not of men, every official must act by and within the authority of a valid law and cannot justify the lack of it on the pretext alone of good intentions. It is recalled that more than seventy years ago, the mayor of Manila deported one hundred seventy prostitutes to Davao for the protection of the morals and health of the city. This Court acknowledged his praiseworthy purpose but just the same annulled his unauthorized act, holding that no one could take the law into his own hands. 3 We can rule no less in the case before us. We find that there is no inconsistency between LOI 43 and PD 1605, whichever is considered the special law either because of its subject or its territorial application. The former deals with motor vehicles that have stalled on a public road while the latter deals with motor vehicles that have been deliberately parked in a no-parking area; and while both cover illegal parking of motor vehicles, the offense is accidental under the first measure and intentional under the second. This explains why the sanctions are different. The purpose of the LOI is to discourage the use of the public streets by motor vehicles that are likely to break down while that of the decree is to penalize the driver for his defiance of the traffic laws. As it has not been shown that the private respondent's motor vehicle had stalled because of an engine defect or some other accidental cause and, no less importantly, that it had stalled on the road for a second or subsequent time, confiscation of the license plate cannot be justified under LOI 43. And neither can that sanction be sustained

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under PD 1605, which clearly provides that "in case of traffic violations, (even) the driver's license shall not be confiscated," let alone the license plate of the motor vehicle. If at all, the private respondent may be held liable for illegal parking only and subjected to any of the specific penalties mentioned in Section 3 of the decree. We recognize the problem of the traffic policeman who comes upon an illegally parked and unattended vehicle and is unable to serve a citation on the offending driver who is nowhere in sight. But that problem is not addressed to the courts; it is for the legislative and administrative authorities to solve. What is clear to the Court is that the difficulty cannot be avoided by the removal of the license plate of the offending vehicle because the petitioner has not shown that this penalty is authorized by a valid law or ordinance. The petitioner complains that the respondent judge did not confine himself to the issue agreed upon by the parties and made gratuitous accusations that were not only irrelevant but virtually condemned the whole traffic force as corrupt. Assuming that this issue was indeed not properly raised at the trial, the Court is nevertheless not inhibited from considering it in this proceeding, on the basis of its own impressions on the matter. This Court is not isolated from the mainstream of society and secluded in a world of its own, unconcerned with the daily lives of the rest of the nation. On the contrary, the members of this Court mix with the people and know their problems and complaints. And among these are the alleged abuses of the police in connection with the issue now before us. It is claimed that the removal of the license plates of illegally parked motor vehicles in Metro Manila has become a veritable gold mine for some police officers. To be sure, we do not have hard, provable facts at hand but only vague and unsubstantiated rumors that could be no more than malicious and invented charges. Nevertheless, these accusations have become too prevalent and apparently too persuasive that they cannot be simply swept under the rug. The widespread report is that civilian "agents," mostly street urchins under the control and direction of certain policemen, remove these license plates from illegally parked vehicles and later discreetly suggest to the owners that these may be retrieved for an unofficial fee. This ranges from P50.00 to P200.00, depending on the type of vehicle. If the owner agrees, payment is usually made and the license plate returned at a private rendezvous. No official receipt is issued. Everything is done quietly. The owners, it is said, prefer this kind of fast settlement to the inconvenience of an official proceeding that may entail not only the payment of a higher fine but also other administrative impositions, like attendance at a traffic seminar. The Court is not saying that these reports are true nor is it stigmatizing the entire police force on the basis of these unsubstantiated charges. But it does believe and stress that the proper authorities should take official notice of these reports instead of blandly dismissing them as mere canards that do not deserve their attention and concern. An inquiry is in our view indicated. The old adage that where there's smoke there's fire is not necessarily true and can hardly be the rationale of a judicial conclusion; but the Court feels just the same that serious steps should be taken, especially because of the persistence of these charges, to determine the source of the smoke. We realize the seriousness of our traffic problems, particularly in Metro Manila, and commend the earnest efforts of the police to effect a smoother flow of vehicles in the public thoroughfares for the comfort and convenience of the people. But we must add, as a reminder that must be made, that such efforts must be authorized by a valid law, which must clearly define the offenses proscribed and as clearly specify the penalties prescribed. WHEREFORE, the petition is DISMISSED. The Court holds that LOI 43 is valid but may be applied only against motor vehicles that have stalled in the public streets due to some involuntary cause and not those that have been intentionally parked in violation of the traffic laws. The challenged decision of the trial court is AFFIRMED in so far as it enjoins confiscation of the private respondent's license plate for alleged deliberate illegal parking, which is subject to a different penalty. The temporary restraining order dated February 6, 1990, is LIFTED. SO ORDERED.

G.R. No. 162203

April 14, 2004

AKLAT-ASOSASYON PARA SA KAUNLARAN NG LIPUNAN AT ADHIKAIN PARA SA TAO, INC., petitioner, vs.COMMISSION ON ELECTIONS (COMELEC), respondent. RESOLUTION TINGA, J.: For resolution is the Petition1 for certiorari and mandamus filed by Aklat-Asosasyon Para Sa Kaunlaran Ng Lipunan At Adhikain Para Sa Tao, Inc. (Aklat) assailing the Commission on Elections (Comelec) Resolution2 dated January 8, 2004, which dismissed its Petition3 for requalification as a party-list organization, and the Resolution4 dated February 13, 2004, which denied its Motion for Reconsideration.5 Briefly, the facts are as follows: On November 20, 2003, Aklat filed a Petition for declaration of requalification as a party-list organization for purposes of the May 2004 elections. It alleged in its petition that it participated in the 2001 elections but was disqualified by the Comelec as it was found not to have complied with the guidelines set by the Court in the case of Ang Bagong Bayani-OFW Labor Party v. Comelec (Bagong Bayani case)6 for party-list organizations to qualify and participate as such in the party-list elections. Accordingly, Aklat "re-organized itself in order that it will comply with the 8-point guidelines enunciated by the Supreme Court"7 in the said case. In its assailed Resolution dated January 8, 2004, the Comelec dismissed the petition stating that Aklat cannot be considered as an organization representing the marginalized and underrepresented groups as identified under Section 5 of Republic Act No. 7941 (R.A. 7941). According to the Comelec, Aklats statement that it has reorganized itself does not cure this defect as "there is nothing in the petition which will help us identify what particular marginalized and underrepresented group AKLAT is now representing."8 Further, the Comelec held that "AKLAT lumped all the sectoral groups imaginable under the classification of regular members just to convince us that it is now cured of its defect."9 On January 15, 2004, Aklat filed a Motion for Reconsideration dated January 14, 2004, substantially averring that it has reorganized itself and taken the necessary steps to make it an organization of, by and for the marginalized and underrepresented groups of society, particularly the indigenous cultural communities and the youth. To this end, it has allegedly effected a fundamental change in its purposes as an organization, nature of its membership and focus of its programs.10 The Comelec denied the motion in its questioned Resolution dated February 13, 2004, on three grounds, namely: the petition was filed beyond the deadline set by the Comelec in Resolution No. 6320 for registration of party-list organizations; the petition was not one for requalification as Aklat was never a registered party-list organization having failed to meet the eight-point guidelines set by the Court in the Bagong Bayani case; and that its decision not to extend the deadline for registration of party-list organizations is valid, the Comelec being in the best position to make such a determination.11 In the instant Petition, Aklat asserts that under Section 5 of R.A. 7941, petitions for registration as a party-list organization may be filed not later than ninety (90) days before the elections. It therefore had until February 10, 2004, the ninetieth (90th) day before the elections on May 10, 2004, within which to file its petition. Hence, its petition, which was filed on November 20, 2003, was filed within the allowed period. Section 5 of Resolution No. 632012 which requires the filing of such petitions not later than September 30, 2003, is null and void as it amends R.A. 7941. It further maintains that it has complied with the eight-point guidelines set in the Bagong Bayani case. Allegedly, Aklat has a total membership of over 4,000 persons who belong to the marginalized and underrepresented groups. It has established information and coordination centers throughout the country for the benefit and in representation of indigenous cultural communities, farm and factory workers including fisherfolk and the youth. Aklat also asserts that it is

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different from Asosasyon Para sa Kaunlaran ng Industria ng Aklat (A.K.L.A.T.) which was previously de-registered by the Comelec. Because of all these, Aklat contends that the Comelec gravely abused its discretion when it denied its petition for re-qualification. The Office of the Solicitor General (OSG) filed a Comment dated March 26, 2004, stating that the Comelec did not commit grave abuse of discretion in issuing the assailed Resolutions. According to the OSG, Resolution No. 6320 is not in conflict with and is, in fact, germane to the purpose of R.A. 7941. It was within the scope of the authority granted to the Comelec that it issued Resolution No. 6320 setting the deadline for filing petitions for registration under the partylist system on September 30, 2003. In line with the purpose of R.A. 7941 to enable marginalized sectors to actively participate in legislation, the Comelec must be given sufficient time to evaluate all petitions for registration, at the same time allowing oppositions to be filed to the end that only those truly qualified may be accredited under the party-list system. Besides, Republic Act No. 8436 13 allows the Comelec to change the periods and dates prescribed by law for certain pre-election acts to ensure their accomplishment. The OSG further maintains that the petition for re-qualification failed to comply with the provisions of Resolution No. 6320. According to the OSG, the petition was not properly verified there being no showing that Mr. Dominador Buhain, the signatory of the verification and certification of non-forum shopping, was duly authorized by Aklat to verify or cause the preparation and filing of the petition on its behalf. Moreover, Aklat was registered with the Securities and Exchange Commission only on October 20, 2003, a month before it filed its petition for re-qualification. Hence, it has not existed for a period of at least one (1) year prior to the filing of the petition as required by Section 6 of Resolution No. 6320. The OSG also points out that Aklat failed to support its petition with the documents required under Section 7 of Resolution No. 6320, namely: a list of its officers and members particularly showing that the majority of its membership belongs to the marginalized and underrepresented sectors it seeks to represent, and a track record or summary showing that it represents and seeks to uplift the marginalized and underrepresented sectors of society. Moreover, the OSG notes that the incorporators and directors of Aklat are invariably known as pillars of the book publishing industry or authors. Hence, even as re-organized, Aklat remains to be an association of authors, book publishers, and publishing companies, rather than the organization of indigenous cultural communities, farm and factory workers, fisherfolk and youth it claims to be. For its part, the Comelec filed a Comment dated March 29, 2004, stating that the period of ninety (90) days prescribed in R.A. 7941 refers to the prohibitive period beyond which petitions for registration may no longer be filed. Furthermore, the documents submitted by Aklat do not prove that its members belong to the marginalized and underrepresented sectors of society. Aklats contention that Resolution No. 6320 is null and void as it amends and amplifies R.A. 7941 deserves scant consideration. R.A. 7941 provides: Sec. 5. Registration.Any organized group of persons may register as a party, organization or coalition for purposes of the party-list system by filing with the COMELEC not later than ninety (90) days before the election a petition verified by its president or secretary stating its desire to participate in the party-list system as a national, regional or sectoral party or organization or a coalition of such parties or organizations, attaching thereto its constitution, by-laws, platform or program of government, list of officers, coalition agreement and other relevant information as the COMELEC may require: Provided, That the sectors shall include labor, peasant, fisherfolk, urban poor, indigenous cultural communities, elderly, handicapped, women, youth, veterans, overseas workers, and professionals[Italics supplied.] By its wording, R.A. 7941 itself supports the Comelecs position that the period stated therein refers to the prohibitive period beyond which petitions for registration should no longer be filed nor entertained. Put elsewise, it is simply the minimum countback period which is not subject to reduction since it is prescribed by law, but it is susceptible of protraction on account of administrative necessities and other exigencies perceived by the poll body. Verily, the Comelec has the power to promulgate the necessary rules

and regulations to enforce and administer election laws. This power includes the determination, within the parameters fixed by law, of appropriate periods for the accomplishment of certain pre-election acts like filing petitions for registration under the party-list system. This is exactly what the Comelec did when it issued its Resolution No. 6320 declaring September 30, 2003, as the deadline for filing petitions for registration under the party-list system. Considering these, as well as the multifarious pre-election activities that the Comelec is mandated to undertake, the issuance of its Resolution No. 6320 cannot be considered tainted with grave abuse of discretion. Neither is there grave abuse of discretion in the Comelecs denial of Aklats petition on the ground that it failed to substantiate its claim that it represents the marginalized and underrepresented sectors of society. It should be noted that it was Aklat which asserted in its petition before the poll body that it has re-organized and is now applying for re-qualification after its de-registration for failure to comply with the guidelines set forth in the Bagong Bayani case. Thus, the Comelec cannot be faulted for relying on its earlier finding, absent any evidence in Aklats petition to the contrary, that Aklat is not an organization representing the marginalized and underrepresented sectors, but is actually a business interest or economic lobby group which seeks the promotion and protection of the book publishing industry. Significantly, Aklat and A.K.L.A.T. have substantially the same incorporators. In fact, four (4) of Aklats six (6) incorporators 14 are also incorporators of A.K.L.A.T.15 This substantial similarity is hard to ignore and bolsters the conclusion that the supposed re-organization undertaken by Aklat is plain window-dressing as it has not really changed its character as a business interest of persons in the book publishing industry. The Court observes that Aklats articles of incorporation and document entitled The Facts About Aklat which were attached to its petition for re-qualification contain general averments that it supposedly represents marginalized groups such as the youth, indigenous communities, urban poor and farmers/fisherfolk. These general statements do not measure up to the first guideline set by the Bagong Bayani case for screening party-list participants, i.e., that "the political party, sector, organization or coalition must represent the marginalized and underrepresented groups identified in Section 5 of R.A. 7941. In other words, it must showthrough its constitution, articles of incorporation, bylaws, history, platform of government and track record that it represents and seeks to uplift marginalized and underrepresented sectors. Verily, majority of its membership should belong to the marginalized and underrepresented. And it must demonstrate that in a conflict of interests, it has chosen or is likely to choose the interest of such sectors."16 In this regard, the Court notes with approval the OSGs contention that Aklat has no track record to speak of concerning its representation of marginalized and underrepresented constituencies considering that it has been in existence for only a month prior to the filing of its petition for re-qualification. It should finally be emphasized that the findings of fact by the Comelec, or any other administrative agency exercising particular expertise in its field of endeavor, are binding on the Supreme Court. 17 In view of the foregoing, the Comelec can, by no means, be held to have committed grave abuse of discretion to justify the setting aside of the assailed Resolutions. ACCORDINGLY, the Petition is DISMISSED. SO ORDERED.

G.R. No. 118712 October 6, 1995 LAND BANK OF THE PHILIPPINES, petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents. G.R. No. 118745 October 6, 1995

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DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents. FRANCISCO, R., J.: It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As eloquently stated by Justice Isagani Cruz: . . . social justice or any justice for that matter is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law. 2 In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution. Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3 Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private respondents' Petition for Certiorari and Mandamus and ruled as follows: WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED: a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for the opening of trust accounts in lieu of deposits in cash or bonds; b) Respondent Landbank is ordered to immediately deposit not merely "earmark", "reserve" or "deposit in trust" with an accessible bank designated by respondent DAR in the names of the following petitioners the following amounts in cash and in government financial instruments within the parameters of Sec. 18 (1) of RA 6657: P 1,455,207.31 Pedro L. Yap P 135,482.12 Heirs of Emiliano Santiago P 15,914,127.77 AMADCOR; c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited amounts without prejudice to the final determination of just compensation by the proper authorities; and d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to determine the just compensation for the lands of the petitioners giving the petitioners 15 days from notice within which to submit evidence and to 2) decide the cases within 30 days after they are submitted for decision. 4 Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for reconsideration. Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657). Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation of their properties, and the

Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same. Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent Court of Appeals for proper determination and disposition. As found by respondent court , the following are undisputed: Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6). The above allegations are not disputed by any of the respondents. Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in November and December 1990, without notice to the petitioners, the Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo, p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133). The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99). Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges with respect to its properties located in San Francisco, Quezon that the properties of AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a summary administrative proceeding to determine compensation of the property covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9) The above allegations are not disputed by the respondents except that respondent Landbank claims that petitioner failed to participate in the

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DARAB proceedings (land valuation case) despite due notice to it (Rollo, p. 100). 8 Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds. 10 Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case of Association of Small Landowners in the Philippines , Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12 For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13 On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14 Petitioners filed a motion for reconsideration but respondent court denied the same. 15 Hence, the instant petitions. On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however, denied the motion and instead required the respondents to file their comments. 17 Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for just compensation. Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit. Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to promulgate rules and regulations in implementing the declared policies of RA 6657. The contention is untenable. Section 16(e) of RA 6657 provides as follows: Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied) It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot extend the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is the former that prevails. 20 In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void. Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the negative. The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22 The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well-accepted principle of eminent domain. xxx xxx xxx The CARP Law, for its part conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either. xxx xxx xxx Hence the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected. Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found that: . . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully in money" even as the Supreme Court admits in the same case "that the traditional medium for the payment of just compensation is money and no other" the Supreme Court in said case did not abandon the "recognized rule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just

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compensation." 23 (Emphasis supplied) We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred. The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify. Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that: . . . within the context of the State's inherent power of eminent domain, just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss . 24 (Emphasis supplied) The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally important because social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. 26 WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed decision is AFFIRMED in toto. SO ORDERED.

petitioners, vs.DILG Secretary ROBERT Z. BARBERS and DILG Undersecretary MANUEL SANCHEZ, respondents. D E C I S I O N TINGA, J.: At bottom, the present petition inquires into the essential nature of the Liga ng mga Barangay and questions the extent of the power of Secretary of the Department of Interior and Local Government (DILG), as alter ego of the President. More immediately, the petition disputes the validity of the appointment of the DILG as the interim caretaker of the Liga ng mga Barangay. On 11 June 1997, private respondent Manuel A. Rayos [as petitioner therein], Punong Barangay of Barangay 52, District II, Zone 5, District II, Caloocan City, filed a petition for prohibition and mandamus, with prayer for a writ of preliminary injunction and/or temporary restraining order and damages before the Regional Trial Court (RTC) of Caloocan,1 alleging that respondent therein Alex L. David [now petitioner], Punong Barangay of Barangay 77, Zone 7, Caloocan City and then president of the Liga Chapter of Caloocan City and of the Liga ng mga Barangay National Chapter, committed certain irregularities in the notice, venue and conduct of the proposed synchronized Liga ng mga Barangay elections in 1997. According to the petition, the irregularities consisted of the following: (1) the publication of the notice in the Manila Bulletin but without notifying in writing the individual punong barangays of Caloocan City;2 (2) the Notice of Meeting dated 08 June 1997 for the Liga Chapter of Caloocan City did not specify whether the meeting scheduled on 14 June 1997 was to be held at 8:00 a.m. or 8:00 p.m., and worse, the meeting was to be held in Lingayen, Pangasinan; 3 and (3) the deadline for the filing of the Certificates of Candidacy having been set at 5:00 p.m. of the third "day prior to the above election day", or on 11 June 1997,4 Rayos failed to meet said deadline since he was not able to obtain a certified true copy of the COMELEC Certificate of Canvas and Proclamation of Winning Candidate, which were needed to be a delegate, to vote and be voted for in the Liga election. On 13 June 1997, the Executive Judge issued a temporary restraining order (TRO), effective for seventy-two (72) hours, enjoining the holding of the general membership and election meeting of Liga Chapter of Caloocan City on 14 June 1975.5 However, the TRO was allegedly not properly served on herein petitioner David, and so the election for the officers of the LigaCaloocan was held as scheduled.6 Petitioner David was proclaimed President of the Liga-Caloocan, and thereafter took his oath and assumed the position of ex-officio member of the Sangguniang Panlungsod of Caloocan. On 17 July 1997, respondent Rayos filed a second petition, this time for quo warranto, mandamus and prohibition, with prayer for a writ of preliminary injunction and/or temporary restraining order and damages, against David, Nancy Quimpo, Presiding Officer of the Sangguniang Panlungsod of Caloocan City, and Secretary Barbers. 7 Rayos alleged that he was elected President of the Liga Caloocan Chapter in the elections held on 14 June 1997 by the members of the Caloocan Chapter pursuant to their Resolution/Petition No. 001-97. 8 On 18 July 1997, the presiding judge granted the TRO, enjoining therein respondents David, Quimpo and Secretary Barbers from proceeding with the synchronized elections for the Provincial and Metropolitan Chapters of the Liga scheduled on 19 July 1997, but only for the purpose of maintaining the status quo and effective for a period not exceeding seventy-two (72) hours.9 Eventually, on 18 July 1997, at petitioner Davids instance, Special Civil Action (SCA) No. C-512 pending before Branch 126 was consolidated with SCA No. C-508 pending before Branch 124.10 Before the consolidation of the cases, on 25 July 1997, the DILG through respondent Secretary Barbers, filed in SCA No. C-512 an Urgent Motion,11 invoking the Presidents power of general supervision over all local government units and seeking the following reliefs: WHEREFORE, in the interest of the much-needed delivery of basic services to the people, the maintenance of public order and to further protect the interests of the forty-one thousand barangays all over the country, herein respondent respectfully prays: a) That the Department of the Interior and Local Government (DILG),

G.R. No. 130775

September 27, 2004

THE NATIONAL LIGA NG MGA BARANGAY, represented by ALEX L. DAVID in his capacity as National President and for his own Person, President ALEX L. DAVID, petitioners, vs.HON. VICTORIA ISABEL A. PAREDES, Presiding Judge, Regional Trial Court, Branch 124, Caloocan City, and THE DEPARTMENT OF INTERIOR and LOCAL GOVERNMENT, represented the HON. SECRETARY ROBERT Z. BARBERS and MANUEL A. RAYOS, respondents. x--------------------------------------------------------------------------x G.R. No. 131939 September 27, 2004

LEANDRO YANGOT, BONIFACIO LACWASAN and BONY TACIO,

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pursuant to its delegated power of general supervision, be appointed as the Interim Caretaker to manage and administer the affairs of the Liga, until such time that the new set of National Liga Officers shall have been duly elected and assumed office; ...12 The prayer for injunctive reliefs was anchored on the following grounds: (1) the DILG Secretary exercises the power of general supervision over all government units by virtue of Administrative Order No. 267 dated 18 February 1992; (2) the Liga ng mga Barangay is a government organization; (3) undue interference by some local elective officials during the Municipal and City Chapter elections of the Liga ng mga Barangay; (4) improper issuance of confirmations of the elected Liga Chapter officers by petitioner David and the National Liga Board; (5) the need for the DILG to provide remedies measured in view of the confusion and chaos sweeping the Liga ng mga Barangay and the incapacity of the National Liga Board to address the problems properly. On 31 July 1997, petitioner David opposed the DILGs Urgent Motion, claiming that the DILG, being a respondent in the case, is not allowed to seek any sanction against a co-respondent like David, such as by filing a cross-claim, without first seeking leave of court. 13 He also alleged that the DILGs request to be appointed interim caretaker constitutes undue interference in the internal affairs of the Liga, since the Liga is not subject to DILG control and supervision.14 Three (3) days after filing its Urgent Motion, on 28 July 1997, and before it was acted upon by the lower court, the DILG through then Undersecretary Manuel Sanchez, issued Memorandum Circular No. 97-176.15 It cited the reported violations of the Liga ng mga Barangay Constitution and By-Laws by David and "widespread chaos and confusion" among local government officials as to who were the qualified ex-officio Liga members in their respective sangunians.16 Pending the appointment of the DILG "as the Interim Caretaker of the Liga ng mga Barangay by the court and until the officers and board members of the national Liga Chapter have been elected and have assumed office," the Memorandum Circular directed all provincial governors, vice governors, city mayors, city vice mayors, members of the sangguniang panlalawigan and panlungsod, DILG regional directors and other concerned officers, as follows: 1. All concerned are directed not to recognize and/or honor any Liga Presidents of the Provincial and Metropolitan Chapters as ex-officio members of the sanggunian concerned until further notice from the Courts or this Department; 2. All concerned are directed to disregard any pronouncement and/or directive issued by Mr. Alex David on any issue or matter relating to the affairs of the Liga ng mga Barangay until further notice from the Courts or this Department.17 On 04 August 1997, public respondent Judge Victoria Isabel A. Paredes issued the assailed order, 18 the pertinent portions of which read, thus: The authority of the DILG to exercise general supervisory jurisdiction over local government units, including the different leagues created under the Local Government Code of 1991 (RA 7160) finds basis in Administrative Order No. 267 dated February 18, 1992. Specifically, Section 1 (a) of the said Administrative Order provides a broad premise for the supervisory power of the DILG. Administratively, the DILGs supervision has been tacitly recognized by the local barangays, municipalities, cities and provinces as shown by the evidences presented by respondent David himself (See Annexes "A" to "C"). The fact that the DILG has sought to refer the matters therein to the National Liga Board/Directorate does not ipso facto mean that it has lost jurisdiction to act directly therein. Jurisdiction is conferred by law and cannot be claimed or lost through agreements or inaction by individuals. What respondent David may term as "interference" should caretakership be allowed, this Court would rather view as a necessary and desirable corollary to the exercise of supervision.19 Political motivations must not preclude, hamper, or obstruct the delivery of basic services and the perquisites of public service. In this case, the fact of confusion arising from conflicting appointments, nonaction, and uninformed or wavering decisions of the incumbent National Liga Board/Directorate, having been satisfactorily established, cannot simply be brushed aside as being politically motivated or arising therefrom. It is incumbent, therefore, that the DILG exercise a more active role in the supervision of the affairs and operations of the

National Liga Board/ Directorate at least until such time that the regular National Liga Board/Directorate may have been elected, qualified and assumed office.20 xxx WHEREFORE, premises considered, the Urgent Motion of the DILG for appointment as interim caretaker, until such time that the regularly elected National Liga Board of Directors shall have qualified and assumed office, to manage and administer the affairs of the National Liga Board, is hereby GRANTED.21 On 11 August 1997, petitioner David filed an urgent motion for the reconsideration of the assailed order and to declare respondent Secretary Barbers in contempt of Court. 22 David claimed that the 04 August 1997 order divested the duly elected members of the Board of Directors of the Liga National Directorate of their positions without due process of law. He also wanted Secretary Barbers declared in contempt for having issued, through his Undersecretary, Memorandum Circular No. 97-176, even before respondent judge issued the questioned order, in mockery of the justice system. He implied that Secretary Barbers knew about respondent judges questioned order even before it was promulgated.23 On 11 August 1997, the DILG issued Memorandum Circular No. 97193,24 providing supplemental guidelines for the 1997 synchronized elections of the provincial and metropolitan chapters and for the election of the national chapter of the Liga ng mga Barangay. The Memorandum Circular set the synchronized elections for the provincial and metropolitan chapters on 23 August 1997 and for the national chapter on 06 September 1997. On 12 August 1997, the DILG issued a Certificate of Appointment 25 in favor of respondent Rayos as president of the Liga ng mga Barangay of Caloocan City. The appointment purportedly served as Rayoss "legal basis for ex-officio membership in the Sangguniang Panlungsod of Caloocan City" and "to qualify and participate in the forthcoming National Chapter Election of the Liga ng mga Barangay."26 On 23 August 1997, the DILG conducted the synchronized elections of Provincial and Metropolitan Liga Chapters. Thereafter, on 06 September 1997, the National Liga Chapter held its election of officers and board of directors, wherein James Marty L. Lim was elected as President of the National Liga.27 On 01 October 1997, public respondent judge denied Davids motion for reconsideration,28 ruling that there was no factual or legal basis to reconsider the appointment of the DILG as interim caretaker of the National Liga Board and to cite Secretary Barbers in contempt of court.29 On 10 October 1997, petitioners filed the instant Petition for Certiorari30 under Rule 65 of the Rules of Court, seeking to annul public respondent judges orders of 04 August 1997 and 01 October 1997. They dispute the latters opinion on the power of supervision of the President under the Constitution, through the DILG over local governments, which is the same as that of the DILGs as shown by its application of the power on the Liga ng mga Barangay. Specifically, they claim that the public respondent judges designation of the DILG as interim caretaker and the acts which the DILG sought to implement pursuant to its designation as such are beyond the scope of the Chief Executives power of supervision. To support the petition, petitioners argue that under Administrative Order No. 267, Series of 1992, the power of general supervision of the President over local government units does not apply to the Liga and its various chapters precisely because the Liga is not a local government unit, contrary to the stance of the respondents.31 Section 507 of the Local Government Code (Republic Act No. 7160) 32 provides that the Liga shall be governed by its own Constitution and By-laws. Petitioners posit that the duly elected officers and directors of the National Liga elected in 1994 had a vested right to their positions and could only be removed therefrom for cause by affirmative vote of two-thirds (2/3) of the entire membership pursuant to the Liga Constitution and By-Laws, and not by mere issuances of the DILG, even if bolstered by the dubious authorization of respondent judge. 33 Thus, petitioners claim that the questioned order divested the then incumbent officers and directors of the Liga of their right to their respective offices without due process of law.

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Assuming the Liga could be subsumed under the term "local governments," over which the President, through the DILG Secretary, has the power of supervision,34 petitioners point out that still there is no legal or constitutional basis for the appointment of the DILG as interim caretaker.35 They stress that the actions contemplated by the DILG as interim caretaker go beyond supervision, as what it had sought and obtained was authority to alter, modify, nullify or set aside the actions of the Liga Board of Directors and even to substitute its judgment over that of the latter which are all clearly one of control. 36 Petitioners question the appointment of Rayos as Liga-Caloocan President since at that time petitioner David was occupying that position which was still the subject of the quo warranto proceedings Rayos himself had instituted.37 Petitioners likewise claim that DILG Memorandum Circular No. 97-193, providing supplemental guidelines for the synchronized elections of the Liga, replaced the implementing rules adopted by the Liga pursuant to its Constitution and By-laws. 38 In fact, even before its appointment as interim caretaker, DILG specifically enjoined all heads of government units from recognizing petitioner David and/or honoring any of his pronouncements relating to the Liga.39 Petitioners rely on decision in Taule v. Santos,40 which, they claim, already passed upon the "extent of authority of the then Secretary of Local Government over the katipunan ng mga barangay or the barangay councils," as it specifically ruled that the "Secretary [of Local Government] has no authority to pass upon the validity or regularity of the election of officers of the katipunan."41 For his part, respondent Rayos avers that since the Secretary of the DILG supervises the acts of local officials by ensuring that they act within the scope of their prescribed powers and functions and since members of the various leagues, such as the Liga in this case, are themselves officials of local government units, it follows that the Liga members are subject to the power of supervision of the DILG. 42 He adds that as the DILGs management and administration of the Liga affairs was limited only to the conduct of the elections, its actions were consistent with its rule-making power and power of supervision under existing laws.43 He asserts that in assailing the appointment of the DILG as interim caretaker, petitioners failed to cite any provision of positive law in support of their stance. Thus, he adds, "if a law is silent, obscure or insufficient, a judge may apply a rule he sees fit to resolve the issue, as long as the rule chosen is in harmony with general interest, order, morals and public policy," 44 in consonance with Article 9 of the Civil Code.45 On the other hand, it is quite significant that the Solicitor General has shared petitioners position. He states that the DILGs act of managing and administering the affairs of the National Liga Board are not merely acts of supervision but plain manifestations of control and direct takeover of the functions of the National Liga Board,46 going beyond the limits of the power of general supervision of the President over local governments.47 Moreover, while the Liga may be deemed a government organization, it is not strictly a local government unit over which the DILG has supervisory power.48 Meanwhile, on 24 September 1998, James Marty L. Lim, the newly elected President of the National Liga, filed a Motion for Leave to File Comment in Intervention,49 with his Comment in Intervention attached,50 invoking the validity of the DILGs actions relative to the conduct of the Liga elections.51 In addition, he sought the dismissal of the instant petition on the following grounds: (1) the issue of validity or invalidity of the questioned order has been rendered moot and academic by the election of Liga officers; (2) the turn-over of the administration and management of Liga affairs to the Liga officers; and (3) the recognition and acceptance by the members of the Liga nationwide.52 In the interim, another petition, this time for Prohibition with Prayer for a Temporary Restraining Order,53 was filed by several presidents of Liga Chapters, praying that this Court declare the DILG Secretary and Undersecretary are not vested with any constitutional or legal power to exercise control or even supervision over the National Liga ng mga Barangay, nor to take over the functions of its officers or suspend its constitution; and declare void any and all acts committed by respondents therein in connection with their caretakership of the Liga.54 The petition was consolidated with G.R. No. 130775, but it was eventually dismissed because the petitioners failed to submit an affidavit of service and proof of service of the petition.55

Meanwhile, on 01 December 1998, petitioner David died and was substituted by his legal representatives.56 Petitioners have raised a number of issues.57 Integrated and simplified, these issues boil down to the question of whether or not respondent Judge acted with grave abuse of discretion in appointing the DILG as interim caretaker to administer and manage the affairs of the National Liga Board, per its order dated 04 August 1997. 58 In turn, the resolution of the question of grave abuse of discretion entails a couple of definitive issues, namely: (1) whether the Liga ng mga Barangay is a government organization that is subject to the DILG Secretarys power of supervision over local governments as the alter ego of the President, and (2) whether the respondent Judges designation of the DILG as interim caretaker of the Liga has invested the DILG with control over the Liga and whether DILG Memorandum Circular No. 97176, issued before it was designated as such interim caretaker, and DILG Memorandum Circular No. 97-193 and other acts which the DILG made in its capacity as interim caretaker of the Liga, involve supervision or control of the Liga. However, the Court should first address the question of mootness which intervenor Lim raised because, according to him, during the pendency of the present petition a general election was held; the new set of officers and directors had assumed their positions; and that supervening events the DILG had turned-over the management and administration of the Liga to new Liga officers and directors.59 Respondent Rayos has joined him in this regard. 60 Forthwith, the Court declares that these supervening events have not rendered the instant petition moot, nor removed it from the jurisdiction of this Court. This case transcends the elections ordered and conducted by the DILG as interim caretaker of the Liga and the Liga officers and directors who were elected to replace petitioner David and the former officers. At the core of the petition is the validity of the DILGs "caretakership" of the Liga and the official acts of the DILG as such caretaker which exceeded the bounds of supervision and were exercise of control. At stake in this case is the realization of the constitutionally ensconced principle of local government autonomy;61 the statutory objective to enhance the capabilities of barangays and municipalities "by providing them opportunities to participate actively in the implementation of national programs and projects;" 62 and the promotion of the avowed aim to ensure the independence and nonpartisanship of the Liga ng mga Barangay. The mantle of local autonomy would be eviscerated and remain an empty buzzword if unconstitutional, illegal and unwarranted intrusions in the affairs of the local governments are tolerated and left unchecked. Indeed, it is the declared policy of the State that its territorial and political subdivisions should enjoy genuine meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals.63 In the case of De Leon v. Esguerra,64 the Court ruled that even barangays are meant to possess genuine and meaningful local autonomy so that they may develop fully as selfreliant communities.65 Furthermore, well-entrenched is the rule that courts will decide a question otherwise moot and academic if it is "capable of repetition, yet evading review."66 For the question of whether the DILG may validly be appointed as interim caretaker, or assume a similar position and perform acts pursuant thereto, is likely to resurrect again, and yet the question may not be decided before the actual assumption, or the termination of said assumption even. So too, dismissing the petition on the ground of mootness could lead to the wrong impression that the challenged order and issuances are valid. Verily, that does not appear to be the correct conclusion to make since by applying opposite precedents to the issues the outcome points to invalidating the assailed order and memorandum circulars. The resolution of the issues of whether the Liga ng mga Barangay is subject to DILG supervision, and whether the questioned "caretakership" order of the respondent judge and the challenged issuances and acts of the DILG constitute control in derogation of the Constitution, necessitates a brief overview of the barangay, as the lowest LGU, and the Liga, as a vehicle of governance and coordination. As the basic political unit, the barangay serves as the primary planning

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and implementing unit of government policies, plans, programs, projects and activities in the community, and as a forum wherein the collective views of the people may be expressed, crystallized and considered, and where disputes may be amicably settled.67 On the other hand, the Liga ng mga Barangay68 is the organization of all barangays, the primary purpose of which is the determination of the representation of the Liga in the sanggunians, and the ventilation, articulation, and crystallization of issues affecting barangay government administration and securing solutions thereto, through proper and legal means.69 The Liga ng mga Barangay shall have chapters at the municipal, city and provincial and metropolitan political subdivision levels.70 The municipal and city chapters of the Liga are composed of the barangay representatives from the municipality or city concerned. The presidents of the municipal and city chapters of the Liga form the provincial or metropolitan political subdivision chapters of the Liga. The presidents of the chapters of the Liga in highly urbanized cities, provinces and the Metro Manila area and other metropolitan political subdivisions constitute the National Liga ng mga Barangay.71 As conceptualized in the Local Government Code, the barangay is positioned to influence and direct the development of the entire country. This was heralded by the adoption of the bottom-to-top approach process of development which requires the development plans of the barangay to be considered in the development plans of the municipality, city or province,72 whose plans in turn are to be taken into account by the central government73 in its plans for the development of the entire country.74 The Liga is the vehicle assigned to make this new development approach materialize and produce results. The presidents of the Liga at the municipal, city and provincial levels, automatically become ex-officio members of the Sangguniang Bayan, Sangguniang Panlungsod and Sangguniang Panlalawigan, respectively. They shall serve as such only during their term of office as presidents of the Liga chapters, which in no case shall be beyond the term of office of the sanggunian concerned.75 The Liga ng mga Barangay has one principal aim, namely: to promote the development of barangays and secure the general welfare of their inhabitants.76 In line with this, the Liga is granted the following functions and duties: a) Give priority to programs designed for the total development of the barangays and in consonance with the policies, programs and projects of the national government; b) Assist in the education of barangay residents for peoples participation in local government administration in order to promote untied and concerted action to achieve country-wide development goals; c) Supplement the efforts of government in creating gainful employment within the barangay; d) Adopt measures to promote the welfare of barangay officials; e) Serve as forum of the barangays in order to forge linkages with government and non-governmental organizations and thereby promote the social, economic and political well-being of the barangays; and f) Exercise such other powers and perform such other duties and functions which will bring about stronger ties between barangays and promote the welfare of the barangay inhabitants.77 The Ligas are primarily governed by the provisions of the Local Government Code. However, they are empowered to make their own constitution and by-laws to govern their operations. Sec. 507 of the Code provides: Sec. 507. Constitution and By-Laws of the Liga and the Leagues . - All other matters not herein otherwise provided for affecting the internal organization of the leagues of local government units shall be governed by their respective constitution and by-laws which are hereby made suppletory to the provision of this Chapter: Provided, That said Constitution and By-laws shall always conform to the provision of the Constitution and existing laws. Pursuant to the Local Government Code, the Liga ng mga Barangay adopted its own Constitution and By-Laws. It provides that the corporate powers of the Liga, expressed or implied, shall be vested in the board of directors of each level of the Liga which shall:

a) Have jurisdiction over all officers, directors and committees of the said Liga; including the power of appointment, assignment and delegation; b) Have general management of the business, property, and funds of said Liga; c) Prepare and approve a budget showing anticipated receipts and expenditures for the year, including the plans or schemes for funding purposes; and d) Have the power to suspend or remove from office any officer or member of the said board on grounds cited and in the manner provided in hereinunder provisions.78 The National Liga Board of Directors promulgated the rules for the conduct of its Ligas general elections.79 And, as early as 28 April 1997, the Liga National Chapter had already scheduled its general elections on 14 June 1997.80 The controlling provision on the issues at hand is Section 4, Article X of the Constitution, which reads in part: Sec. The President of the Philippines shall exercise general supervision over local governments. The 1935, 1973 and 1987 Constitutions uniformly differentiate the Presidents power of supervision over local governments and his power of control of the executive departments bureaus and offices. 81 Similar to the counterpart provisions in the earlier Constitutions, the provision in the 1987 Constitution provision has been interpreted to exclude the power of control.82 In the early case of Mondano v. Silvosa, et al.,83 this Court defined supervision as "overseeing, or the power or authority of an officer to see that subordinate officers perform their duties, and to take such action as prescribed by law to compel his subordinates to 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. 84 In Taule v. Santos,85 the Court held that the Constitution permits the President to wield no more authority than that of checking whether a local government or its officers perform their duties as provided by statutory enactments.86 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.87 The case of Drilon v. Lim88 clearly defined the extent of supervisory power, thus: The supervisor or superintendent merely sees to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the work done or re-done but only to conform to the prescribed rules. He may not prescribe his own manner for the doing of the act. He has no judgment on this matter except to see that the rules are followed89 In Section 4, Article X of the Constitution applicable to the Liga ng mga Barangay? Otherwise put, is the Liga legally susceptible to DILG suspension? This question was resolved in Bito-Onon v. Fernandez, 90 where the Court ruled that the Presidents power of the general supervision, as exercised therein by the DILG Secretary as his alter ego, extends to the Liga ng mga Barangay. Does the Presidents power of general supervision extend to the liga ng mga barangay, which is not a local government unit? We rule in the affirmative. In Opinion No. 41, Series of 1995, the Department of Justice ruled that the liga ng mga barangay is a government organization, being an association, federation, league or union created by law or by authority of law, whose members are either appointed or elected government officials. The Local Government Code defines the liga ng mga barangay as an organization of all barangays for the primary purpose of determining the representation of the liga in the sanggunians, and for ventilating, articulating and crystallizing issues affecting barangay government administration and securing, through proper and legal means, solutions thereto.91

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The rationale for making the Liga subject to DILG supervision is quite evident, whether from the perspectives of logic or of practicality. The Liga is an aggroupment of barangays which are in turn represented therein by their respective punong barangays. The representatives of the Liga sit in an ex officio capacity at the municipal, city and provincial sanggunians. As such, they enjoy all the powers and discharge all the functions of regular municipal councilors, city councilors or provincial board members, as the case may be. Thus, the Liga is the vehicle through which the barangay participates in the enactment of ordinances and formulation of policies at all the legislative local levels higher than the sangguniang barangay, at the same time serving as the mechanism for the bottom-to-top approach of development. In the case at bar, even before the respondent Judge designated the DILG as interim caretaker of the Liga, on 28 July 1997, it issued Memorandum Circular No. 97-176, directing local government officials not to recognize David as the National Liga President and his pronouncements relating to the affairs of the Liga. Not only was the action premature, it even smacked of superciliousness and injudiciousness. The DILG is the topmost government agency which maintains coordination with, and exercises supervision over local government units and its multi-level leagues. As such, it should be forthright, circumspect and supportive in its dealings with the Ligas especially the Liga ng mga Barangay. The indispensable role played by the latter in the development of the barangays and the promotion of the welfare of the inhabitants thereof deserve no less than the full support and respect of the other agencies of government. As the Court held in the case of San Juan v. Civil Service Commission, 92 our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based.93 When the respondent judge eventually appointed the DILG as interim caretaker to manage and administer the affairs of the Liga, she effectively removed the management from the National Liga Board and vested control of the Liga on the DILG. Even a cursory glance at the DILGs prayer for appointment as interim caretaker of the Liga "to manage and administer the affairs of the Liga, until such time that the new set of National Liga officers shall have been duly elected and assumed office" reveals that what the DILG wanted was to take control over the Liga. Even if said "caretakership" was contemplated to last for a limited time, or only until a new set of officers assume office, the fact remains that it was a conferment of control in derogation of the Constitution. With his Department already appointed as interim caretaker of the Liga, Secretary Barbers nullified the results of the Liga elections and promulgated DILG Memorandum Circular No. 97-193 dated 11 August 1997, where he laid down the supplemental guidelines for the 1997 synchronized elections of the provincial and metropolitan chapters and for the election of the national chapter of the Liga ng mga Barangay; scheduled dates for the new provincial, metropolitan and national chapter elections; and appointed respondent Rayos as president of Liga-Caloocan Chapter. These acts of the DILG went beyond the sphere of general supervision and constituted direct interference with the political affairs, not only of the Liga, but more importantly, of the barangay as an institution. The election of Liga officers is part of the Ligas internal organization, for which the latter has already provided guidelines. In succession, the DILG assumed stewardship and jurisdiction over the Liga affairs, issued supplemental guidelines for the election, and nullified the effects of the Liga-conducted elections. Clearly, what the DILG wielded was the power of control which even the President does not have. Furthermore, the DILG assumed control when it appointed respondent Rayos as president of the Liga-Caloocan Chapter prior to the newly scheduled general Liga elections, although petitioner Davids term had not yet expired. The DILG substituted its choice, who was Rayos, over the choice of majority of the punong barangay of Caloocan, who was the incumbent President, petitioner David. The latter was elected and had in fact been sitting as an ex-officio member of the sangguniang panlungsod in accordance with the Liga Constitution and By-Laws. Yet, the DILG extended the appointment to respondent Rayos although it was aware that the position was the subject of a quo warranto proceeding instituted by Rayos himself, thereby preempting the outcome of that case. It was bad enough that the DILG assumed the power of control, it was worse when it made use of the power with

evident bias and partiality. As the entity exercising supervision over the Liga ng mga Barangay, the DILGs authority over the Liga is limited to seeing to it that the rules are followed, but it cannot lay down such rules itself, nor does it have the discretion to modify or replace them. In this particular case, the most that the DILG could do was review the acts of the incumbent officers of the Liga in the conduct of the elections to determine if they committed any violation of the Ligas Constitution and By-laws and its implementing rules. If the National Liga Board and its officers had violated Liga rules, the DILG should have ordered the Liga to conduct another election in accordance with the Ligas own rules, but not in obeisance to DILG-dictated guidelines. Neither had the DILG the authority to remove the incumbent officers of the Liga and replace them, even temporarily, with unelected Liga officers. Like the local government units, the Liga ng mga Barangay is not subject to control by the Chief Executive or his alter ego. In the Bito-Onon94 case, this Court held that DILG Memorandum Circular No. 97-193, insofar as it authorized the filing of a petition for review of the decision of the Board of Election Supervisors (BES) with the regular courts in a post-proclamation electoral protest, involved the exercise of control as it in effect amended the guidelines already promulgated by the Liga. The decision reads in part: xxx. Officers in control, lay down the rules in the doing of an act. If they are not followed, it is discretionary on his part to order the act undone or redone by his subordinate or he may even decide to do it himself. Supervision does not cover such authority. Supervising officers merely see to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the work done or re-done to conform for to the prescribed rules. He cannot prescribe his own manner the doing of the act. x x x xxx. The amendment of the GUIDELINES is more than an exercise of the power of supervision but is an exercise of the power of control, which the President does not have over the LIGA. Although the DILG is given the power to prescribe rules, regulations and other issuances, the Administrative Code limits its authority to merely "monitoring compliance by local government units of such issuances. To monitor means to "watch, observe or check" and is compatible with the power of supervision of the DILG Secretary over local governments, which is limited to checking whether the local government unit concerned or the officers thereof perform their duties as per statutory enactments. Besides, any doubt as to the power of the DILG Secretary to interfere with local affairs should be resolved in favor of the greater autonomy of the local government.95 In Taule,96 the Court ruled that the Secretary of Local Government had no authority to pass upon the validity or regularity of the election of officers of katipunan ng mga barangay or barangay councils. In that case, a protest was lodged before the Secretary of Local Government regarding several irregularities in, and seeking the nullification of, the election of officers of the Federation of Associations of Barangay Councils (FABC) of Catanduanes. Then Local Government Secretary Luis Santos issued a resolution nullifying the election of officers and ordered a new one to be conducted. The Court ruled: 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 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.97 All given, the Court is convinced that the assailed order was issued with grave abuse of discretion while the acts of the respondent

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Secretary, including DILG Memorandum Circulars No. 97-176 and No. 97-193, are unconstitutional and ultra vires, as they all entailed the conferment or exercise of control a power which is denied by the Constitution even to the President. WHEREFORE, the Petition is GRANTED. The Order of the Regional Trial Court dated 04 August 1997 is SET ASIDE for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. DILG Memorandum Circulars No. 97-176 and No. 97-193, are declared VOID for being unconstitutional and ultra vires. No pronouncements as to costs. SO ORDERED.

resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority-which is of course, the better procedure however, it cannot be stigmatized later if it failed to conduct one. (pp. 129-130, Rollo) (Emphasis supplied) In the same order of September 21, 1990, authorizing provisional increase, the ERB set the applications for hearing with due notice to all interested parties on October 16, 1990. Petitioner Maceda failed to appear at said hearing as well as on the second hearing on October 17, 1990. To afford registered oppositors the opportunity to cross-examine the witnesses, the ERB set the continuation of the hearing to October 24, 1990. This was postponed to November 5, 1990, on written notice of petitioner Maceda. On November 5, 1990, the three oil companies filed their respective motions for leave to file or admit amended/supplemental applications to further increase the prices of petroleum products. The ERB admitted the respective supplemental/amended petitions on November 6, 1990 at the same time requiring applicants to publish the corresponding Notices of Public Hearing in two newspapers of general circulation (p. 4, Rollo and Annexes "F" and "G," pp. 60 and 62, Rollo). Hearing for the presentation of the evidence-in-chief commenced on November 21, 1990 with ERB ruling that testimonies of witnesses were to be in the form of Affidavits (p. 6, Rollo). ERB subsequently outlined the procedure to be observed in the reception of evidence, as follows: CHAIRMAN FERNANDO: Well, at the last hearing, applicant Caltex presented its evidence-inchief and there is an understanding or it is the Board's wish that for purposes of good order in the presentation of the evidence considering that these are being heard together, we will defer the crossexamination of applicant Caltex's witness and ask the other applicants to present their evidence-in-chief so that the oppositors win have a better Idea of what an of these will lead to because as I mentioned earlier, it has been traditional and it is the intention of the Board to act on these applications on an industry-wide basis, whether to accept, reject, modify or whatever, the Board win do it on an industry wide basis, so, the best way to have ( sic) the oppositors and the Board a clear picture of what the applicants are asking for is to have all the evidence-in-chief to be placed on record first and then the examination will come later, the cross-examination will come later. . . . (pp. 5-6, tsn., November 23, 1990, ERB Cases Nos. 90-106, 90382 and 90-384). (p. 162, Rollo) Petitioner Maceda maintains that this order of proof deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to cross-examine each of the witnesses of Caltex and Shell. He points out that this relaxed procedure resulted in the denial of due process. We disagree. The Solicitor General has pointed out: . . . The order of testimony both with respect to the examination of the particular witness and to the general course of the trial is within the discretion of the court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the rules is not improper (88 C.J.S. 206-207). Such a relaxed procedure is especially true in administrative bodies, such as the ERB which in matters of rate or price fixing is considered as exercising a quasi-legislative , not quasi-judicial, function As such administrative agency, it is not bound by the strict or technical rules of evidence governing court proceedings (Sec. 29, Public Service Act; Dickenson v. United States, 346, U.S. 389, 98 L. ed. 132, 74 S. St. 152). (Emphasis supplied) In fact, Section 2, Rule I of the Rules of Practice and Procedure Governing Hearings Before the ERB provides that These Rules shall govern pleadings, practice and procedure before the

G.R. No. 96266 July 18, 1991 ERNESTO M. MACEDA, petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents. G.R. No. 96349 July 18, 1991 EUGENIO O. ORIGINAL, IRENEO N. AARON, JR., RENE LEDESMA, ROLANDO VALLE, ORLANDO MONTANO, STEVE ABITANG, NERI JINON, WILFREDO DELEONIO, RENATO BORRO, RODRIGO DE VERA, ALVIN BAYUANG, JESUS MELENDEZ, NUMERIANO CAJILIG JR., RUFINO DE LA CRUZ AND JOVELINO G. TIPON, petitioners, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents. G.R. No. 96284 July 18,1991 CEFERINO S. PAREDES, JR., petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL, INC. AND PETROPHIL CORPORATION, respondents. R E S O L U T I O N MEDIALDEA, J.:p In G.R. No. 96266, petitioner Maceda seeks nullification of the Energy Regulatory Board (ERB) Orders dated December 5 and 6, 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow him substantial cross-examination, in effect, allegedly, a denial of due process. The facts of the case are as follows: Upon the outbreak of the Persian Gulf conflict on August 2, 1990, private respondents oil companies filed with the ERB their respective applications on oil price increases (docketed as ERB Case Nos. 90106, 90-382 and 90-384, respectively). On September 21, 1990, the ERB issued an order granting a provisional increase of P1.42 per liter. Petitioner Maceda filed a petition for Prohibition on September 26, 1990 (E. Maceda v. ERB, et al., G.R. No. 95203), seeking to nullify the provisional increase. We dismissed the petition on December 18, 1990, reaffirming ERB's authority to grant provisional increase even without prior hearing, pursuant to Sec. 8 of E.O. No. 172, clarifying as follows: What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex-parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 3, paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex-parte and which are subject to the resolution of the main case. Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may

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Energy Regulatory Board in all matters of inquiry, study, hearing, investigation and/or any other proceedings within the jurisdiction of the Board. However, in the broader interest of justice, the Board may, in any particular matter, except itself from these rules and apply such suitable procedure as shall promote the objectives of the Order. (pp. 163-164, Rollo) Petitioner Maceda also claims that there is no substantial evidence on record to support the provisional relief. We have, in G.R. Nos. 95203-05, previously taken judicial notice of matters and events related to the oil industry, as follows: . . . (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4) our trade deficit is at P2.855 Billion as of the first nine months of the year. . . . (p. 150, Rollo) The Solicitor General likewise commented: Among the pieces of evidence considered by ERB in the grant of the contested provisional relief were: (1) certified copies of bins of lading issued by crude oil suppliers to the private respondents; (2) reports of the Bankers Association of the Philippines on the peso-dollar exchange rate at the BAP oil pit; and (3) OPSF status reports of the Office of Energy Affairs. The ERB was likewise guided in the determination of international crude oil prices by traditional authoritative sources of information on crude oil and petroleum products, such as Platt's Oilgram and Petroleum Intelligence Weekly. (p. 158, Rollo) Thus, We concede ERB's authority to grant the provisional increase in oil price, as We note that the Order of December 5, 1990 explicitly stated: in the light, therefore, of the rise in crude oil importation costs, which as earlier mentioned, reached an average of $30.3318 per barrel at $25.551/US $ in September-October 1990; the huge OPSF deficit which, as reported by the Office of Energy Affairs, has amounted to P5.7 Billion (based on filed claims only and net of the P5 Billion OPSF) as of September 30, 1990, and is estimated to further increase to over P10 Billion by end December 1990; the decision of the government to discontinue subsidizing oil prices in view of inflationary pressures; the apparent inadequacy of the proposed additional P5.1 Billion government appropriation for the OPSF and the sharp drop in the value of the peso in relation to the US dollar to P28/US $, this Board is left with no other recourse but to grant applicants oil companies further relief by increasing the prices of petroleum products sold by them. (p. 161, Rollo) Petitioner Maceda together with petitioner Original (G.R. No. 96349) also claim that the provisional increase involved amounts over and above that sought by the petitioning oil companies. The Solicitor General has pointed out that aside from the increase in crude oil prices, all the applications of the respondent oil companies filed with the ERB covered claims from the OPSF. We shall thus respect the ERB's Order of December 5, 1990 granting a provisional price increase on petroleum products premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk for a subsidy on sale to NPC (p. 167, Rollo), since the oil companies are "entitled to as much relief as the fact alleged constituting the course of action may warrant," (Javellana v. D.O. Plaza Enterprises, Inc., G.R. No. L-28297, March 30, 1970, 32 SCRA 261 citing Rosales v. Reyes, 25 Phil. 495; Aguilar v. Rubiato, 40 Phil. 470) as follows: Per Liter Weighted Petron Shell Caltex Average Crude Cost P3.11 P3.6047 P2.9248 P3.1523 Peso Cost Diffn'l 2.1747 1.5203 1.5669 1.8123 Forex Risk

Fee -0.1089 -0,0719 -0.0790 -0.0896 Subsidy on Sales to NPC 0.1955 0.0685 0.0590 0.1203 Total Price Increase Applied for P59.3713 P5.1216 P4.4717 P4.9954 Less: September 21 Price Relief Actual Price Increase P1.42 Actual Tax Reduction: Ad Valorem Tax (per Sept. 1, 1990 price build-up) P1.3333 Specific Tax (per Oct. 5, 1990 price build-up) .6264 .7069 2.1269 Net Price Increase Applied for 2.8685 Nonetheless, it is relevant to point out that on December 10, 1990, the ERB, in response to the President's appeal, brought back the increases in Premium and Regular gasoline to the levels mandated by the December 5, 1990 Order (P6.9600 and P6.3900, respectively), as follows: Product In Pesos Per Liter OPSF Premium Gasoline 6.9600 Regular Gasoline 6.3900 Avturbo 4.9950 Kerosene 1.4100 Diesel Oil 1.4100 Fuel Oil/Feedstock 0.2405 LPG 1.2200 Asphalt 2.5000 Thinner 2.5000 In G.R. No. 96349, petitioner Original additionally claims that if the price increase will be used to augment the OPSF this will constitute illegal taxation. In the Maceda case, (G.R. Nos. 95203-05, supra) this Court has already ruled that "the Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation but is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137. The petitions of E.O. Original et al. (G.R. No. 96349) and C.S. Povedas, Jr. (G.R. No. 96284), insofar as they question the ERB's authority under Sec. 8 of E.O. 172, have become moot and academic. We lament Our helplessness over this second provisional increase in oil price. We have stated that this "is a question best judged by the political leadership" (G.R. Nos. 95203-05, G.R. Nos. 95119-21, supra). We wish to reiterate Our previous pronouncements therein that while the government is able to justify a provisional increase, these findings "are not final, and it is up to petitioners to demonstrate that the present economic picture does not warrant a permanent increase." In this regard, We also note the Solicitor General's comments that "the ERB is not averse to the idea of a presidential review of its decision," except that there is no law at present authorizing the same. Perhaps, as pointed out by Justice Padilla, our lawmakers may see the wisdom

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of allowing presidential review of the decisions of the ERB since, despite its being a quasi-judicial body, it is still "an administrative body under the Office of the President whose decisions should be appealed to the President under the established principle of exhaustion of administrative remedies," especially on a matter as transcendental as oil price increases which affect the lives of almost an Filipinos. ACCORDINGLY, the petitions are hereby DISMISSED. SO ORDERED.

increase school fees. 5 Regarding the second argument, the petitioner maintains that students and parents are interested parties that should be afforded an opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that the questioned Order constitutes a denial of substantive and procedural due process of law. Complying with the instructions of this Court, 6 the respondent Secretary submitted a Comment on the Petition. 7 The respondent Secretary maintains, inter alia, that the increase in tuition and other school fees is urgent and necessary, and that the assailed Department Order is not arbitrary in character. In due time, the petitioner submitted a Reply to the Comment. 8 Thereafter, We considered the case submitted for resolution. After a careful examination of the entire record of the case, We find the instant Petition devoid of merit. We are not convinced by the argument that the power to regulate school fees "does not always include the power to increase" such fees. Section 57 (3) of Batas Pambansa Blg. 232, otherwise known as The Education Act of 1982, vests the DECS with the power to regulate the educational system in the country, to wit: SEC. 57. Educations and powers of the Ministry. The Ministry shall: xxx xxx xxx (3) Promulgate rules and regulations necessary for the administration, supervision and regulation of the educational system in accordance with declared policy. xxx xxx xxx 9 Section 70 of the same Act grants the DECS the power to issue rules which are likewise necessary to discharge its functions and duties under the law, to wit: SEC. 70. Rule-making Authority. The Minister of Education and Culture, charged with the administration and enforcement of this Act, shall promulgate the necessary implementing rules and regulations. In the absence of a statute stating otherwise, this power includes the power to prescribe school fees. No other government agency has been vested with the authority to fix school fees and as such, the power should be considered lodged with the DECS if it is to properly and effectively discharge its functions and duties under the law. We find the remaining argument of the petitioner untenable. The petitioner invokes the due process clause of the Constitution against the alleged arbitrariness of the assailed Department Order. The petitioner maintains that the due process clause requires that prior notice and hearing are indispensable for the Department Order to be validly issued. We disagree. The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. As regards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such rates. When the rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial in character. 9a Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? We believe so. The assailed Department Order prescribes the maximum school fees that may be charged by all private schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to the validity of its issuance. This observation notwithstanding, there is a failure on the part of the petitioner to show clear and convincing evidence of such arbitrariness. As the record of the case discloses, the DECS is not without any justification for the issuance of the questioned Department Order. It would be reasonable to assume that the report of the Task Force

G.R. No. 78385 August 31, 1987 PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner, vs.THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent. GANCAYCO, J.: This is an original Petition for prohibition with a prayer for the issuance of a writ of preliminary injunction. The record of the case discloses that the herein petitioner Philippine Consumers Foundation, Inc. is a non-stock, non-profit corporate entity duly organized and existing under the laws of the Philippines. The herein respondent Secretary of Education, Culture and Sports is a ranking cabinet member who heads the Department of Education, Culture and Sports of the Office of the President of the Philippines. On February 21, 1987, the Task Force on Private Higher Education created by the Department of Education, Culture and Sports (hereinafter referred to as the DECS) submitted a report entitled "Report and Recommendations on a Policy for Tuition and Other School Fees." The report favorably recommended to the DECS the following courses of action with respect to the Government's policy on increases in school fees for the schoolyear 1987 to 1988 (1) Private schools may be allowed to increase its total school fees by not more than 15 per cent to 20 per cent without the need for the prior approval of the DECS. Schools that wish to increase school fees beyond the ceiling would be subject to the discretion of the DECS; (2) Any private school may increase its total school fees in excess of the ceiling, provided that the total schools fees will not exceed P1,000.00 for the schoolyear in the elementary and secondary levels, and P50.00 per academic unit on a semestral basis for the collegiate level. 1 The DECS took note of the report of the Task Force and on the basis of the same, the DECS, through the respondent Secretary of Education, Culture and Sports (hereinafter referred to as the respondent Secretary), issued an Order authorizing, inter alia, the 15% to 20% increase in school fees as recommended by the Task Force. The petitioner sought a reconsideration of the said Order, apparently on the ground that the increases were too high. 2 Thereafter, the DECS issued Department Order No. 37 dated April 10, 1987 modifying its previous Order and reducing the increases to a lower ceiling of 10% to 15%, accordingly. 3 Despite this reduction, the petitioner still opposed the increases. On April 23, 1987, the petitioner, through counsel, sent a telegram to the President of the Philippines urging the suspension of the implementation of Department Order No. 37. 4 No response appears to have been obtained from the Office of the President. Thus, on May 20, 1987, the petitioner, allegedly on the basis of the public interest, went to this Court and filed the instant Petition for prohibition, seeking that judgment be rendered declaring the questioned Department Order unconstitutional. The thrust of the Petition is that the said Department Order was issued without any legal basis. The petitioner also maintains that the questioned Department Order was issued in violation of the due process clause of the Constitution in asmuch as the petitioner was not given due notice and hearing before the said Department Order was issued. In support of the first argument, the petitioner argues that while the DECS is authorized by law to regulate school fees in educational institutions, the power to regulate does not always include the power to

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created by the DECS, on which it based its decision to allow an increase in school fees, was made judiciously. Moreover, upon the instance of the petitioner, as it so admits in its Petition, the DECS had actually reduced the original rates of 15% to 20% down to 10% to 15%, accordingly. Under the circumstances peculiar to this case, We cannot consider the assailed Department Order arbitrary. Under the Rules of Court, it is presumed that official duty has been regularly performed. 10 In the absence of proof to the contrary, that presumption prevails. This being so, the burden of proof is on the party assailing the regularity of official proceedings. In the case at bar, the petitioner has not successfully disputed the presumption. We commend the petitioner for taking the cudgels for the public, especially the parents and the students of the country. Its zeal in advocating the protection of the consumers in its activities should be lauded rather than discouraged. But a more convincing case should be made out by it if it is to seek relief from the courts some time in the future. Petitioner must establish that respondent acted without or in excess of her jurisdiction; or with grave abuse of discretion, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law before the extraordinary writ of prohibition may issue. 11 This Court, however, does not go to the extent of saying that it gives its judicial imprimatur to future increases in school fees. The increases must not be unreasonable and arbitrary so as to amount to an outrageous exercise of government authority and power. In such an eventuality, this Court will not hesitate to exercise the power of judicial review in its capacity as the ultimate guardian of the Constitution. WHEREFORE, in view of the foregoing, the instant Petition for prohibition is hereby DISMISSED for lack of merit. We make no pronouncement as to costs. SO ORDERED.

THE IMPOSITION AND COLLECTION THEREOF, LIKE DECS ORDER NO. 30; REASONS. a. THE COURT DID NOT RULE IN THE CEBU INSTITUTE CASE THAT THE POWER GRANTED TO THE DECS SECRETARY TO FIX MAXIMUM PERMISSIBLE TUITION AND OTHER SCHOOL FEES BY SECTION 1 OF P.D. NO. 451 HAD BEEN ELIMINATED BY SECTION 42 OF B.P. BLG. 232. We are unable to agree with intervenor CEAP that Cebu Institute had the effect of withdrawing from respondent DECS Secretary the power to regulate, and to promulgate rules and regulations relating to, the imposition and collection of tuition and other school fees. A close reading of the opinion of this Court in the Cebu Institute case shows that the Court did not rule that the power granted to the DECS Secretary to fix maximum permissible tuition and other school fees by Section 1 of P.D. No. 451 had been eliminated by Section 42 of B.P. Blg. 232. What the Court dealt with in the Cebu Institute case was the matter of the detailed allocation of the proceeds of increases in tuition and other school fees. In respect of this specific question, there is no dispute that Section 42 of B.P. Blg. 232 did modify P.D. No. 451 by authorizing the DECS Secretary to issue rules and regulations relating to the detailed allocation of funds raised by tuition and other fee increases to various categories of uses and expenditures. b. THERE IS NOTHING IN SECTION 42 OF B.P. BLG. 232 WHICH ELIMINATES THE POWER OF THE DECS SECRETARY IN RESPECT OF THE FIXING OF MAXIMUM TUITION AND OTHER SCHOOL FEES VESTED IN HIM BY P.D. NO. 451; UNDER SAID SECTION 42, THE RATE OF TUITION AND OTHER SCHOOL FEES OR CHARGES DETERMINED BY THE PRIVATE SCHOOL ITSELF IS SUBJECT TO RULES AND REGULATIONS PROMULGATED BY THE DECS. An examination of the precise language of Section 42 of B.P. Blg. 232 shows that there is really nothing in Section 42 which must be read as eliminating the power of the DECS Secretary in respect of the fixing of maximum tuition and other school fees vested in him by P.D. No. 451. Under Section 42, a private school may determine for itself in the first instance the rate of tuition and other school fees or charges that it deems appropriate. Such determination by the private school is not, however, binding and conclusive as against the Secretary of Education, Culture and Sports. The rates and charges adopted by such private school "shall be collectible, and their application or use authorized" provided that such rates and charges are in accord with rules and regulations promulgated by the DECS . . . We do not read the first sentence of Section 42 as granting an unlimited power to private schools to establish any rate of tuition and other school fees and charges that it may desire and to enforce collection of such fees or charges from students. We think it entirely clear that the second sentence of Section 42 is a limiting provision, that is, a provision which, far from authorizing a private school to adopt any level of tuition and other school fees or charges no matter how exorbitant, subjects the schedule of rates and charges adopted by a particular school to the rules and regulations promulgated by the DECS. Thus, the rates and charges adopted by any given private school shall be "collectible," i.e., enforceable against the students and their parents, to the extent that they are consistent with DECS rules and regulations. Put a little differently, the second sentence of Section 42 deals with two (2) distinguishable subjects: (a) the enforceability of rates of fees and charges adopted by private schools; and (b) the enforceability of proposed applications or uses of the proceeds of such school fees or charges and both are declared subject to rules and regulations promulgated by the DECS. c. R.A NO. 6728 DEALS WITH GOVERNMENT ASSISTANCE TO STUDENTS AND TEACHERS IN PRIVATE SCHOOLS; IT DOES NOT DEAL WITH THE QUESTION OF, NEITHER DOES IT VEST UPON THE SAC, AUTHORITY TO FIX MAXIMUM COLLECTIBLE TUITION AND OTHER SCHOOL FEES. We turn to the argument of petitioner Lina that the DECS Secretary was divested of his authority to promulgate rules and regulations relating to the fixing of tuition and other school fees, by R.A. No., 6728, and that such authority has been transferred instead to the SAC. The Court is unable to agree with this contention. We do not see how R.A. No. 6728 could be regarded as vesting upon the SAC the legal authority to establish maximum permissible tuition and other school fees for private schools. As earlier noted, R.A. No. 6728 deals with government assistance to students and teachers in private schools; it does not, in other words, purport to deal at all with the question of authority to fix maximum collectible

G.R. No. 100127. April 23, 1993. JOSE D. LINA, JR., petitioner, vs.ISIDRO D. CARINO, in his capacity as Secretary of Education, Culture and Sports, respondents. Roberto N. Dio of Castillo, Laman, Tan and Pantaleon for petitioner. The Solicitor General for public respondent. Ulpiano P. Sarmiento III for intervenor Catholic Educational Association of Colleges and Universities (CEAP). Antonio Abad of Abad, Leano and Associates for intervenor Philippine Association of Colleges and Universities (PACU). SYLLABUS 1. ADMINISTRATIVE LAW; BRIEF HISTORICAL NOTE ON THE POWER OF THE DECS SECRETARY TO REGULATE TUITION AND OTHER FEES CHARGED BY PRIVATE SCHOOLS. It may be instructive to recall the following brief historical note set out in the Court's Decision on the Cebu Institute case: ". . . As early as March 10, 1917, the power to inspect private schools, to regulate their activities, to give them official permits to operate under certain conditions and to revoke such permits for cause was granted to the then Secretary of Public Instruction by Act No. 2706 as amended by Act No. 3075 and Commonwealth Act No. 180. Republic Act No. 6139, enacted on August 31, 1970, provided for the regulation of tuition and other fees charged by private schools in order to discourage the collection of exorbitant and unreasonable fees. In an effort to simplify the 'cumbersome and time consuming' procedure prescribed under Rep. Act No. 6139 and `to alleviate the sad plight of private schools,' Pres. Dec. No. 451 was enacted on May 11, 1974. While this later statute was being implemented, the legislative body envisioned a comprehensive legislation which would introduce changes and chart directions in the educational system, hence, the enactment of B.P. Blg. 232 . . ." 2. ID.; THE DECS SECRETARY HAS THE LEGAL AUTHORITY TO SET MAXIMUM PERMISSIBLE RATES OR LEVELS OF TUITION AND OTHER SCHOOL FEES, AND TO ISSUE GUIDELINES FOR

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tuition and other school fees. R.A. No. 6728 did authorize the SAC to issue rules and regulations; but the rules and regulations which may be promulgated by the SAC must relate to the authority granted by R.A. No. 6728 to the SAC. It is axiomatic that a rule or regulation must bear upon, and be consistent with, the provisions of the enabling statute if such rule or regulation is to be valid. The SAC was authorized to define the classes of students who may be entitled to claim government financial assistance. Under the statute, students of schools charging tuition and other school fees in excess of certain identified rates or levels thereof shall not be entitled to claim government assistance or subsidies. The specification of such levels of tuition and other school fees for purposes of qualifying (or disqualifying) the students in such schools for government financial assistance is one thing; this is the task SAC was authorized to carry out through the promulgation of rules and regulations. The determination of the levels of tuition and other school fees which may lawfully be charged by any private school, is clearly another matter; this task is vested in respondent Secretary. 3. ID.; THE CONSULTATION REQUIREMENT IN R.A. NO. 6728 APPLIES ONLY TO INCREASES IN TUITION FEES, NOT TO INCREASES IN OTHER SCHOOL FEES. In respect of the second principal issue, petitioner Lina contends that Section 1(d) of DECS Order No. 30 is inconsistent with Section 10 of R.A. No. 6728. We have earlier pointed out that petitioner's stand is inconsistent with the very language used in Section 10 of R.A. No. 6728 which states in relevant part that: "in any proposed increase in the rate of tuition fees, there shall be appropriate consultations " Petitioner Lina's argument here is, however, essentially an invocation of "justice and equity." . . . The Court believes that petitioner's argument cogent though it may be as a social and economic comment -- is most appropriately addressed, not to a court which must take the law as it is actually written, but rather to the legislative authority which can, if it wishes, change the language and content of the law. As Section 10 of R.A. No. 6728 now stands, we have no authority to strike down paragraph 1 (d) of DECS Order No. 30 as inconsistent with the requirements of Section 10. D E C I S I O N FELICIANO, J p: This is a Petition for Prohibition and Mandamus filed by petitioner Senator Jose D. Lina, Jr., principally as taxpayer, against respondent Isidro D. Cario, in the latter's capacity as the then Secretary of the Department of Education, Culture & Sports ("DECS"). Petitioner disputes the legal authority of respondent Cario to issue DECS Order No. 30, series of 1991, dated 11 March 1991, entitled "Guidelines on Tuition and/or other School Fees in Private Schools, Colleges and Universities for School Year 1991-1992." DECS Order No. 30 allows private schools to increase tuition and other school fees, subject to the guidelines there set out. The complete text of DECS Order No. 30 is reproduced here for ready reference. "1. In response to the clamor from the regions for guidelines responsive to the needs and conditions peculiar to these areas, and in consideration of the regional wage orders, schools may increase their tuition fees as approved by the State Assistance Council (SAC) in accordance with the following guidelines: a. Entering Freshmen. The tuition fee rates for entering freshmen in all levels may be determined by the school itself, subject to consultation. However, no consultation is required when the amount of increase will raise the tuition fee level to not more than P80.00 per unit for the tertiary schools and to not more than P1,500 per year for the elementary and secondary schools. b. Upper Year Students. Schools may increase their tuition fees for the upper year students in accordance with the following prescribed rates: Religion Prescribed Tuition Fee Increase: Per Unit Per Year (Tertiary) (Elem. & Sec.) I 6.50 158.00 II 5.50 135.00 III 7.50 180.00

IV 7.00 160.00 V 7.50 181.00 VI 7.00 175.00 VII 5.00 121.00 VIII 4.00 101.00 IX 5.50 132.00 X 6.00 141.00 XI 7.00 162.00 XII 6.50 157.00 NCR 9.50 226.50 CAR 5.50 133.00 Tuition fee increases within the prescribed rates above shall not require consultation and DECS approval provided that a notice of increase is submitted to the DECS regional office not later than April 30, 1991. Schools may increase up to a maximum rate of 25% for programs below Level II accreditation and up to a maximum of 30% for programs with Level II and Level III accreditation based on approved tuition fee rates in school year 1990-1991, subject to consultation. c. Emergency Tuition Fee Assessment. To comply with the provisional emergency cost of living allowances mandated by the Regional Tripartite Wages and Productivity Boards of Regions VI, VII, VIII, IX, X, XI, XII and the NCR, schools in these regions may collect an emergency tuition fee assessment from both the entering freshmen and the upper year students in all levels in accordance with the following schedule: [Schedule of Fees follows] The above Prescribed emergency tuition fee assessments shall be collected only in school year 1991-1992 and shall not form part of the approved tuition fee rates. Consultation and DECS approval shall not be required. However, a notice of collection shall be submitted to the DECS regional office not later than April 30, 1991. (Note 1: The prescribed emergency tuition fee assessment for NCR will take effect only upon final resolution of a pending petition for exemption.) d. Other Fees. Schools in all levels may increase the rates of other fees by not more than 10%. Consultation and DECS approval shall not be required provided that a notice of increase is submitted to the DECS regional office not later than April 30, 1991. e. For schools desiring to increase their tuition and/or other fees beyond what are prescribed in sections a, b, and d but whose programs are below Level II accreditation, the following must be submitted to DECS regional offices for evaluation and approval/disapproval: (1) A certification by the school head, properly notarized, stating (a) that the 70% share of tuition fee increases collected in June 1990 was distributed to the teaching and non-teaching personnel in the form of salaries, wages, allowances, and other benefits in compliance with Section 5.2.c of R.A. 6728, and (b) that the P25.00 mandated wage order in 1989 and the applicable regional wage orders in November 1990 were implemented. (2) Schedule of tuition and other fees of the previous year. (3) Schedule of proposed increase of tuition and fees for the current school year. (4) Audited financial statements for two (2) years immediately preceding the current year. No school may collect any increase in tuition and other fees prior to DECS approval. Deadline for filing of application is May 30, 1991. (f) Consultation. As defined in this Order, consultation shall mean a conference conducted by the school administration with duly organized parents-teachers associations and faculty associations with respect to elementary and secondary and with student governments or councils,

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alumni and faculty associations with respect to tertiary schools as provided for in Section 10 of R.A. 6728. (1) The consultation process involves at least two weeks' notice to all the parties above-mentioned. A meeting of all sectors is held during which views and positions on or reactions to the proposed increase in tuition and other fees shall be discussed. Every sincere effort shall be exerted to allow all sectors concerned to express themselves freely in order to arrive at an acceptable compromise. However, consultation does not necessarily mean agreement. (2) In case of disagreement, parties involved may choose the alumni association of the school or any other impartial body of their choice as arbiter. (3) Any of the parties in disagreement with the decision of the arbiter may elevate the decision to DECS Central Office which shall make the final decision. g. Sanctions. Sanctions as stipulated under DECS Order No. 50, s. 1990 still apply. h. Government Tuition Fee Supplement. Financial assistance for tuition of students in private schools, colleges and universities shall be provided by the government as follows: (1) For students enrolled in high schools which charge less than one thousand five hundred Pesos (P1,500.00) per year in tuition and other fees during school year 1990-91, the government shall provide them with a voucher equal to two hundred ninety pesos (P290.00) provided that the student pays in school year 1991-1992 tuition and other fees equal to the tuition and other fees paid during the preceding academic year. (2) For fourth and fifth year students enrolled in priority courses, as determined by DECS, in private schools, colleges and universities that charge an effective per unit tuition rate of eighty pesos (P80.00) or less in SY 1990-91, the government shall provide each student with a voucher to cover the tuition increase, up to twelve pesos (P12.00) per unit. 2. Guidelines on tuition and/or other school fees for the pre-elementary program will be covered by a separate DECS Order. 3. This Order takes effect immediately and supersedes all other DECS issuances inconsistent herewith." I It is useful to summarize the positions taken respectively by the parties and the intervenors. 1. Petitioner Petitioner basically denies the legal authority of respondent Secretary to issue DECS Order No. 30. It is the contention of petitioner that respondent Secretary at the time of issuing DECS Order No. 30, no longer possessed legal authority to do so, considering that authority to promulgate rules and regulations relating to the imposition of school fees had been transferred to the State Assistance Council ("SAC") by Republic Act No. 67Z8. 1 Earlier, i.e. in 1987, the DECS Secretary issued an Order authorizing private schools to increase their school fees by as much as 10% to 15% of the preceding year's rates. The Philippine Consumers Foundation, Inc. initiated an action questioning the legal authority of the DECS Secretary to issue such Order on the ground that the power of the DECS Secretary to regulate school fees did not include the power to authorize an increase in school fees. In Philippine Consumers Foundation, Inc. v. Secretary of Education, Culture & Sports, 2 the Court rejected the argument of Philippine Consumers Foundation, Inc. ("Phil. Consumers") and held that since no other government agency was vested with the authority to fix maximum school fees, that power should be considered lodged with the DECS Secretary. It is claimed by petitioner, however, that the ruling in Phil. Consumers was superseded by R.A. No. 6728 which expressly conferred authority to promulgate rules and regulations upon the SAC. Petitioner here relies on Section 14 of R.A. No. 6728 to sustain his position "Sec. 14. Program Administration-Rules and Regulations. The State Assistance Council shall be responsible for policy guidance and

direction, monitoring and evaluation of new and existing programs, and the promulgation of rules and regulations, while the Department of Education, Culture & Sports shall be responsible for the day to day administration and program implementation. Likewise, it may engage the services and support of any qualified government or private entity for its implementation. xxx xxx xxx" (Emphasis supplied). Petitioner also contends that DECS Order No. 30 is inconsistent with Section 10 of R.A. No. 67Z8. In DECS Order No. 30 (Section 1 [d], supra), respondent Secretary exempted increases in school fees other than tuition fee (or "other school fees" as distinguished from "tuition fee") from application of the consultation requirement. Upon the other hand, Section 10 of R.A. No. 6728 provides: "Sec. 10. Consultation. In any proposed increase in the rate of tuition fee, there shall be appropriate consultations conducted by the school administration with the duly organized parents and teachers associations and faculty associations with respect to secondary schools, and with student governments or councils, alumni and faculty associations with respect to colleges. For this purpose, audited financial statements shall be made available to authorized representatives of these sectors. Every effort shall be exerted to reconcile possible differences. In case of disagreement, the alumni association of the school or any other impartial body of their choosing shall act as arbitrator." (Emphasis supplied). According to petitioner, Section 10 above notwithstanding its wording, covers increases in all types of school fees, which increases must first comply with the requirement of consultation before promulgation in order that prohibitive and burdensome fees (of any type) may be avoided. 3 In fine, petitioner asks us to declare DECS Order No. 30 null and void on two (2) grounds: (1) that respondent Secretary does not have the legal authority to issue that Order, and (2) that DECS Order No. 30 violates Section 10 of R.A. No. 6728 which established a comprehensive requirement of consultation. 2. Respondent Secretary The Solicitor General, representing respondent Secretary, maintains that the power to prescribe maximum tuition and other school fees granted under B.P. Blg: 232 was not withdrawn by R.A. No. 6728 and remains vested in the DECS Secretary. The Solicitor General rests his position here on the decision of this Court in the Phil. Consumers case. The Solicitor General concedes that R.A. No. 6728 granted unto the SAC the power to promulgate rules and regulations, but argues that only rules and regulations relevant to the purpose of that law, i.e. government assistance and subsidy to students and teachers in private schools, may be promulgated by the SAC. In essence, the rules which may be promulgated by the SAC are those involving a determination of the maximum rates of tuition fee in private schools payment of which would not disqualify students thereof from availing themselves of government assistance in the form of tuition fee supplements, and from access to the high school textbook assistance fund and to tuition fee waiver programs. The Solicitor General further contends that DECS Order No. 30 conforms substantially with the consultation requirement of R.A. No. 672B, except item 1 (a) of DECS Order No. 30 which unqualifiedly allows private colleges and universities to raise the tuition fee in the tertiary level to not more than P80.00 per unit without prior consultation. He therefore urges that DECS Order No. 30 be upheld, save only paragraph 1(a) thereof which he considers to be inconsistent with the consultation requirement. 4 3. Intervenor PACU Intervenor Philippine Association of Colleges and Universities (PACU) is an association of one hundred eleven (111) privately-owned educational institutions, both proprietary and non-proprietary in character. PACU filed, with leave granted by this Court on 13 August 1991, a Motion for Intervention and an accompanying Comment in Intervention, claiming that it would be affected by the outcome of the petition at bar.

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Intervenor PACU does not deny the authority of the DECS Secretary to promulgate rules and regulations with respect to the collection, application and use of tuition fee increases as provided in B.P. Blg. 232. Like respondent Secretary, intervenor PACU asks us to affirm the ruling of the Court in Phil. Consumers (supra). Intervenor PACU does not believe that R.A. No. 6728 could have repealed B.P. Blg. 232 because these two (2) statutes deal with separate and independent subjects and were enacted for different purposes. Intervenor PACU questions DECS Order No. 30 only with respect to Paragraph 1 (a) which it perceives does not conform with the consultation requirement. Upon the other hand, intervenor PACU, traversing the position of petitioner, asserts that Section 10 of R.A. No. 6728 refers only to increases in tuition fees, and that accordingly, consultation does not apply to increases in other school fees, the latter kind of fees not being mentioned in Section 10. 4. Intervenor CEAP Intervenor Catholic Educational Association of the Philippines ("CEAP") is an organization of Catholic schools and universities with a total membership of 1,191 institutions. With leave granted by this Court also on 13 August 1991, the CEAP filed a Comment in Intervention. Unlike intervenor PACU, intervenor CEAP relies on the ruling of the Court in Cebu Institute of Technology v. Ople. 5 Relying principally on the following portion of the decision in the Cebu Institute case "The Court after comparing section 42 of B.P. Blg. 232 and Pres. Dec. No. 451, particularly section 3(a) thereof, finds evident irreconcilable differences. Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or charges by private schools is lodged with the Secretary of Education and Culture (Sec. 1), whereas section 42 of B.P. Blg. 232 liberalized the procedure by empowering each private school to determine its rate of tuition and other school fees or charges." 6 intervenor CEAP maintains that neither the DECS Secretary nor the SAC may fix maximum tuition and other school fees which private schools may lawfully charge. In the view of intervenor CEAP, the fixing of such fees is the exclusive prerogative of the private schools themselves. It therefore urges the Court to strike down DECS Order No. 30 as null and void in its entirety. Intervenor CEAP, however, adheres to the view of intervenor PACU on consultation, that is, that the imposition of other school fees (nontuition fees) is not subject to a consultation requirement. II The principal issues raised by the parties may be restated in the following manner: (1) Whether DECS Order No. 30 is valid, that is, whether respondent DECS Secretary has the legal authority to issue DECS Order No. 30 prescribing guidelines concerning increases in tuition and other school fees: and (2) Whether the consultation requirement in R.A. No 6723 applies not only to increases in tuition fees but also to increases in other school fees. In respect of the first issue, it may be instructive to recall the following brief historical note set out in the Court's Decision on the Cebu Institute case: ". . . As early as March 10, 1917, the power to inspect private schools, to regulate their activities, to give them official permits to operate under certain conditions and to revoke such permits for cause was granted to the then Secretary of Public Instruction by Act No. 2706 as amended by Act No. 3075 and Commonwealth Act No. 180. Republic Act No. 6139, enacted on August 31, 1970, provided for the regulation of tuition and other fees charged by private schools in order to discourage the collection of exorbitant and unreasonable fees. In an effort to simplify the 'cumbersome and time consuming' procedure prescribed under Rep. Act No. 6139 and 'to alleviate the sad plight of private schools,' Pres. Dec. No. 451 was enacted on May 11, 1974. While this later statute was being implemented, the legislative body envisioned a comprehensive legislation which would introduce changes and chart

directions in the educational system, hence, the enactment of B.P. Blg. 232 . . ." 7 Petitioner Lina and intervenor CEAP contend that DECS Order No. 30 is null and void, upon the other hand, respondent Secretary and intervenor PACU insist that DECS Order No. 30 is valid. P.D. No. 451, entitled "Authorizing the Secretary of Education and Culture to Regulate the Imposition of Tuition and Other School Fees, Repealing R.A. No. 6139, and For Other Purposes" and promulgated on 11 May 1974, explicitly authorized the DECS Secretary not only "to regulate" but also to fix the very tuition and other school fees to be charged by any particular private school. Section 1 of this statute provides as follows: "Sec. 1. Authority of Secretary of Education and Culture. Within the limits and under the circumstances set forth in this Decree, the Secretary of Education and Culture shall have the authority to regulate the imposition of tuition and other school fees or charges by any and all private schools as defined under Act Numbered Two thousand seven hundred and six, as amended. No changes in the rates of tuition or other school fees or charges shall be effective without the prior approval of the Secretary of Education and Culture. New school fees or charges to be imposed by new or existing schools, whether for new courses or other matters, shall be at such reasonable rates as may be determined by the Secretary of Education and Culture based on the standard of such school." (Emphasis supplied). B.P. Blg. 232, known as the "Education Act of 1982," was passed by the Batasan on 11 September 1982. The Provisions of B.P. Blg. 232 pertinent for present purposes are the following: "Sec. 42. Tuition and Other School Fees. Each private school shall determine its rate of tuition and other school fees or charges. The rates and charges adopted by schools pursuant to this provision shall be collectible, and their application or use authorized, subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports. xxx xxx xxx Sec. 57. Functions and Powers of the Ministry. The Ministry shall: 1. Formulate general education objectives and policies, and adopt long-range educational plans: 2. Plan, develop and implement programs and projects in education and culture; 3. Promulgate rules and regulations necessary for the administration, supervision and regulation of the educational system in accordance with declared policy; 4. Set up general objectives for the school system; 5. Coordinate the activities and functions of the school system and various cultural agencies under it; 6. Coordinate and work with agencies concerned with the educational and cultural development of the national cultural communities; and 7. Recommend and study legislation proposed for adoption." xxx xxx xxx Sec. 70. Rule-Making Authority. The Minister of Education, Culture and Sports charged with the administration and enforcement of this Act, shall promulgate the necessary implementing rules and regulations." (Emphasis supplied). In the Phil. Consumers case, 8 as earlier noted, in sustaining Department Order No. 37, the Court. citing certain sections of B.P. Blg. 232 concluded that legal authority to issue that Department Order was vested in the DECS Secretary: "We are not convinced by the argument that the power to regulate school fees 'does not always include the power to increase' such fees. Such 57 (3) of Batas Pambansa Blg. 232, otherwise known as the Education Act of 1982. vests the DECS with the power to regulate the educational system in the country, to wit: 'Sec. 57. Educations and Powers of the Ministry. The Ministry shall:

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xxx xxx xxx (3) Promulgate rules and regulations necessary for the administration supervision and regulation of the educational system in accordance with declared policy. xxx xxx xxx' Section 70 of the same Act grants the DECS the power to issue rules which are likewise necessary to discharge its functions and duties under the law, to wit: 'Sec. 70. Rule-making Authority. The Minister of Education and Culture, charged with the administration and enforcement of this Act, shall promulgate the necessary implementing rules and regulations.' In the absence of a statute stating otherwise, this power includes the power to prescribe school fees. No other government agency has been vested with the authority to fix school fees and as such, the power should be considered lodged with the DECS if it is to properly and effectively discharge its functions and duties under the law." 9 (Emphasis supplied). In the Cebu Institute case, 10 the Court said that Section 42 of B.P. Blg. 232 had amended P.D. No. 451. As already noted, this ruling in Cebu Institute had led intervenor CEAP to adopt the position and to urge the same upon us that under Section 42 of B.P. Blg. 232, private schools are authorized to fix and collect tuition and other school fees free from intervention by the DECS Secretary. After careful examination of the provisions of both P.D. No. 451 and BP. Blg. 232, and the opinions of the Court in the Phil. Consumer case and the Cebu Institute case, as well the lengthy pleadings filed by the parties and the intervenors, the Court considers that the legal authority of respondent DECS Secretary to set maximum permissible rates or levels of tuition and other school fees, and to issue guidelines for the imposition and collection thereof, like DECS Order No. 30, must be sustained. Firstly, we are unable to agree with intervenor CEAP that Cebu Institute had the effect of withdrawing from respondent DECS Secretary the power to regulate, and to promulgate rules and regulations relating to, the imposition and collection of tuition and other school fees. A close reading of the opinion of this Court in the Cebu Institute case shows that the Court did not rule that the power granted to the DECS Secretary to fix maximum permissible tuition and other school fees by Section 1 of P.D. No. 451 had been eliminated by Section 42 of B.P. Blg. 232. What the Court dealt with in the Cebu Institute case was the matter of the detailed allocation of the proceeds of increases in tuition and other school fees. In respect of this specific question, there is no dispute that Section 42 of B.P. Blg. 232 did modify P.D. No. 451 by authorizing the DECS Secretary to issue rules and regulations relating to the detailed allocation of funds raised by tuition and other fee increases to various categories of uses and expenditures. What the Court, through Cortes, J., did say in the Cebu Institute case was the following: ". . . What then was the effect of B.P. Blg. 232 on Pres. Dec. No. 451? The Court after comparing section 42 of B.P. Blg. 232 and Pres. Dec. No. 451, particularly section 3(a) thereof, finds evident irreconcilable differences. Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or charges by private schools is lodged with the Secretary of Education and Culture (Sec. 1), where section 42 of B.P. Blg. 232 liberalized the procedure by empowering each private school to determine its rate of tuition and other school fees or charges. Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee increases shall be applied or used to augment the salaries and wages of members of the faculty and other employees of the school, while B.P. Blg. 232 provides that the increment shall be applied or used in accordance with the regulations promulgated by the MECS. A closer look at these differences leads the Court to resolve the question in favor of repeal. As Pointed out by the Solicitor General, three aspects of the disputes provisions of law support the above conclusion. First, the legislative authority under Pres. Dec. No. 451

retained the power to apportion the incremental proceeds of the tuition fee increases; such power is delegated to the Ministry of Education and Culture under B.P Blg. 232. Second, Pres. Dec. No. 451 limits the application or use of the increment to salary or wage increase, institutional development, student assistance and extension services and return on investment, whereas B.P. Blg. 232 gives the MECS discretion to determine the application or use of the increments. Third, the extent of the application or use of the increment under Pres. Dec. 451 is fixed at the pre-determined percentage allocations: 60% for wage and salary increases, 12% for return in investment and the balance of 28% to institutional development, student assistance and extension services, while under B.P. Blg. 232, the extent of the allocation or use of increment is likewise left to the discretion of the MECS. The legislative intent to depart from the statutory limitations under Pres. Dec. No. 451 is apparent in the second sentence of section 42 of B.P. Blg. 232. Pres. Dec. No. 451 and section 42 of B.P. Blg. 232 which cover the same subject matter, are so clearly inconsistent and incompatible with each other that there is no other conclusion but that the latter repeals the former in accordance with section 72 of B.P. Blg. 232 to wit: xxx xxx xxx Having concluded that under B.P. Blg. 232 the collection and application or use of tuition and other school fees are subject only to the limitations under the rules and regulations issued by the Ministry, the crucial point now shifts to the said implementing rules." 11 (Emphasis supplied) Secondly, an examination of the precise language of Section 42 of B.P. Blg. 232 shows that there is really nothing in Section 42 which must be read as eliminating the power of the DECS Secretary in respect of the fixing of maximum tuition and other school fees vested in him by P.D. No. 451. Under Section 42, a private school may determine for itself in the first instance the rate of tuition and other school fees or charges that it deems appropriate. Such determination by the private school is not, however, binding and conclusive as against the secretary of Education, Culture and Sports. The rates and charges adopted by such private school "shall be collectible, and their application or use authorized" provided that such rates and charges are in accord with rules and regulations promulgated by the DECS. It is convenient to quote Section 42 again: "Sec. 42. Tuition and Other School Fees. Each Private school shall determine its rate of tuition and other school fees or charges. The rates and charges adopted by schools pursuant to this provision shall be collectible, and their application or use authorized, subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports." (Emphasis supplied). We do not read the first sentence of Section 42 as granting an unlimited power to private schools to establish any rate of tuition and other school fees and charges that it may desire and to enforce collection of such fees or charges from students. We think it entirely clear that the second sentence of Section 42 is a limiting provision, that is, a provision which, far from authorizing a private school to adopt any level of tuition and other school fees or charges no matter how exorbitant, subjects the schedule of rates and charges adopted by a particular school to the rules and regulations promulgated by the DECS. Thus, the rates and charges adopted by any given private school shall be "collectible". i.e., enforceable against the students and their parents, to the extent that they are consistent with DECS rules and regulations. Put a little differently, the second sentence of Section 42 deals with two (2) distinguishable subjects: (a) the enforceability of rates of fees and charges adopted by private schools: and (b) the enforceability of proposed applications or uses of tile proceeds of such school fees or charges and both are declared subject to rules and regulations promulgated by the DECS. We turn to the argument of petitioner Lina that the DECS Secretary was divested of his authority to promulgate rules and regulations relating to the fixing of tuition and other school fees, by R.A. No. 6728, and that such authority has been transferred instead to the SAC. The Court is unable to agree with this contention. We do not see how R.A. No. 6728 could be regarded as vesting upon the SAC the legal authority to establish maximum permissible tuition and other school

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fees for private schools. As earlier noted, R.A. No. 6728 deals with government assistance to students and teachers in private schools; it does not, in other words, purport to deal at all with the question of authority to fix maximum collectible tuition and other school fees. R.A. No, 6728 did authorize the SAC to issue rules and regulations; but the rules and regulations which may be promulgated by the SAC must relate to the authority granted by R.A. No. 6728 to the SAC. It is axiomatic that a rule or regulation must bear upon, and be consistent with, the provisions of the enabling statute if such rule or regulation is to be valid. 12 The SAC was authorized to define the classes of students who may be entitled to claim government financial assistance. Under the statute, students of schools charging tuition and other school fees in excess of certain identified rates or levels thereof shall not be entitled to claim government assistance or subsidies. The specification of such levels of tuition and other school fees for purposes of qualifying (or disqualifying) the students in such schools for government financial assistance is one thing; this is the task SAC was authorized to carry out though the promulgation of rules and regulations. The determination of the levels of tuition and other school fees which may lawfully be charged by any private school, is clearly another matter; this task is vested in respondent Secretary. It is hardly necessary to add that the Court, in reaching the above conclusion, is not saying that every paragraph and sub-paragraph of DECS Order No. 30 is necessarily valid and consistent with the provisions of the enabling statute(s). We do not understand the parties to be asking us to validate or strike down every such paragraph and sub-paragraph. In respect of the second principal issue, petitioner Lina contends that Section 1(d) of DECS Order No. 30 is inconsistent with Section 10 of R.A. No. 6728. We have earlier pointed out that petitioner's stand is inconsistent with the very language used in Section 10 of R.A. No. 6728 which states in relevant part that: "in any proposed increase in the rate of tuition fees, there shall be appropriate consultations ." Petitioner Lina's argument here is, however, essentially an invocation of "justice and equity." Petitioner argues that: ". . . [T]here is no basis, legal or otherwise, for the respondent Secretary to view 'other fees' as separate and distinct from 'tuition fee rate' for purposes of the consultation requirement of the law. To exclude the imposition of 'other fees' from the consultation process would result in an anomalous situation whereby so-called 'other fees' may become so burdensome that the students and parents concerned may be deprived of the right of being heard or consulted on matter directly affecting their interest. Justice and equity demand that any increase in the tuition fee, tuition fee assessment or 'other fees' which in its totality increases the cost of education, should and must be subjected to consultation, as required in Section 10, R.A. No. 6728." 13 (Emphasis supplied). The Court believes that petitioner's argument cogent though it may be as a social and economic comment is most appropriately addressed. not to a court which must take the law as it is actually written, but rather to the legislative authority which can, if it wishes, change the language and content of the law. As Section 10 of R.A. No. 6728 now stands, we have no authority to strike down paragraph 1 (d) of DECS Order No. 30 as inconsistent with the requirements of Section 10. Summarizing, the first issue we must answer in the affirmative. To the second issue, we must give a negative answer. WHEREFORE, for all the foregoing, the Petition for Prohibition and Mandamus is hereby DISMISSED for lack of merit. No pronouncement as to costs. SO ORDERED.

VITUG, J.:p The Commissioner of Internal Revenue ("CIR") disputes the decision, dated 31 March 1995, of respondent Court of Appeals 1 affirming the 10th August 1994 decision and the 11th October 1994 resolution of the Court of Tax Appeals 2 ("CTA") in C.T.A. Case No. 5015, entitled "Fortune Tobacco Corporation vs. Liwayway Vinzons-Chato in her capacity as Commissioner of Internal Revenue." The facts, by and large, are not in dispute. Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of cigarettes. On various dates, the Philippine Patent Office issued to the corporation separate certificates of trademark registration over "Champion," "Hope," and "More" cigarettes. In a letter, dated 06 January 1987, of then Commissioner of Internal Revenue Bienvenido A. Tan, Jr., to Deputy Minister Ramon Diaz of the Presidential Commission on Good Government, "the initial position of the Commission was to classify 'Champion,' 'Hope,' and 'More' as foreign brands since they were listed in the World Tobacco Directory as belonging to foreign companies. However, Fortune Tobacco changed the names of 'Hope' to 'Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands from the foreign brand category. Proof was also submitted to the Bureau (of Internal Revenue ['BIR']) that 'Champion' was an original Fortune Tobacco Corporation register and therefore a local brand." 3 Ad Valorem taxes were imposed on these brands, 4 at the following rates: BRAND AD VALOREM TAX RATEE.O. 22 and E.O. 273 RA 69560623-86 07-25-87 06-18-9007-01-86 01-01-88 07-05-90 Hope Luxury M. 100'sSec. 142, (c), (2) 40% 45%Hope Luxury M. King Sec. 142, (c), (2) 40% 45%More Premium M. 100'sSec. 142, (c), (2) 40% 45%More Premium InternationalSec. 142, (c), (2) 40% 45% Champion Int'l. M. 100'sSec. 142, (c), (2) 40% 45%Champion M. 100's Sec. 142, (c), (2) 40% 45%Champion M. KingSec. 142, (c), last par. 15% 20%Champion LightsSec. 142, (c), last par. 15% 20% 5 A bill, which later became Republic Act ("RA") No. 7654, 6 was enacted, on 10 June 1993, by the legislature and signed into law, on 14 June 1993, by the President of the Philippines. The new law became effective on 03 July 1993. It amended Section 142(c)(1) of the National Internal Revenue Code ("NIRC") to read; as follows: Sec. 142. Cigars and Cigarettes. xxx xxx xxx (c) Cigarettes packed by machine. There shall be levied, assessed and collected on cigarettes packed by machine a tax at the rates prescribed below based on the constructive manufacturer's wholesale price or the actual manufacturer's wholesale price, whichever is higher: (1) On locally manufactured cigarettes which are currently classified and taxed at fifty-five percent (55%) or the exportation of which is not authorized by contract or otherwise, fifty-five (55%) provided that the minimum tax shall not be less than Five Pesos (P5.00) per pack. (2) On other locally manufactured cigarettes, forty-five percent (45%) provided that the minimum tax shall not be less than Three Pesos (P3.00) per pack. xxx xxx xxx When the registered manufacturer's wholesale price or the actual manufacturer's wholesale price whichever is higher of existing brands of cigarettes, including the amounts intended to cover the taxes, of cigarettes packed in twenties does not exceed Four Pesos and eighty centavos (P4.80) per pack, the rate shall be twenty percent (20%). 7 (Emphasis supplied) About a month after the enactment and two (2) days before the effectivity of RA 7654, Revenue Memorandum Circular No. 37-93 ("RMC 37-93"), was issued by the BIR the full text of which expressed: REPUBLIKA NG PILIPINASKAGAWARAN NG PANANALAPI KAWANIHAN NG RENTAS INTERNAS July 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 37-93

G.R. No. 119761 August 29, 1996 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs.HON. COURT OF APPEALS, HON. COURT OF TAX APPEALS and FORTUNE TOBACCO CORPORATION, respondents.

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SUBJECT: Reclassification of Cigarettes Subject to Excise Tax TO: All Internal Revenue Officers and Others Concerned. In view of the issues raised on whether "HOPE," "MORE" and "CHAMPION" cigarettes which are locally manufactured are appropriately considered as locally manufactured cigarettes bearing a foreign brand, this Office is compelled to review the previous rulings on the matter. Section 142 (c)(1) National Internal Revenue Code, as amended by R.A. No. 6956, provides: On locally manufactured cigarettes bearing a foreign brand, fifty-five percent (55%) Provided, That this rate shall apply regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette bears a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. Under the foregoing, the test for imposition of the 55% ad valorem tax on cigarettes is that the locally manufactured cigarettes bear a foreign brand regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. The brand must be originally owned by a foreign manufacturer or producer. If ownership of the cigarette brand is, however, not definitely determinable, ". . . the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. . . ." "HOPE" is listed in the World Tobacco Directory as being manufactured by (a) Japan Tobacco, Japan and (b) Fortune Tobacco, Philippines. "MORE" is listed in the said directory as being manufactured by: (a) Fills de Julia Reig, Andorra; (b) Rothmans, Australia; (c) RJR-Macdonald Canada; (d) Rettig-Strenberg, Finland; (e) Karellas, Greece; (f) R.J. Reynolds, Malaysia; (g) Rothmans, New Zealand; (h) Fortune Tobacco, Philippines; (i) R.J. Reynolds, Puerto Rico; (j) R.J. Reynolds, Spain; (k) Tabacalera, Spain; (l) R.J. Reynolds, Switzerland; and (m) R.J. Reynolds, USA. "Champion" is registered in the said directory as being manufactured by (a) Commonwealth Bangladesh; (b) Sudan, Brazil; (c) Japan Tobacco, Japan; (d) Fortune Tobacco, Philippines; (e) Haggar, Sudan; and (f) Tabac Reunies, Switzerland. Since there is no showing who among the above-listed manufacturers of the cigarettes bearing the said brands are the real owner/s thereof, then it follows that the same shall be considered foreign brand for purposes of determining the ad valorem tax pursuant to Section 142 of the National Internal Revenue Code. As held in BIR Ruling No. 410-88, dated August 24, 1988, "in cases where it cannot be established or there is dearth of evidence as to whether a brand is foreign or not, resort to the World Tobacco Directory should be made." In view of the foregoing, the aforesaid brands of cigarettes, viz: "HOPE," "MORE" and "CHAMPION" being manufactured by Fortune Tobacco Corporation are hereby considered locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax on cigarettes. Any ruling inconsistent herewith is revoked or modified accordingly. (SGD) LIWAYWAY VINZONS-CHATOCommissioner On 02 July 1993, at about 17:50 hours, BIR Deputy Commissioner Victor A. Deoferio, Jr., sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it was addressed to no one in particular. On 15 July 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy of RMC 37-93. In a letter, dated 19 July 1993, addressed to the appellate division of the BIR, Fortune Tobacco requested for a review, reconsideration and recall of RMC 37-93. The request was denied on 29 July 1993. The following day, or on 30 July 1993, the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9,598,334.00. On 03 August 1993, Fortune Tobacco filed a petition for review with the CTA. 8 On 10 August 1994, the CTA upheld the position of Fortune Tobacco and adjudged:

WHEREFORE, Revenue Memorandum Circular No. 37-93 reclassifying the brands of cigarettes, viz: "HOPE," "MORE" and "CHAMPION" being manufactured by Fortune Tobacco Corporation as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax on cigarettes is found to be defective, invalid and unenforceable, such that when R.A. No. 7654 took effect on July 3, 1993, the brands in question were not CURRENTLY CLASSIFIED AND TAXED at 55% pursuant to Section 1142(c)(1) of the Tax Code, as amended by R.A. No. 7654 and were therefore still classified as other locally manufactured cigarettes and taxed at 45% or 20% as the case may be. Accordingly, the deficiency ad valorem tax assessment issued on petitioner Fortune Tobacco Corporation in the amount of P9,598,334.00, exclusive of surcharge and interest, is hereby canceled for lack of legal basis. Respondent Commissioner of Internal Revenue is hereby enjoined from collecting the deficiency tax assessment made and issued on petitioner in relation to the implementation of RMC No. 37-93. SO ORDERED. 9 In its resolution, dated 11 October 1994, the CTA dismissed for lack of merit the motion for reconsideration. The CIR forthwith filed a petition for review with the Court of Appeals, questioning the CTA's 10th August 1994 decision and 11th October 1994 resolution. On 31 March 1993, the appellate court's Special Thirteenth Division affirmed in all respects the assailed decision and resolution. In the instant petition, the Solicitor General argues: That I. RMC 37-93 IS A RULING OR OPINION OF THE COMMISSIONER OF INTERNAL REVENUE INTERPRETING THE PROVISIONS OF THE TAX CODE. II. BEING AN INTERPRETATIVE RULING OR OPINION, THE PUBLICATION OF RMC 37-93, FILING OF COPIES THEREOF WITH THE UP LAW CENTER AND PRIOR HEARING ARE NOT NECESSARY TO ITS VALIDITY, EFFECTIVITY AND ENFORCEABILITY. III. PRIVATE RESPONDENT IS DEEMED TO HAVE BEEN NOTIFIED OR RMC 37-93 ON JULY 2, 1993. IV. RMC 37-93 IS NOT DISCRIMINATORY SINCE IT APPLIES TO ALL LOCALLY MANUFACTURED CIGARETTES SIMILARLY SITUATED AS "HOPE," "MORE" AND "CHAMPION" CIGARETTES. V. PETITIONER WAS NOT LEGALLY PROSCRIBED FROM RECLASSIFYING "HOPE," "MORE" AND "CHAMPION" CIGARETTES BEFORE THE EFFECTIVITY OF R.A. NO. 7654. VI. SINCE RMC 37-93 IS AN INTERPRETATIVE RULE, THE INQUIRY IS NOT INTO ITS VALIDITY, EFFECTIVITY OR ENFORCEABILITY BUT INTO ITS CORRECTNESS OR PROPRIETY; RMC 37-93 IS CORRECT. 10 In fine, petitioner opines that RMC 37-93 is merely an interpretative ruling of the BIR which can thus become effective without any prior need for notice and hearing, nor publication, and that its issuance is not discriminatory since it would apply under similar circumstances to all locally manufactured cigarettes. The Court must sustain both the appellate court and the tax court. Petitioner stresses on the wide and ample authority of the BIR in the issuance of rulings for the effective implementation of the provisions of the National Internal Revenue Code. Let it be made clear that such authority of the Commissioner is not here doubted. Like any other government agency, however, the CIR may not disregard legal requirements or applicable principles in the exercise of its quasilegislative powers. Let us first distinguish between two kinds of administrative issuances a legislative rule and an interpretative rule. In Misamis Oriental Association of Coco Traders, Inc ., vs. Department of Finance Secretary, 11 the Court expressed: . . . a legislative rule is in the nature of subordinate legislation,

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designed to implement a primary legislation by providing the details thereof . In the same way that laws must have the benefit of public hearing, it is generally required that before a legislative rule is adopted there must be hearing. In this connection, the Administrative Code of 1987 provides: Public Participation. If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. (2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon. (3) In case of opposition, the rules on contested cases shall be observed. In addition such rule must be published. On the other hand, interpretative rules are designed to provide guidelines to the law which the administrative agency is in charge of enforcing. 12 It should be understandable that when an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance for it gives no real consequence more than what the law itself has already prescribed. When, upon the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially adds to or increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. A reading of RMC 37-93, particularly considering the circumstances under which it has been issued, convinces us that the circular cannot be viewed simply as a corrective measure (revoking in the process the previous holdings of past Commissioners) or merely as construing Section 142(c)(1) of the NIRC, as amended, but has, in fact and most importantly, been made in order to place "Hope Luxury," "Premium More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654. Specifically, the new law would have its amendatory provisions applied to locally manufactured cigarettes which at the time of its effectivity were not so classified as bearing foreign brands. Prior to the issuance of the questioned circular, "Hope Luxury," "Premium More," and "Champion" cigarettes were in the category of locally manufactured cigarettes not bearing foreign brand subject to 45% ad valorem tax. Hence, without RMC 37-93, the enactment of RA 7654, would have had no new tax rate consequence on private respondent's products. Evidently, in order to place "Hope Luxury," "Premium More," and "Champion" cigarettes within the scope of the amendatory law and subject them to an increased tax rate, the now disputed RMC 37-93 had to be issued. In so doing, the BIR not simply intrepreted the law; verily, it legislated under its quasi-legislative authority. The due observance of the requirements of notice, of hearing, and of publication should not have been then ignored. Indeed, the BIR itself, in its RMC 10-86, has observed and provided: RMC NO. 10-86Effectivity of Internal Revenue Rules and Regulations It has been observed that one of the problem areas bearing on compliance with Internal Revenue Tax rules and regulations is lack or insufficiency of due notice to the tax paying public. Unless there is due notice, due compliance therewith may not be reasonably expected. And most importantly, their strict enforcement could possibly suffer from legal infirmity in the light of the constitutional provision on "due process of law" and the essence of the Civil Code provision concerning effectivity of laws, whereby due notice is a basic requirement (Sec. 1, Art. IV, Constitution; Art. 2, New Civil Code). In order that there shall be a just enforcement of rules and regulations, in conformity with the basic element of due process, the following procedures are hereby prescribed for the drafting, issuance and implementation of the said Revenue Tax Issuances: (1) This Circular shall apply only to (a) Revenue Regulations; (b) Revenue Audit Memorandum Orders; and (c) Revenue Memorandum Circulars and Revenue Memorandum Orders bearing on internal revenue tax rules and regulations.

(2) Except when the law otherwise expressly provides, the aforesaid internal revenue tax issuances shall not begin to be operative until after due notice thereof may be fairly presumed. Due notice of the said issuances may be fairly presumed only after the following procedures have been taken; xxx xxx xxx (5) Strict compliance with the foregoing procedures isenjoined. 13 Nothing on record could tell us that it was either impossible or impracticable for the BIR to observe and comply with the above requirements before giving effect to its questioned circular. Not insignificantly, RMC 37-93 might have likewise infringed on uniformity of taxation. Article VI, Section 28, paragraph 1, of the 1987 Constitution mandates taxation to be uniform and equitable. Uniformity requires that all subjects or objects of taxation, similarly situated, are to be treated alike or put on equal footing both in privileges and liabilities. 14 Thus, all taxable articles or kinds of property of the same class must be taxed at the same rate 15 and the tax must operate with the same force and effect in every place where the subject may be found. Apparently, RMC 37-93 would only apply to "Hope Luxury," "Premium More" and "Champion" cigarettes and, unless petitioner would be willing to concede to the submission of private respondent that the circular should, as in fact my esteemed colleague Mr. Justice Bellosillo so expresses in his separate opinion, be considered adjudicatory in nature and thus violative of due process following the Ang Tibay 16 doctrine, the measure suffers from lack of uniformity of taxation. In its decision, the CTA has keenly noted that other cigarettes bearing foreign brands have not been similarly included within the scope of the circular, such as 1. Locally manufactured by ALHAMBRA INDUSTRIES, INC. (a) "PALM TREE" is listed as manufactured by office of Monopoly, Korea (Exhibit "R") 2. Locally manufactured by LA SUERTE CIGAR and CIGARETTE COMPANY (a) "GOLDEN KEY" is listed being manufactured by United Tobacco, Pakistan (Exhibit "S") (b) "CANNON" is listed as being manufactured by Alpha Tobacco, Bangladesh (Exhibit "T") 3. Locally manufactured by LA PERLA INDUSTRIES, INC. (a) "WHITE HORSE" is listed as being manufactured by Rothman's, Malaysia (Exhibit "U") (b) "RIGHT" is listed as being manufactured by SVENSKA, Tobaks, Sweden (Exhibit "V-1") 4. Locally manufactured by MIGHTY CORPORATION (a) "WHITE HORSE" is listed as being manufactured by Rothman's, Malaysia (Exhibit "U-1") 5. Locally manufactured by STERLING TOBACCO CORPORATION (a) "UNION" is listed as being manufactured by Sumatra Tobacco, Indonesia and Brown and Williamson, USA (Exhibit "U-3") (b) "WINNER" is listed as being manufactured by Alpha Tobacco, Bangladesh; Nangyang, Hongkong; Joo Lan, Malaysia; Pakistan Tobacco Co., Pakistan; Premier Tobacco, Pakistan and Haggar, Sudan (Exhibit "U-4"). 17 The court quoted at length from the transcript of the hearing conducted on 10 August 1993 by the Committee on Ways and Means of the House of Representatives; viz: THE CHAIRMAN. So you have specific information on Fortune Tobacco alone. You don't have specific information on other tobacco manufacturers. Now, there are other brands which are similarly situated. They are locally manufactured bearing foreign brands. And may I enumerate to you all these brands, which are also listed in the World Tobacco Directory . . . Why were these brand not reclassified at

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55 if your want to give a level playing filed to foreign manufacturers? MS. CHATO. Mr. Chairman, in fact, we have already prepared a Revenue Memorandum Circular that was supposed to come after RMC No. 37-93 which have really named specifically the list of locally manufactured cigarettes bearing a foreign brand for excise tax purposes and includes all these brands that you mentioned at 55 percent except that at that time, when we had to come up with this, we were forced to study the brands of Hope, More and Champion because we were given documents that would indicate the that these brands were actually being claimed or patented in other countries because we went by Revenue Memorandum Circular 1488 and we wanted to give some rationality to how it came about but we couldn't find the rationale there. And we really found based on our own interpretation that the only test that is given by that existing law would be registration in the World Tobacco Directory. So we came out with this proposed revenue memorandum circular which we forwarded to the Secretary of Finance except that at that point in time, we went by the Republic Act 7654 in Section 1 which amended Section 142, C-1, it said, that on locally manufactured cigarettes which are currently classified and taxed at 55 percent. So we were saying that when this law took effect in July 3 and if we are going to come up with this revenue circular thereafter, then I think our action would really be subject to question but we feel that . . . Memorandum Circular Number 37-93 would really cover even similarly situated brands. And in fact, it was really because of the study, the short time that we were given to study the matter that we could not include all the rest of the other brands that would have been really classified as foreign brand if we went by the law itself . I am sure that by the reading of the law, you would without that ruling by Commissioner Tan they would really have been included in the definition or in the classification of foregoing brands. These brands that you referred to or just read to us and in fact just for your information, we really came out with a proposed revenue memorandum circular for those brands . (Emphasis supplied) (Exhibit "FF-2-C," pp. V-5 TO V-6, VI-1 to VI-3). xxx xxx xxx MS. CHATO. . . . But I do agree with you now that it cannot and in fact that is why I felt that we . . . I wanted to come up with a more extensive coverage and precisely why I asked that revenue memorandum circular that would cover all those similarly situated would be prepared but because of the lack of time and I came out with a study of RA 7654, it would not have been possible to really come up with the reclassification or the proper classification of all brands that are listed there. . . (emphasis supplied) (Exhibit "FF-2d," page IX-1) xxx xxx xxx HON. DIAZ. But did you not consider that there are similarly situated? MS. CHATO. That is precisely why, Sir, after we have come up with this Revenue Memorandum Circular No. 37-93, the other brands came about the would have also clarified RMC 37-93 by I was saying really because of the fact that I was just recently appointed and the lack of time, the period that was allotted to us to come up with the right actions on the matter, we were really caught by the July 3 deadline. But in fact, We have already prepared a revenue memorandum circular clarifying with the other . . . does not yet, would have been a list of locally manufactured cigarettes bearing a foreign brand for excise tax purposes which would include all the other brands that were mentioned by the Honorable Chairman. (Emphasis supplied) (Exhibit "FF-2-d," par. IX-4). 18 All taken, the Court is convinced that the hastily promulgated RMC 3793 has fallen short of a valid and effective administrative issuance. WHEREFORE, the decision of the Court of Appeals, sustaining that of the Court of Tax Appeals, is AFFIRMED. No costs. SO ORDERED.

FELICIANO, J.: Petitioner Ruble Rubenecia assails Civil Service Commission ("CSC" or "Commission") Resolution No. 94-0533, dated 25 January 1994, aquitting him of a charge of insubordination but finding him guilty of several other administrative charges and imposing upon him the penalty of dismissal from the service. He also questions the validity of CSC Resolution No. 93-2387 dated 29 June 1993, which allegedly abolished the Merit System Protection Board ("MSPB") and authorized the elevation of cases pending before that body to the Commission. Teachers of Catarman National High School in Catarman, Northern Samar, filed before the MSPB an administrative complaint against petitioner Rubenecia, the School Principal, for dishonesty, nepotism, oppression and violation of Civil Service Rules. After a preliminary inquiry, the MSPB on 15 January 1992 formally charged Rubenecia and required him to file an answer with the CSC Regional Office in Tacloban City. On 24 February 1992, petitioner Rubenecia, instead of filing an answer, requested that he be furnished with copies of the documents submitted by complainants in support of the charges against him. 1 On 15 May 1992, the CSC Regional Director assigned to investigate the case invited Rubenecia to the Regional Office and there identify and pick up the documents he desired. The Regional Office had then just received the records of the case transmitted by the MSPB. In response, Rubenecia requested that his visit to the CSC Regional Office be deferred because of alleged problems in his school relating to the enrollment period. The CSC reiterated on 10 June 1992 its order to Rubenecia to file his answer. In turn, petitioner through counsel in a letter dated 9 July 1992, reiterated his request that the CSC Regional Office furnish him copies of the documents submitted in connection with the charges against him. Although petitioner did not file his answer, the Regional Director set the case for hearing on 20 August 1992. This hearing, however, did not take place as the complainants did not there show up. Petitioner Rubenecia appeared at that hearing, but filed no answer. In an order issued on the same day, i.e., 20 August 1992, the Regional Office declared that the case was deemed submitted for resolution on the basis of the documents theretofore filed. On 25 August 1992, Rubenecia wrote to the Chairman of the Civil Service Commission, praying that the case against him be dismissed and attaching to that letter many documents in support of his claim of innocence. On 28 September 1992, the Regional Director submitted an investigation report to the Chairman, MSPB. Before the MSPB could render a decision, the Commission issued on 29 June 1993 Resolution No. 93-2387 which provided, among other things, that cases then pending before the MSPB were to be elevated to the Commission for decision. The Commission, accordingly, took over the case against petitioner and on 25 January 1994, rendered its Resolution No. 94-0533 finding petitioner guilty and ordering his dismissal from the service. Petitioner moved for reconsideration, asserting lack of jurisdiction on the part of the Commission and attaching most if not all of the same documents he had annexed to his letter-answer to support his assertion of innocence. The motion for reconsideration was denied in a resolution of the Commission on 31 May 1994. Two (2) principal issues are raised in this Petition for Certiorari: (1) Whether or not the CSC had authority to issue its Resolution No. 93-2387 and assume jurisdiction over the administrative case against petitioner; and (2) Whether or not petitioner had been accorded due process in connection with rendition of CSC Resolution No. 94-0533 finding him guilty and ordering his dismissal from the service. I

G.R. No. 115942 May 31, 1995 RUBLE RUBENECIA, petitioner, vs.CIVIL SERVICE COMMISSION, respondent.

In respect of the first issue, petitioner Rubenecia contends that the Commission had no jurisdiction to take over the administrative case against him from the MSPB for the reason that CSC Resolution No.

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93-2387 was invalid. The argument of the petitioner is that since the MSPB was a creation of law, it could be abolished only by law, and that Resolution No. 93-2387 was accordingly an ultra vires act on the part of the Commission. Resolution No. 93-2387 reads in full: WHEREAS, the Civil Service Commission recognizes the governmentwide call and the need for streamlining of operations which requires implification of systems, cutting of red tape and elimination of unnecessary bureaucratic layer; WHEREAS, one of the powers and functions of the Commission provided for in Section 12 (11) of Book V of the Administrative Code of 1987 is to hear and decide administrative cases instituted by or brought before it directly or on appeal, including contested appointments and review decisions and actions of its offices and of the agencies attach to it; WHEREAS, Section 47 (1) of Book V of the Administrative Code of 1987 specifically provides that the Commission shall decide upon appeal all administrative disciplinary cases involving the imposition of penalty of suspension for more that thirty days, or fine in an amount exceeding thirty days salary, demotion in rank or salary or transfer removal or dismissal from office; WHEREAS, under Section 16 (2) of Book V of the Code, the Merit System Protection Board (MSPB), an office of the Commission, has the function to hear and decide administrative cases involving officials and employees of the civil service concurrently with the Commission; WHEREAS, most decisions on administrative cases rendered by the MSPB are later appealed to the Commission for review and final resolution; WHEREAS, the existing procedure wherein most administrative cases are first reviewed by the MSPB before they are elevated to the Commission makes it difficult for these cases to be finally resolved within a short period of time; WHEREAS, the present situation requires immediate streamlining of the operation of the Civil Service Commission to achieve as speedier delivery of administrative justice and economical operation without impairing due process and the substantive rights of the parties in administrative cases; NOW, THEREFORE, pursuant to the provisions of Section 17 of Book V of the Administrative Code of 1987 which authorizes the Commission, as an independent constitutional body, to effect changes in its organization as the need arises, the Commission Resolves as it is hereby Resolved to effect the following changes; 1. Decisions in administrative cases involving officials and employees of the civil service appealable to the Commission pursuant to Section 47 of Book V of the Code including personnel actions such as contested appointments shall now be appealed directly to the Commission and not to the MSPB; and 2. Decisions and administrative cases involving the officials and employees of the Civil Service including contested appointments which have already been appealed to the MSPB and other pending administrative cases brought directly before the MSPB, shall now be elevated to the Commission for final resolution. Parties in administrative cases pending before the MSPB shall be notified in writing that their respective cases have already been elevated to the Commission for final resolution. They shall have 15 days from receipt of notice to submit their comments on or objections to the new procedures. This Resolution shall take effect on 1 July 1993 and the new procedure shall remain effective until rescinded by the Commission in another resolution. Adopted this 29th day of June 1993. Patricia A. Sto. TomasChairman Ramon P. Ereneta, Jr. Thelma P. GamindeCommissioner Commissioner Juanito DemetrioBoard Secretary VI

(Emphasis supplied) The Merit System Protection Board was originally created by P.D. No. 1409, dated 8 June 1978, Section 1 of which said: "There is hereby created in the Civil Service Commission a Merit Systems Board." The Board was composed of "a commissioner and two (2) associate commissioners" appointed by the CSC. 2 The powers and functions of this Board were set out in Section 5 of P.D. No. 1409 in the following terms: Sec. 5. Powers and Functions of the Board. The Board shall have the following powers and functions, among others: (1) Hear and decide administrative cases involving officers and employees of the civil service. (2) Hear and decide cases brought before it by officers and employees who feel aggrieved by the determination of appointing authorities involving appointment promotion, transfer, detail, reassignment and other personnel actions, as well as complaints against any officers in the government arising from abuses arising from personnel actions of these officers or from violation of the merit system. (3) Hear and decide complaints of civil service employees regarding malpractices of other officials and employees. (4) Promulgate, subject to the approval of the Civil Service Commission, rules and regulations to carry out the functions of the Board. (5) Administer oaths, issue subpoena and subpoena duces tecum, and take testimony in any investigation or inquiry. The Board shall have the power to punish for contempt in accordance with the rules of court under the same procedure with the same penalties provided therein. (6) Perform such other functions as may be assigned by the Civil Service Commission. xxx xxx xxx Decisions of the Board involving removal of officers and employees from the service were "subject to automatic review by the Commission;" all other decisions of the Board were also subject to appeal to the Commission. 3 As noted, P.D. No. 1409 had "created in the Civil Service Commission [the] Merit Systems Board." Section 16 of the present Civil Service Law found in the 1987 Administrative Code followed the same line and recreated the Merit Systems Board as an office of the Commission and gave it a new name: "Merit System Protection Board." Section 16 of the present Civil Service Law reads as follows, in pertinent part: Sec. 16. Offices in the Commission . The Commission shall have the following offices: (1) The Office of the Executive Director . . . (2) The Merit System Protection Board composed of a Chairman and two (2) members which have the following functions: (a) Hear and decide on appeal administrative cases involving officials and employees of the Civil Service. Its decision shall be final except those involving dismissal or separation from the service which may be appealed to the Commission; (b) Hear and decide cases brought before it on appeal by officials and employees who feel aggrieved by the determination of appointing authorities involving personnel actions and violations of the merit system. The decision of the Board shall be final except those involving division chiefs or officials of higher ranks which may be appealed to the Commission; (c) Directly take cognizance of complaints affecting functions of the Commission, those which are unacted upon by the agencies, and such other complains which required direct action of the Board in the interest of justice; (d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any investigation or inquiry, punish for contempt in accordance with the same procedures and penalties prescribed in the Rules of Court; and

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(e) Promulgate rules and regulations to carry out the functions of the Board subject to the approval of the Commission. (3) The Office of Legal Affairs . . . . . xxx xxx xxx The 1987 Administrative Code thus made clear that the MSPB was intended to be an office of the Commission like any of the other thirteen (13) offices in the Commission: e.g., the Office of Legal Affairs; the Office of Planning and Management; the Central Administrative Office, and so forth. The MSPB was, in other words, a part of the internal structure and organization of the Commission and thus a proper subject of organizational change which the Commission is authorized to undertake under Section 17 of the present Civil Service Law: Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least one (1) Assistant Director, and may have such divisions as are necessary to carry out their respective functions. As an independent constitutional body, the Commission may effect changes in the organization as the need arises. (Emphasis supplied). Since it was part and parcel of the internal organization of the Commission, the MSPB was not an autonomous entity created by law and merely attached for administrative purposes to the Civil Service Commission. In Aida Eugenio v. Civil Service Commission , 4 the Court invalidated a CSC Resolution which had transferred the Career Executive Service Board to the Office for Career Executive Service of the CSC precisely because the Career Executive Service Board was an autonomous entity created by a special law and attached, for administrative purposes only, to the Civil Service Commission; that Board did not fall within the control of the Civil Service Commission. It will be noted that under the provisions of Section 16 (2) (a) and (b) quoted earlier, cases originating outside the Civil Service Commission itself and appealed to the MSPB were, in cases involving division chiefs and higher officials and cases where the penalty imposed was dismissal or separation from the service, subject to further appeal to the Commission itself. At the same time, cases filed originally with the MSPB could also be filed directly with the Commission itself under Section 12 (11) of the Civil Service Law. It was this apparent duplication or layering of functions within the Commission that the Commission sought to rationalize and eliminate by enacting Resolution No. 93-2387 quoted in full earlier. The change instituted by CSC Resolution No. 93-2387 consisted basically of the following: decision in administrative cases appealable to the Commission pursuant to Section 47 of the present Civil Service Law may now be appealed directly to the Commission itself and not to the MSPB. Administrative cases already pending on appeal before the MSPB or previously brought directly to the MSPB, at the time of the issuance of Resolution No. 93-2387, were required to be elevated to the Commission for final resolution. The functions of the MSPB relating to the determination of administrative disciplinary cases were, in other words, re-allocated to the Commission itself. These changes were prescribed by the Commission in its effort to "streamline the operation of the CSC" which in turn required the "simplification of systems, cutting of red tape and elimination of [an] unnecessary bureaucratic layer." The previous procedure made it difficult for cases to be finally resolved within a reasonable period of time. The change, therefore, was moved by the quite legitimate objective of simplifying the course that administrative disciplinary cases, like those involving petitioner Rubenecia, must take. We consider that petitioner Rubenecia had no vested right to a two-step administrative appeal procedure within the Commission, that is, appeal to an office of the Commission, the MSPB, and thereafter a second appeal to the Civil Service Commission itself (i.e., the Chairman and the two [2] Commissioners of the Civil Service Commission), a procedure which most frequently consumed a prolonged period of time. We note also that Resolution No. 93-2387 did not purport to abolish the MSPB nor to effect the termination of the relationship of public employment between the Commission and any of its officers or employees. At all events, even if Resolution No. 93-2387 had purported to do so, petitioner Rubenecia, who does not claim to be an officer or employee of the MSPB, has no personality or standing to contest such termination of public employment. In Fernandez and De

Lima v. Hon. Patricia A. Sto. Tomas, etc., et al ., 5 the Court upheld Resolution No. 94-3710 of the Civil Service which effected certain changes in the internal organization and structure of the Commission. The Court said: We consider that Resolution No. 94-3710 has not abolished any public office as that term is used in the law of public officers. It is essential to note that none of the "changes in organization" introduced by Resolution No. 94-3710 carried with it or necessarily involved the termination of the relationship of public employment between the Commission and any of its officers and employees . We find it very difficult to suppose that the 1987 Revised Administrative Code having mentioned fourteen (14) different offices of the CSC, meant to freeze these offices and to cast in concrete, as it were, the internal organization of the Commission until it might please Congress to change such internal organization regardless of the ever changing needs of the civil service as a whole. To the contrary, the legislative authority had expressly authorized the Commission to carry out "changes in the organization," as the need [for such changes] arises. Petitioner Rubenecia also claims that the Civil Service Commission itself (as distinguished from the MSPB) did not acquire jurisdiction over his case because he had not been notified by individual written notice sent by mail that his case had been elevated to the Civil Service Commission as required by Resolution No. 93-2387. We consider this objection unmeritorious. CSC Resolution No. 93-2387, quoted earlier, did not require individual written notice sent by mail to parties in administrative cases pending before the MSPB. Assuming that Rubenecia had not in fact been sent an individual notice, the fact remains that Resolution No. 93-2387 was published in a newspaper of general circulation (The Manila Standard, issue of 16 July 1993 6 ); the Commission may accordingly be deemed to have complied substantially with the requirement of written notice in its own Resolution. Moreover, petitioner himself had insisted on pleading before the Commission, rather than before the MSPB; he filed before the Commission itself his letter-cum-annexes which effectively was his answer to the Formal Charge instituted before the MSPB. He cannot now be heard to question the jurisdiction of the Commission. II We turn to petitioner's contention that he had been denied due process when the Commission rendered its Resolution No. 94-0533 finding him guilty and ordering his dismissal from the government service. The fundamental rule of due to process requires that a person be accorded notice and an opportunity to be heard. These requisites were respected in the case of petitioner Rubenecia. The Formal Charge prepared by the MSPB and given to petitioner Rubenecia constituted sufficient notice which, in fact, had enabled him to prepare his defense. The Formal Charge contained the essence of the complaint and the documents in support thereof and the conclusion of the MSPB finding a prima facie case against Rubenecia. Rubenecia himself admitted that he had been furnished with copies of an affidavit and testimonies of the principal witnesses against him that were given during the preliminary hearing of the case against Rubenecia. 7 We are also not persuaded by petitioner's complaint that he had not been furnished copies of all the documents that had accompanied the Formal Charge. Rubenecia was given an opportunity by the Investigating Officer, the Regional Director of CSC, to obtain those documents from the CSC Regional Office. Rubenecia did not avail himself of that opportunity and he cannot now be heard to complain that he was not given such documents. At all events, as already noted, he sent a formal letter-answer to Chairman Sto. Tomas controverting the charges against him and submitted voluminous documents in support of his claim of innocence and prayed for dismissal of the Formal Charge. This letter-answer constitutes proof that he did have notice of the accusations against him and was in fact able to present his own defense. Petitioner's answer to the Formal Charge was considered by the Investigating Officer. This Officer, however, concluded in his report that "the evidence presented by respondent [Rubenecia] could not outweigh that of the prosecution as contained in the records. 8 Finally, the motion for reconsideration filed by Rubenecia before the Commission cured whatever defect might have existed in respect of

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alleged denial of procedural due process. 9 Denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard on his motion for reconsideration. 10 In the instant case, petitioner was heard not only in respect of his motion for reconsideration; he was also in fact afforded reasonable opportunity to present his case before decision was rendered by the Commission finding him guilty. Rubenecia also claims that the Commission had erred in disregarding the "overwhelming evidence" in his favor. The settled rule in our jurisdiction is that the findings of fact of an administrative agency must be respected, so long as such findings of fact are supported by substantial evidence, even if such evidence might not be overwhelming or even preponderant. It is not the task of an appellate court, like this Court, to weigh once more the evidence submitted before the administrative body and to substitute its own judgment for that of the administrative agency in respect of sufficiency of evidence. 11 In the present case, in any event, after examination of the record of this case, we conclude that the decision of the Civil Service Commission finding Rubenecia guilty of the administrative charges prepared against him, is supported by substantial evidence. In Resolution No. 94-0533, the Commission drew the following conclusions in respect of the charges against petitioner Rubenecia: I. VIOLATION OF CIVIL SERVICE RULES AND REGULATIONS The records show that Rubenecia committed the said offense. He himself admitted that he did not accomplish his DTR but this was upon the suggestion of the Administrative Officer. Rubenecia cannot use as an excuse the alleged suggestion of an Administrative Officer. As the principal of a national high School, he is expected to know the basic civil service law, rules, and regulations. II DISHONESTY The Commission finds Rubenecia liable. He was charged for misrepresenting that he was on "Official Travel" to Baguio City to attend a three-week seminar and making it appear in his CSC Form No. 7 for the month of October 1988 that the has a perfect attendance for that month. Rubenecia in order to rebut the same simply reiterated previous allegation that he attended the SEDP Training in Baguio City during the questioned months without even an attempt on his part to adduce evidence documentary or testimonial that would attest to the truth of his allegation that he was indeed in Baguio during those weeks for training purposes. A mere allegation cannot obviously prevail over a more direct and positive statement of Celedonio Layon, School Division Superintendent, Division of Northern Samar, when the latter certified that he had no official knowledge of the alleged "official travel" of Rubenecia. Moreover, verification with the Bureau of Secondary Schools reveals that no training seminar for school principal was conducted by DECS during that time. It was also proven by records that he caused one Mrs. Cecilia vestra to render service as Secondary School Teacher from January 19, 1990 to August 30, 1991 without any duly issued appointment by the appointing authority. III. NEPOTISM With respect to the charge of Nepotism, Rubenecia alleged that he is not the appointing authority with regard to the appointment of his brother-in-law as Utilityman but merely a recommending authority. With this statement, the Commission finds Rubenecia guilty. It should be noted that under the provision of Sec. 59, of the 1987 Administrative Code, the recommending authority is also prohibited from recommending the appointment to a non-teaching position of his relatives within the prohibited degree. IV. OPPRESSION Rubenecia is also guilty of Oppression. He did not give on time the money benefits due to Ms. Leah Rebadulla and Mr. Rolando Tafalla, both Secondary Teachers of CNHS, specifically their salary differentials for July to December 1987, their salaries for the month of May and half of June 1988; their proportional vacation salaries for the semester of 1987-1988, and the salary of Mr. Tafalla for the month of June, 1987. Rubenecia did not even attempt to present countervailing evidence. Without being specifically denied, they are deemed admitted by Rubenecia. V INSUBORDINATION

He is not liable for Insubordination arising from his alleged refusal to obey the "Detail Order" by filing a sick leave and vacation leave successively. The records show that the two applications for leave filed by Rubenecia were duly approved by proper official, hence it cannot be considered an act of Insubordination on the part of Rubenecia when he incurred absences based on an approved application for leave of absence. Rubenecia is therefore found guilty of Dishonesty, Nepotism, Oppression and Violations of Civil Service Rules and Regulations. WHEREFORE, foregoing premises considered, the Commission hereby resolves to find Ruble Rubenecia guilty of Dishonesty, Nepotism, Oppression and Violation of Civil Service Rules and Ragulations. Accordingly, he is meted, out the penalty of dismissal from the service. 12 We find no basis for overturning the above conclusions as the product merely of arbitrary whims and caprice or of bad faith and malice. We conclude that petitioner Rubenecia has failed to show grave abuse of discretion or any act without or in excess of jurisdiction on the part of public respondent Commission in issuing its Resolution No. 93-2387 dated 29 June 1993 and Resolution No. 94-0533 dated 25 January 1994. WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit. SO ORDERED.

G.R. No. L-6791

March 29, 1954

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.QUE PO LAY, defendant-appellant. Prudencio de Guzman for appellant.First Assistant Solicitor General Ruperto Kapunan, Jr., and Solicitor Lauro G. Marquez for appellee. MONTEMAYOR, J.: 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, and sentencing him to suffer six months imprisonment, to pay a fine of P1,000 with subsidiary imprisonment in case of insolvency, and to pay the costs. The charge was that the appellant who was in possession of foreign exchange consisting of U.S. dollars, U.S. checks and U.S. money orders amounting to about $7,000 failed 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 effect. It is contended that Commonwealth Act. No., 638 and Act 2930 both require said circular to be published in the Official Gazette, it being an order or notice of general applicability. 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. We agree with the Solicitor General that the laws in question do not require the publication of the circulars, regulations and notices therein mentioned in order to become binding and effective. All that said two laws provide is that laws, resolutions, decisions of the Supreme Court and Court of Appeals, notices and documents required by law to be of no force and effect. In other words, said two Acts merely enumerate and make a list of what should be published in the Official Gazette, presumably, for the guidance of the different branches of the Government issuing same, and of the Bureau of Printing. However, section 11 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

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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. Our Old Civil code, ( Spanish Civil Code of 1889) has a similar provision about the effectivity of laws, (Article 1 thereof), namely, that laws shall be binding twenty days after their promulgation, and that their promulgation shall be understood as made on the day of the termination of the publication of the laws in the Gazette. Manresa, commenting on this article is of the opinion that the word "laws" include regulations and circulars issued in accordance with the same. He says: El Tribunal Supremo, ha interpretado el articulo 1. del codigo Civil en Sentencia de 22 de Junio de 1910, en el sentido de que bajo la denominacion generica de leyes, se comprenden tambien los Reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las mismas por el Gobierno en uso de su potestad. Tambien el poder ejecutivo lo ha venido entendiendo asi, como lo prueba el hecho de que muchas de sus disposiciones contienen la advertencia de que empiezan a regir el mismo dia de su publicacion en la Gaceta, advertencia que seria perfectamente inutil si no fuera de aplicacion al caso el articulo 1.o del Codigo Civil. (Manresa, Codigo Civil Espaol, Vol. I. p. 52). 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. But the Solicitor General also contends that this question of nonpublication of the Circular is being raised for the first time on appeal in this Court, which cannot be done by appellant. Ordinarily, one may raise on appeal any question of law or fact that has been raised in the court below and which is within the issues made by the parties in their pleadings. (Section 19, Rule 48 of the Rules of Court). But the question of non-publication is fundamental and decisive. If as a matter of fact Circular No. 20 had not been published as required by law before its violation, then in the eyes of the law there was no such circular to be violated and consequently appellant committed no violation of the circular or committed any offense, and the trial court may be said to have had no jurisdiction. This question may be raised at any stage of the proceeding whether or not raised in the court below. In view of the foregoing, we reverse the decision appealed from and acquit the appellant, with costs de oficio.

Court of First Instance of Zambales, presided by respondent judge. The information reads: t.hqw That on or about and during the second week of May 1979, in the City of Olongapo, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, guaranteeing the authenticity and genuineness of the same and with intent to defraud one Filipinas Tan by means of false pretenses and pretending to have sufficient funds deposited in the Bank of the Philippine Island, did then and there wilfully, unlawfully and feloniously make and issue Bank of Philippine Island Check No. D-357726 in the amount of P200,000.00 Philippine Currency, said accused well knowing that he has no sufficient funds at the Bank of the Philippine Island and upon presentation of the said check to the bank for encashment, the same was dishonored for the reason that the said accused has no sufficient funds with the said bank and despite repeated demands made by Filipinas Tan on the accused to redeem the said check or pay the amount of P200,000.00, said accused failed and continues to fail to redeem the said check or to pay the said amount, to the damage and prejudice of said Filipinas Tan in the aforementioned amount of P200,000.00 Philippine Currency. (pp. 23-24, Rollo) Before he could be arraigned respondent Go Bio, Jr. filed a Motion to Quash the information on the ground that the information did not charge an offense, pointing out that at the alleged commission of the offense, which was about the second week of May 1979, Batas Pambansa Bilang 22 has not yet taken effect. The prosecution opposed the motion contending, among others, that the date of the dishonor of the check, which is on September 26, 1979, is the date of the commission of the offense; and that assuming that the effectivity of the law Batas Pambansa Bilang 22 is on June 29, 1979, considering that the offense was committed on September 26, 1979, the said law is applicable. In his reply, private respondent Go Bio, Jr. submits that what Batas Pambansa Bilang 22 penalizes is not the fact of the dishonor of the check but the act of making or drawing and issuing a check without sufficient funds or credit. Resolving the motion, respondent judge granted the same and cancelled the bail bond of the accused. In its order of August 23, 1982, respondent judge said: t.hqw The Court finds merit to the contention that the accused cannot be held liable for bouncing checks prior to the effectivity of Batas Pambansa Bilang 22 although the check may have matured after the effectivity of the said law. No less than the Minister of Justice decreed that the date of the drawing or making and issuance of the bouncing check is the date to reckon with and not on the date of the maturity of the check. (Resolution No. 67, S. 1981, People's Car vs. Eduardo N. Tan, Feb. 3, 1981; Resolution No. 192, S. 1981, Ricardo de Guia vs. Agapito Miranda, March 20, 1981). Hence, the Court believes that although the accused can be prosecuted for swindling (Estafa, Article 315 of the Revised Penal Code), the Batas Pambansa Bilang 22 cannot be given a retroactive effect to apply to the above entitled case. (pp. 49- 50, Rollo) Hence, this petition for review on certiorari, petitioner submitting for review respondent judge's dismissal of the criminal action against private respondent Go Bio, Jr. for violation of Batas Pambansa Bilang 22, otherwise known as the Bouncing Checks Law. Petitioner contends that Batas Pambansa Bilang 22 was published in the April 9, 1979 issue of the Official Gazette. Fifteen (15) days therefrom would be April 24, 1979, or several days before respondent Go Bio, Jr. issued the questioned check around the second week of May 1979; and that respondent judge should not have taken into account the date of release of the Gazette for circulation because Section 11 of the Revised Administrative Code provides that for the purpose of ascertaining the date of effectivity of a law that needed publication, "the Gazette is conclusively presumed to be published on the day indicated therein as the date of issue." Private respondent Go Bio, Jr. argues that although Batas Pambansa Bilang 22 was published in the Official Gazette issue of April 9, 1979, nevertheless, the same was released only on June 14, 1979 and, considering that the questioned check was issued about the second week of May 1979, then he could not have violated Batas Pambansa

G.R. No. L-62243 October 12, 1984 PEOPLE OF THE PHILIPPINES, petitioner, vs.HON. REGINO VERIDIANO II, as Presiding Judge of the Court of First Instance of Zambales and Olongapo City, Branch I, and BENITO GO BIO, JR., respondents. The Solicitor General for petitioner. Anacleto T. Lacanilao and Carmelino M. Roque for respondents.

RELOVA, J.:+.wph!1 Private respondent Benito Go Bio, Jr. was charged with violation of Batas Pambansa Bilang 22 in Criminal Case No. 5396 in the then

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Bilang 22 because it was not yet released for circulation at the time. We uphold the dismissal by the respondent judge of the criminal action against the private respondent. The Solicitor General admitted the certification issued by Ms. Charito A. Mangubat, Copy Editor of the Official Gazette Section of the Government Printing Office, stating-t.hqw This is to certify that Volume 75, No. 15, of the April 9, 1979 issue of the Official Gazette was officially released for circulation on June 14, 1979. (p. 138, Rollo) It is therefore, certain that the penal statute in question was made public only on June 14, 1979 and not on the printed date April 9, 1979. Differently stated, June 14, 1979 was the date of publication of Batas Pambansa Bilang 22. Before the public may be bound by its contents especially its penal provisions, the law must be published and the people officially informed of its contents and/or its penalties. For, if a statute had not been published before its violation, then in the eyes of the law there was no such law to be violated and, consequently, the accused could not have committed the alleged crime. The effectivity clause of Batas Pambansa Bilang 22 specifically states that "This Act shall take effect fifteen days after publication in the Official Gazette." The term "publication" in such clause should be given the ordinary accepted meaning, that is, to make known to the people in general. If the Batasang Pambansa had intended to make the printed date of issue of the Gazette as the point of reference in determining the effectivity of the statute in question, then it could have so stated in the special effectivity provision of Batas Pambansa Bilang 22. When private respondent Go Bio, Jr. committed the act, complained of in the Information as criminal, in May 1979, there was then no law penalizing such act. Following the special provision of Batas Pambansa Bilang 22, it became effective only on June 29, 1979. As a matter of fact, in May 1979, there was no law to be violated and, consequently, respondent Go Bio, Jr. did not commit any violation thereof. With respect to the allegation of petitioner that the offense was committed on September 26, 1979 when the check was presented for encashment and was dishonored by the bank, suffice it to say that the law penalizes the act of making or drawing and issuance of a bouncing check and not only the fact of its dishonor. The title of the law itself states: AN ACT PENALIZING THE MAKING OR DRAWING AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT FUNDS OR CREDIT AND FOR OTHER PURPOSES. and, Sections 1 and 2 of said Batas Pambansa Bilang 22 provide: t. hqw SECTION 1. Checks without sufficient funds. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds ... shall be punished ... The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. xxx xxx xxx SECTION 2. Evidence of knowledge of insufficient funds. The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds ... . (Emphasis supplied) ACCORDINGLY, the order of respondent judge dated August 23, 1982 is hereby AFFIRMED. No costs. SO ORDERED.

GMA NETWORK, INC., Petitioner, vs.MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, Respondent. DECISION CORONA, J.: Subject of this petition for review under Rule 45 of the Rules of Court is the June 18, 2001 decision1 of the Court of Appeals (CA) affirming the January 7, 2000 order2 of respondent Movie and Television Review and Classification Board (MTRCB) which read: In view thereof, the BOARD, by the undersigned, hereby imposes the administrative penalty of SUSPENSION FROM AIRING/BROADCASTING any program on EMC Channel 27 for a period of seven (7) days which period shall commence immediately upon receipt of this Order. Your failure to comply with this ORDER shall be construed by the BOARD as defiance on your part of a lawful order of the BOARD. The facts follow. Petitioner GMA Network, Inc. operates and manages the UHF television station, EMC Channel 27. On January 7, 2000, respondent MTRCB issued an order of suspension against petitioner for airing "Muro Ami: The Making" without first securing a permit from it as provided in Section 7 of PD 1986.3 The penalty of suspension was based on Memorandum Circular 98-17 dated December 15, 19984 which provided for the penalties for exhibiting a program without a valid permit from the MTRCB. Petitioner moved for reconsideration of the suspension order and, at the same time, informed MTRCB that Channel 27 had complied with the suspension order by going off the air since midnight of January 11, 2000. It also filed a letter-protest which was merely "noted" by the MTRCB thereby, in effect, denying both the motion for reconsideration and letter-protest. Petitioner then filed with the CA a petition for certiorari which was dismissed in the now assailed June 18, 2001 decision. The January 7, 2000 suspension order issued by MTRCB was affirmed in toto. Hence, this recourse. The pivotal issues for our resolution are: (1) whether the MTRCB has the power or authority to review the show "Muro Ami: The Making" prior to its broadcast by television and (2) whether Memorandum Circular No. 98-17 was enforceable and binding on petitioner. First, Section 3 of PD 1986 5 empowers the MTRCB to screen, review and examine all motion pictures, television programs including publicity materials. This power of prior review is highlighted in its Rules and Regulations, particularly Section 7 thereof, which reads: SECTION 7. REQUIREMENT OF PRIOR REVIEW. -- No motion picture, television program or related publicity material shall be imported, exported, produced, copied, distributed, sold, leased, exhibited or broadcasted by television without prior permit issued by the BOARD after review of the motion picture, television program or publicity material. The only exemptions from the MTRCBs power of review are those expressly mentioned in Section 7,6 such as (1) television programs imprinted or exhibited by the Philippine Government and/or departments and agencies, and (2) newsreels. According to the CA, the subject program was a publicity for the movie, "Muro Ami." In adopting this finding, we hold that "Muro Ami: The Making," did not fall under any of the exemptions and was therefore within the power of review of MTRCB. On the other hand, petitioner claims that "Muro Ami: The Making" was a public affairs program.7 Even if that were so, our resolution of this issue would not change. This Court has already ruled that a public affairs program -- described as a variety of news treatment; a cross between pure television news and news-related commentaries, analysis and/or exchange of opinions -- is within the MTRCBs power of review.8 Clearly, "Muro Ami: The Making" (which petitioner claims to be a public affairs program) was well within the purview of MTRCBs

G.R. No. 148579

February 5, 2007

66

power of prior review.1awphi1.net However, while MTRCB had jurisdiction over the subject program, Memorandum Circular 98-17, which was the basis of the suspension order, was not binding on petitioner. The Administrative Code of 1987, particularly Section 3 thereof, expressly requires each agency to file with the Office of the National Administrative Register (ONAR) of the University of the Philippines Law Center three certified copies of every rule adopted by it. Administrative issuances which are not published or filed with the ONAR are ineffective and may not be enforced.9 Memorandum Circular No. 98-17, which provides for the penalties for the first, second and third offenses for exhibiting programs without valid permit to exhibit, has not been registered with the ONAR as of January 27, 2000.10 Hence, the same is yet to be effective.11 It is thus unenforceable since it has not been filed in the ONAR. 12 Consequently, petitioner was not bound by said circular and should not have been meted the sanction provided thereunder. WHEREFORE, the instant petition is PARTIALLY GRANTED. The decision of the Court of Appeals dated June 18, 2001, insofar as it affirmed the public respondent Movie and Television Review and Classification Boards jurisdiction over "Muro Ami: The Making," is hereby AFFIRMED with the MODIFICATION that the suspension order issued against petitioner GMA Network, Inc. pursuant to Memorandum Circular No. 98-17 is hereby declared null and void. No pronouncement as to costs. SO ORDERED.

part of tax- payers if they are required to pay the tax on past transactions, and so as to give meaning to the express provisions of Section 246 of the Tax Code, pawnshop owners or operators shall become liable to the lending investors tax on their gross income beginning January 1, 1991. Since the deadline for the filing of percentage tax return (BIR Form No. 2529A-0) and the payment of the tax on lending investors covering the first calendar quarter of 1991 has already lapsed, taxpayers are given up to June 30, 1991 within which to pay the said tax without penalty. If the tax is paid after June 30, 1991, the corresponding penalties shall be assessed and computed from April 21, 1991. Since pawnshops are considered as lending investors effective January 1, 1991, they also become subject to documentary stamp taxes prescribed in Title VII of the Tax Code. BIR Ruling No. 325-88 dated July 13, 1988 is hereby revoked. On 11 September 1997, pursuant to these issuances, the Bureau of Internal Revenue (BIR) issued Assessment Notice No. 81-PT-13-9497-9-118 against Lhuillier demanding payment of deficiency percentage tax in the sum of P3,360,335.11 for 1994 inclusive of interest and surcharges. On 3 October 1997, Lhuillier filed an administrative protest with the Office of the Revenue Regional Director contending that (1) neither the Tax Code nor the VAT Law expressly imposes 5% percentage tax on the gross income of pawnshops; (2) pawnshops are different from lending investors, which are subject to the 5% percentage tax under the specific provision of the Tax Code; (3) RMO No. 15-91 is not implementing any provision of the Internal Revenue laws but is a new and additional tax measure on pawnshops, which only Congress could enact; (4) RMO No. 15-91 impliedly amends the Tax Code and is therefore taxation by implication, which is proscribed by law; and (5) RMO No. 15-91 is a "class legislation" because it singles out pawnshops among other lending and financial operations. On 12 October 1998, Deputy BIR Commissioner Romeo S. Panganiban issued Warrant of Distraint and/or Levy No. 81-043-98 against Lhuilliers property for the enforcement and payment of the assessed percentage tax. Its protest having been unacted upon, Lhuillier, in a letter dated 3 March 1998, elevated the matter to the CIR. Still, the protest was not acted upon by the CIR. Thus, on 11 November 1998, Lhuillier filed a "Notice and Memorandum on Appeal" with the Court of Tax Appeals invoking Section 228 of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, which provides: Section 228. Protesting of Assessment. If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable. The case was docketed as CTA Case No. 5690. On 19 November 1998, the CIR filed with the CTA a motion to dismiss Lhuilliers petition on the ground that it did not state a cause of action, as there was no action yet on the protest. Lhuillier opposed the motion to dismiss and moved for the issuance of a writ of preliminary injunction praying that the BIR be enjoined from enforcing the warrant of distraint and levy. For Lhuilliers failure to appear on the scheduled date of hearing, the CTA denied the motion for the issuance of a writ of preliminary injunction. However, on Lhuilliers motion for reconsideration, said denial was set aside and a hearing on the motion for the issuance of a writ of preliminary injunction was set. On 30 June 1999, after due hearing, the CTA denied the CIRs motion to dismiss and granted Lhuilliers motion for the issuance of a writ of preliminary injunction. On 13 December 2000, the CTA rendered a decision declaring (1) RMO No. 15-91 and RMC No. 43-91 null and void insofar as they classify pawnshops as lending investors subject to 5% percentage tax; and (2) Assessment Notice No. 81-PT-13-94-97-9-118 as cancelled,

G.R. No. 150947

July 15, 2003

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs.MICHEL J. LHUILLIER PAWNSHOP, INC., respondent. DAVIDE, JR., C.J.: Are pawnshops included in the term lending investors for the purpose of imposing the 5% percentage tax under then Section 116 of the National Internal Revenue Code (NIRC) of 1977, as amended by Executive Order No. 273? Petitioner Commissioner of Internal Revenue (CIR) filed the instant petition for review to set aside the decision 1 of 20 November 2001 of the Court of Appeals in CA G.R. SP No. 62463, which affirmed the decision of 13 December 2000 of the Court of Tax Appeals (CTA) in CTA Case No. 5690 cancelling the assessment issued against respondent Michel J. Lhuillier Pawnshop, Inc. (hereafter Lhuillier) in the amount of P3,360,335.11 as deficiency percentage tax for 1994, inclusive of interest and surcharges. The facts are as follows: On 11 March 1991, CIR Jose U. Ong issued Revenue Memorandum Order (RMO) No. 15-91 imposing a 5% lending investors tax on pawnshops; thus: A restudy of P.D. [No.] 114 shows that the principal activity of pawnshops is lending money at interest and incidentally accepting a "pawn" of personal property delivered by the pawner to the pawnee as security for the loan.(Sec. 3, Ibid). Clearly, this makes pawnshop business akin to lending investors business activity which is broad enough to encompass the business of lending money at interest by any person whether natural or juridical. Such being the case, pawnshops shall be subject to the 5% lending investors tax based on their gross income pursuant to Section 116 of the Tax Code, as amended. This RMO was clarified by Revenue Memorandum Circular (RMC) No. 43-91 on 27 May 1991, which reads: 1. RM[O] 15-91 dated March 11, 1991. This Circular subjects to the 5% lending investors tax the gross income of pawnshops pursuant to Section 116 of the Tax Code, and it thus revokes BIR Ruling No[]. 6-90, and VAT Ruling Nos. 22-90 and 67-90. In order to have a uniform cut-off date, avoid unfairness on the

67

withdrawn, and with no force and effect.2 Dissatisfied, the CIR filed a petition for review with the Court of Appeals praying that the aforesaid decision be reversed and set aside and another one be rendered ordering Lhuillier to pay the 5% lending investors tax for 1994 with interests and surcharges. Upon due consideration of the issues presented by the parties in their respective memoranda, the Court of Appeals affirmed the CTA decision on 20 November 2001. The CIR is now before this Court via this petition for review on certiorari, alleging that the Court of Appeals erred in holding that pawnshops are not subject to the 5% lending investors tax. He invokes then Section 116 of the Tax Code, which imposed a 5% percentage tax on lending investors. He argues that the legal definition of lending investors provided in Section 157 (u) of the Tax Code is broad enough to include pawnshop operators. Section 3 of Presidential Decree No. 114 states that the principal business activity of a pawnshop is lending money; thus, a pawnshop easily falls under the legal definition of lending investors. RMO No. 15-91 and RMC No. 4391, which subject pawnshops to the 5% lending investors tax based on their gross income, are valid. Being mere interpretations of the NIRC, they need not be published. Lastly, the CIR invokes the case of Commissioner of Internal Revenue vs. Agencia Exquisite of Bohol, Inc.,3 where the Court of Appeals Special Fourteenth Division ruled that a pawnshop is subject to the 5% lending investors tax.4 Lhuillier, on the other hand, maintains that before and after the amendment of the Tax Code by E.O. No. 273, which took effect on 1 January 1988, pawnshops and lending investors were subjected to different tax treatments. Pawnshops were required to pay an annual fixed tax of only P1,000, while lending investors were subject to a 5% percentage tax on their gross income in addition to their fixed annual taxes. Accordingly, during the period from April 1982 up to December 1990, the CIR consistently ruled that a pawnshop is not a lending investor and should not therefore be required to pay percentage tax on its gross income. Lhuillier likewise asserts that RMO No. 15-91 and RMC No. 43-91 are not implementing rules but are new and additional tax measures, which only Congress is empowered to enact. Besides, they are invalid because they have never been published in the Official Gazette or any newspaper of general circulation. Lhuillier further points out that pawnshops are strictly regulated by the Central Bank pursuant to P.D. No. 114, otherwise known as The Pawnshop Regulation Act. On the other hand, there is no special law governing lending investors. Due to the wide differences between the two, pawnshops had never been considered as lending investors for tax purposes. In fact, in 1994, Congress passed House Bill No. 11197, 5 which attempted to amend Section 116 of the NIRC, as amended, to include owners of pawnshops as among those subject to percentage tax. However, the Senate Bill and the subsequent Bicameral Committee version, which eventually became the E-VAT Law, did not incorporate such proposed amendment. Lastly, Lhuillier argues that following the maxim in statutory construction "expressio unius est exclusio alterius," it was not the intention of the Legislature to impose percentage taxes on pawnshops because if it were so, pawnshops would have been included as among the businesses subject to the said tax. Inasmuch as revenue laws impose special burdens upon taxpayers, the enforcement of such laws should not be extended by implication beyond the clear import of the language used. We are therefore called upon to resolve the issue of whether pawnshops are subject to the 5% lending investors tax. Corollary to this issue are the following questions: (1) Are RMO No. 15-91 and RMC No. 43-91 valid? (2) Were they issued to implement Section 116 of the NIRC of 1977, as amended? (3) Are pawnshops considered "lending investors" for the purpose of the imposition of the lending investors tax? (4) Is publication necessary for the validity of RMO No. 15-91 and RMC No. 43-91. RMO No. 15-91 and RMC No. 43-91 were issued in accordance with the power of the CIR to make rulings and opinions in connection with the implementation of internal revenue laws, which was bestowed by then Section 245 of the NIRC of 1977, as amended by E.O. No. 273. 6

Such power of the CIR cannot be controverted. However, the CIR cannot, in the exercise of such power, issue administrative rulings or circulars not consistent with the law sought to be applied. Indeed, administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out. Only Congress can repeal or amend the law.7 The CIR argues that both issuances are mere rules and regulations implementing then Section 116 of the NIRC, as amended, which provided: SEC. 116. Percentage tax on dealers in securities; lending investors. - Dealers in securities and lending investors shall pay a tax equivalent to six (6) per centum of their gross income. Lending investors shall pay a tax equivalent to five (5%) percent of their gross income. It is clear from the aforequoted provision that pawnshops are not specifically included. Thus, the question is whether pawnshops are considered lending investors for the purpose of imposing percentage tax. We rule in the negative. Incidentally, we observe that both parties, as well as the Court of Tax Appeals and the Court of Appeals, refer to the National Internal Revenue Code as the Tax Code. They did not specify whether the provisions they cited were taken from the NIRC of 1977, as amended, or the NIRC of 1986, as amended. For clarity, it must be pointed out that the NIRC of 1977 as renumbered and rearranged by E.O. No. 273 is a later law than the NIRC of 1986, as amended by P.D. Nos. 1991, 1994, 2006 and 2031. The citation of the specific Code is important for us to determine the intent of the law. Under Section 157(u) of the NIRC of 1986, as amended, the term lending investor includes "all persons who make a practice of lending money for themselves or others at interest." A pawnshop, on the other hand, is defined under Section 3 of P.D. No. 114 as "a person or entity engaged in the business of lending money on personal property delivered as security for loans and shall be synonymous, and may be used interchangeably, with pawnbroker or pawn brokerage." While it is true that pawnshops are engaged in the business of lending money, they are not considered "lending investors" for the purpose of imposing the 5% percentage taxes for the following reasons: First. Under Section 192, paragraph 3, sub-paragraphs (dd) and (ff), of the NIRC of 1977, prior to its amendment by E.O. No. 273, as well as Section 161, paragraph 2, sub-paragraphs (dd) and (ff), of the NIRC of 1986, pawnshops and lending investors were subjected to different tax treatments; thus: (3) Other Fixed Taxes. The following fixed taxes shall be collected as follows, the amount stated being for the whole year, when not otherwise specified: . (dd) Lending investors 1. In chartered cities and first class municipalities, one thousand pesos; 2. In second and third class municipalities, five hundred pesos; 3. In fourth and fifth class municipalities and municipal districts, two hundred fifty pesos: Provided, That lending investors who do business as such in more than one province shall pay a tax of one thousand pesos. . (ff) Pawnshops, one thousand pesos (underscoring ours) Second. Congress never intended pawnshops to be treated in the same way as lending investors. Section 116 of the NIRC of 1977, as renumbered and rearranged by E.O. No. 273, was basically lifted from Section 1758 of the NIRC of 1986, which treated both tax subjects differently. Section 175 of the latter Code read as follows: Sec. 175. Percentage tax on dealers in securities, lending investors. -- Dealers in securities shall pay a tax equivalent to six (6%) percent of their gross income. Lending investors shall pay a tax equivalent to five (5%) percent of their gross income. (As amended by P.D. No. 1739,

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P.D. No. 1959 and P.D. No. 1994). We note that the definition of lending investors found in Section 157 (u) of the NIRC of 1986 is not found in the NIRC of 1977, as amended by E.O. No. 273, where Section 116 invoked by the CIR is found. However, as emphasized earlier, both the NIRC of 1986 and the NIRC of 1977 dealt with pawnshops and lending investors differently. Verily then, it was the intent of Congress to deal with both subjects differently. Hence, we must likewise interpret the statute to conform with such legislative intent. Third. Section 116 of the NIRC of 1977, as amended by E.O. No. 273, subjects to percentage tax dealers in securities and lending investors only. There is no mention of pawnshops. Under the maxim expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must necessarily and by implication be excluded from its operation and effect.9 This rule, as a guide to probable legislative intent, is based upon the rules of logic and natural workings of the human mind.10 Fourth. The BIR had ruled several times prior to the issuance of RMO No. 15-91 and RMC 43-91 that pawnshops were not subject to the 5% percentage tax imposed by Section 116 of the NIRC of 1977, as amended by E.O. No. 273. This was even admitted by the CIR in RMO No. 15-91 itself. Considering that Section 116 of the NIRC of 1977, as amended, was practically lifted from Section 175 of the NIRC of 1986, as amended, and there being no change in the law, the interpretation thereof should not have been altered. It may not be amiss to state that, as pointed out by the respondent, pawnshops was sought to be included as among those subject to 5% percentage tax by House Bill No. 11197 in 1994. Section 13 thereof reads: Section 13. Section 116 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 116. Percentage tax on dealers in securities; lending investors; OWNERS OF PAWNSHOPS; FOREIGN CURRENCY DEALERS AND/OR MONEY CHANGERS. Dealers in securities shall pay a tax equivalent to Six (6%) per centum of their gross income. Lending investors, OWNERS OF PAWNSHOPS AND FOREIGN CURRENCY DEALERS AND/OR MONEY CHANGERS shall pay a tax equivalent to Five (5%) percent of their gross income." If pawnshops were covered within the term lending investor, there would have been no need to introduce such amendment to include owners of pawnshops. At any rate, such proposed amendment was not adopted. Instead, the approved bill which became R.A. No. 7716 11 repealed Section 116 of NIRC of 1977, as amended, which was the basis of RMO No. 15-91 and RMC No. 43-91; thus: SEC. 20. Repealing Clauses. -- The provisions of any special law relative to the rate of franchise taxes are hereby expressly repealed. Sections 113, 114 and 116 of the National Internal Revenue Code are hereby repealed. Section 21 of the same law provides that the law shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation whichever comes earlier. R.A. No. 7716 was published in the Official Gazette on 1 August 199412; in the Journal and Malaya newspapers, on 12 May 1994; and in the Manila Bulletin, on 5 June 1994. Thus, R.A. No. 7716 is deemed effective on 27 May 1994. Since Section 116 of the NIRC of 1977, which breathed life on the questioned administrative issuances, had already been repealed, RMO 15-91 and RMC 43-91, which depended upon it, are deemed automatically repealed. Hence, even granting that pawnshops are included within the term lending investors, the assessment from 27 May 1994 onward would have no leg to stand on. Adding to the invalidity of the RMC No. 43-91 and RMO No. 15-91 is the absence of publication. While the rule-making authority of the CIR is not doubted, like any other government agency, the CIR may not disregard legal requirements or applicable principles in the exercise of quasi-legislative powers. Let us first distinguish between two kinds of administrative issuances:

the legislative rule and the interpretative rule. A legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by providing the details thereof. An interpretative rule, on the other hand, is designed to provide guidelines to the law which the administrative agency is in charge of enforcing.13 In Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance Secretary,14 this Tribunal ruled: In the same way that laws must have the benefit of public hearing, it is generally required that before a legislative rule is adopted there must be hearing. In this connection, the Administrative Code of 1987 provides: Public Participation. - If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. (2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two weeks before the first hearing thereon. (3) In case of opposition, the rules on contested cases shall be observed. In addition, such rule must be published. When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law.15 RMO No. 15-91 and RMC No. 43-91 cannot be viewed simply as implementing rules or corrective measures revoking in the process the previous rulings of past Commissioners. Specifically, they would have been amendatory provisions applicable to pawnshops. Without these disputed CIR issuances, pawnshops would not be liable to pay the 5% percentage tax, considering that they were not specifically included in Section 116 of the NIRC of 1977, as amended. In so doing, the CIR did not simply interpret the law. The due observance of the requirements of notice, hearing, and publication should not have been ignored. There is no need for us to discuss the ruling in CA-G.R. SP No. 59282 entitled Commissioner of Internal Revenue v. Agencia Exquisite of Bohol Inc., which upheld the validity of RMO No. 15-91 and RMC No. 43-91. Suffice it to say that the judgment in that case cannot be binding upon the Supreme Court because it is only a decision of the Court of Appeals. The Supreme Court, by tradition and in our system of judicial administration, has the last word on what the law is; it is the final arbiter of any justifiable controversy. There is only one Supreme Court from whose decisions all other courts should take their bearings. 16 In view of the foregoing, RMO No. 15-91 and RMC No. 43-91 are hereby declared null and void. Consequently, Lhuillier is not liable to pay the 5% lending investors tax. WHEREFORE, the petition is hereby DISMISSED for lack of merit. The decision of the Court of Appeals of 20 November 2001 in CA-G.R. SP No. 62463 is AFFIRMED. SO ORDERED.

G.R. No. L-59234 September 30, 1982 TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners, vs.THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION, respondents.

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MELENCIO-HERRERA, J.: This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the Bureau of Land Transportation. Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being an operator and grantee of such certificate of public convenience. On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads: SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as public conveyances; WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and condemned, the continued operation of old and dilapidated taxis; WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a program of phasing out of old and dilapidated taxis should be adopted; WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable profit for his investments; NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall be operated as taxi, and in implementation of the same hereby promulgates the following rules and regulations: 1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for operation; 2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and every year thereafter, there shall be a six-year lifetime of taxi, to wit: 1980 Model 1974 1981 Model 1975, etc. All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission. For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the project has been implemented in Metro-Manila and only after the date has been determined by the Board. 1 Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. To quote said Circular:

Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now banned from operating as public utilities in Metro Manila. As such the units involved should be considered as automatically dropped as public utilities and, therefore, do not require any further dropping order from the BOT. Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all concerned:

Year Model

Automatic Phase-Out Ye

1980

1974

1981

1975

1982

1976

1983

1977

etc.

etc.

Strict compliance here is desired. 2 In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981. On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are roadworthy and fit for operation. On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence, offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and Submission of the Case for Resolution." 3 On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model cabs are phased-out on January 1, 1982. Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of the case could not be located. On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by this Court:

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A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due process? B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to. (1) Equal protection of the law; (2) Substantive due process; and (3) Protection against arbitrary and unreasonable classification and standard? On Procedural and Substantive Due Process: Presidential Decree No. 101 grants to the Board of Transportation the power 4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles. Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers: Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry. Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree. The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry. In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular. It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972): Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied) Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which

they are subjected, and, therefore, their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met. On Equal Protection of the Law: Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion: For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and only after the date has been determined by the Board. 4 In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities. The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed. As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7 In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria. Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable. 10 WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs. SO ORDERED.

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G.R. No. 102653 March 5, 1992 NATIONAL PRESS CLUB, petitioner, vs.COMMISSION ON ELECTIONS, respondent. G.R. No. 102925 March 5, 1992 PHILIPPINE PRESS INSTITUTE represented by ZOILO DEJARESCO, JR., as its Past Chairman and President, and FRAULIN A. PEASALES as its Corporate Secretary, petitioners, vs.COMMISSION ON ELECTIONS, represented by HON. CHRISTIAN MONSOD, its Chairman; HON. GUILLERMO CARAGUE and HON. ROSALINA S. CAJUCOM, respondents. G.R. No. 102983 March 5, 1992 KAPISANAN NG MGA BRODKASTERS SA PILIPINAS; MAKATI BROADCASTING NETWORK; MOLAVE BROADCASTING NETWORK; MASBATE COMMUNITY BROADCASTING CO., INC., RADIO MINDANAO NETWORK, INC.; ABS-CBN BROADCASTING CORP.; FILIPINAS BROADCASTING; RADIO PILIPINO CORP.; RADIO PHILIPPINES NETWORK, INC.; EAGLE BROADCASTING CORP.; MAGILIW COMMUNITY BROADCASTING CO., INC.; for themselves and in behalf of the mass media owners as a class; ANDRE S. KHAN; ARCADIO M. CARANDANG, JR.; MALOU ESPINOSA MANALASTAS; MIGUEL C. ENRIQUEZ; JOSE ANTONIO K. VELOSO; DIANA G. DE GUZMAN; JOSE E. ESCANER, JR.; RAY G. PEDROCHE; PETER A. LAGUSAY; ROBERT ESTRELLA; ROLANDO RAMIREZ; for themselves as voters and in behalf of the Philippine electorate as a class; ORLANDO S. MERCADO and ALEJANDRO de G. RODRIGUEZ; for themselves as prospective candidates and in behalf of all candidates in the May 1992 election as a class, petitioners, vs. COMMISSION ON ELECTIONS, respondent. FELICIANO, J.: In the three (3) consolidated Petitions before us, the common question raised by petitioners is the constitutionality of Section 11 (b) of Republic Act No. 6646. Petitioners in these cases consist of representatives of the mass media which are prevented from selling or donating space and time for political advertisements; two (2) individuals who are candidates for office (one for national and the other for provincial office) in the coming May 1992 elections; and taxpayers and voters who claim that their right to be informed of election issues and of credentials of the candidates is being curtailed. It is principally argued by petitioners that Section 11 (b) of Republic Act No. 6646 invades and violates the constitutional guarantees comprising freedom of expression. Petitioners maintain that the prohibition imposed by Section 11 (b) amounts to censorship, because it selects and singles out for suppression and repression with criminal sanctions, only publications of a particular content, namely, mediabased election or political propaganda during the election period of 1992. It is asserted that the prohibition is in derogation of media's role, function and duty to provide adequate channels of public information and public opinion relevant to election issues. Further, petitioners contend that Section 11 (b) abridges the freedom of speech of candidates, and that the suppression of media-based campaign or political propaganda except those appearing in the Comelec space of the newspapers and on Comelec time of radio and television broadcasts, would bring about a substantial reduction in the quantity or volume of information concerning candidates and issues in the election thereby curtailing and limiting the right of voters to information and opinion. The statutory text that petitioners ask us to strike down as unconstitutional is that of Section 11 (b) of Republic Act No. 6646, known as the Electoral Reforms Law of 1987: Sec. 11 Prohibited Forms of Election Propaganda. In addition to the forms of election propaganda prohibited under Section 85 of Batas Pambansa Blg. 881, it shall be unlawful; xxx xxx xxx

b) for any newspapers, radio broadcasting or television station, other mass media, or any person making use of the mass media to sell or to give free of charge print space or air time for campaign or other political purposes except to the Commission as provided under Sections 90 and 92 of Batas Pambansa Blg. 881. Any mass media columnist, commentator, announcer or personality who is a candidate for any elective public office shall take a leave of absence from his work as such during the campaign period. (Emphasis supplied) Section 11 (b) of Republic Act No. 6646 should be taken together with Sections 90 and 92 of B.P. Blg. 881, known as the Omnibus Election Code of the Philippines, which provide respectively as follows: Sec. 90. Comelec space. The Commission shall procure space in at least one newspaper of general circulation in every province or city: Provided, however, That in the absence of said newspaper, publication shall be done in any other magazine or periodical in said province or city, which shall be known as "Comelec Space" wherein candidates can announce their candidacy. Said space shall be allocated, free of charge, equally and impartially by the Commission among all candidates within the area in which the newspaper is circulated. xxx xxx xxx Sec. 92. Comelec time. The Commission shall procure radio and television time to be known as "Comelec Time" which shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television stations. For this purpose, the franchise of all radio broadcasting and television stations are hereby amended so as to provide radio or television time, free of charge, during the period of the campaign. (Emphasis supplied) The objective which animates Section 11 (b) is the equalizing, as far as practicable, the situations of rich and poor candidates by preventing the former from enjoying the undue advantage offered by huge campaign "war chests." Section 11 (b) prohibits the sale or donation of print space and air time "for campaign or other political purposes" except to the Commission on Elections ("Comelec"). Upon the other hand, Sections 90 and 92 of the Omnibus Election Code require the Comelec to procure "Comelec space" in newspapers of general circulation in every province or city and "Comelec time" on radio and television stations. Further, the Comelec is statutorily commanded to allocate "Comelec space" and "Comelec time" on a free of charge, equal and impartial basis among all candidates within the area served by the newspaper or radio and television station involved. No one seriously disputes the legitimacy or the importance of the objective sought to be secured by Section 11 (b) (of Republic Act No. 6646) in relation to Sections 90 and 92 (of the Omnibus Election Code). That objective is of special importance and urgency in a country which, like ours, is characterized by extreme disparity in income distribution between the economic elite and the rest of society, and by the prevalence of poverty, with the bulk of our population falling below that "poverty line." It is supremely important, however, to note that objective is not only a concededly legitimate one; it has also been given constitutional status by the terms of Article IX(C) (4) of the 1987 Constitution which provides as follows: Sec. 4. The Commission [on Elections] may, during the election period, supervise or regulate the enjoyment or utilization of all franchises or permits for the operation of transportation and other public utilities, media of communication or information , all grants, special privileges, or concessions granted by the Government or any subdivision, agency, or instrumentality thereof, including any government-owned or controlled corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal opportunity, time, and space, and the right to reply, including reasonable, equal rates therefor, for public information campaigns and forums among candidates in connection with the objective of holding free, orderly, honest, peaceful, and credible elections. (Emphasis supplied) The Comelec has thus been expressly authorized by the Constitution to supervise or regulate the enjoyment or utilization of the franchises or permits for the operation of media of communication and information. The fundamental purpose of such "supervision or regulation" has been spelled out in the Constitution as the ensuring of "equal opportunity, time, and space, and the right to reply," as well as uniform and reasonable rates of charges for the use of such media facilities, in connection with "public information campaigns and forums among

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candidates." 1 It seems a modest proposition that the provision of the Bill of Rights which enshrines freedom of speech, freedom of expression and freedom of the press (Article III [4], Constitution) has to be taken in conjunction with Article IX (C) (4) which may be seen to be a special provision applicable during a specific limited period i.e., "during the election period." It is difficult to overemphasize the special importance of the rights of freedom of speech and freedom of the press in a democratic polity, in particular when they relate to the purity and integrity of the electoral process itself, the process by which the people identify those who shall have governance over them. Thus, it is frequently said that these rights are accorded a preferred status in our constitutional hierarchy. Withal, the rights of free speech and free press are not unlimited rights for they are not the only important and relevant values even in the most democratic of polities. In our own society, equality of opportunity to proffer oneself for public office, without regard to the level of financial resources that one may have at one's disposal, is clearly an important value. One of the basic state policies given constitutional rank by Article II, Section 26 of the Constitution is the egalitarian demand that "the State shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law." 2 The technical effect of Article IX (C) (4) of the Constitution may be seen to be that no presumption of invalidity arises in respect of exercises of supervisory or regulatory authority on the part of the Comelec for the purpose of securing equal opportunity among candidates for political office, although such supervision or regulation may result in some limitation of the rights of free speech and free press. For supervision or regulation of the operations of media enterprises is scarcely conceivable without such accompanying limitation. Thus, the applicable rule is the general, time-honored one that a statute is presumed to be constitutional and that the party asserting its unconstitutionality must discharge the burden of clearly and convincingly proving that assertion. 3 Put in slightly different terms, there appears no present necessity to fall back upon basic principles relating to the police power of the State and the requisites for constitutionally valid exercise of that power. The essential question is whether or not the assailed legislative or administrative provisions constitute a permissible exercise of the power of supervision or regulation of the operations of communication and information enterprises during an election period, or whether such act has gone beyond permissible supervision or regulation of media operations so as to constitute unconstitutional repression of freedom of speech and freedom of the press. The Court considers that Section 11 (b) has not gone outside the permissible bounds of supervision or regulation of media operations during election periods. In the constitutional assaying of legislative provisions like Section 11 (b), the character and extent of the limitations resulting from the particular measure being assayed upon freedom of speech and freedom of the press are essential considerations. It is important to note that the restrictive impact upon freedom of speech and freedom of the press of Section 11 (b) is circumscribed by certain important limitations. Firstly, Section 11 (b) is limited in the duration of its applicability and enforceability. By virtue of the operation of Article IX (C) (4) of the Constitution, Section 11 (b) is limited in its applicability in time to election periods. By its Resolution No. 2328 dated 2 January 1992, the Comelec, acting under another specific grant of authority by the Constitution (Article IX [C] [9]), has defined the period from 12 January 1992 until 10 June 1992 as the relevant election period. Secondly, and more importantly, Section 11 (b) is limited in its scope of application. Analysis of Section 11 (b) shows that it purports to apply only to the purchase and sale, including purchase and sale disguised as a donation, 4 of print space and air time for "campaign or other political purposes." Section 11 (b) does not purport in any way to restrict the reporting by newspapers or radio or television stations of news or news-worthy events relating to candidates, their qualifications, political parties and programs of government. Moreover, Section 11 (b) does not reach commentaries and expressions of belief or opinion by reporters or broadcasters or editors or commentators or columnists in respect of candidates, their qualifications, and programs and so forth, so long at least as such comments, opinions and beliefs are not in fact

advertisements for particular candidates covertly paid for. In sum, Section 11 (b) is not to be read as reaching any report or commentary other coverage that, in responsible media, is not paid for by candidates for political office. We read Section 11 (b) as designed to cover only paid political advertisements of particular candidates. The above limitation in scope of application of Section 11 (b) that it does not restrict either the reporting of or the expression of belief or opinion or comment upon the qualifications and programs and activities of any and all candidates for office constitutes the critical distinction which must be made between the instant case and that of Sanidad v. Commission on Elections. 5 In Sanidad, the Court declared unconstitutional Section 19 of Comelec Resolution No. 2167 which provided as follows: Sec. 19. Prohibition on Columnists, Commentators or Announcers During the plebiscite campaign period, on the day before and on plebiscite day, no mass media columnist, commentator, announcer or personality shall use his column or radio or television time to campaign for or against the plebiscite issues. Resolution No. 2167 had been promulgated by the Comelec in connection with the plebiscite mandated by R.A. No. 6766 on the ratification or adoption of the Organic Act for the Cordillera Autonomous Region. The Court held that Resolution No. 2167 constituted a restriction of the freedom of expression of petitioner Sanidad, a newspaper columnist of the Baguio Midland Courier, "for no justifiable reason." The Court, through Medialdea, J., said: . . . [N]either Article, IX-C of the Constitution nor Section 11 [b], 2nd par. of R.A. 6646 can be construed to mean that the Comelec has also been granted the right to supervise and regulate the exercise by media practitioners themselves of their right to expression during plebiscite periods. Media practitioners exercising their freedom of expression during plebiscite periods are neither the franchise holders nor the candidates. In fact, there are no candidates involved in the plebiscite. Therefore, Section 19 of Comelec Resolution No. 2167 has no statutory basis." 6 (Emphasis partly in the original and partly supplied) There is a third limitation upon the scope of application of Section 11 (b). Section 11 (b) exempts from its prohibition the purchase by or donation to the Comelec of print space or air time, which space and time Comelec is then affirmatively required to allocate on a fair and equal basis, free of charge, among the individual candidates for elective public offices in the province or city served by the newspaper or radio or television station. Some of the petitioners are apparently apprehensive that Comelec might not allocate "Comelec time" or "Comelec space" on a fair and equal basis among the several candidates. Should such apprehensions materialize, candidates who are in fact prejudiced by unequal or unfair allocations effected by Comelec will have appropriate judicial remedies available, so long at least as this Court sits. Until such time, however, the Comelec is entitled to the benefit of the presumption that official duty will be or is being regularly carried out. It seems appropriate here to recall what Justice Laurel taught in Angara v. Electoral Commission 7 that the possibility of abuse is no argument against the concession of the power or authority involved, for there is no power or authority in human society that is not susceptible of being abused. Should it be objected that the Comelec might refrain from procuring "Comelec time" and "Comelec space," much the same considerations should be borne in mind. As earlier noted, the Comelec is commanded by statute to buy or "procure" "Comelec time" and "Comelec space" in mass media, and it must be presumed that Comelec will carry out that statutory duty in this connection, and if it does fail to do so, once again, the candidate or candidates who feel aggrieved have judicial remedies at their disposal. The points that may appropriately be underscored are that Section 11 (b) does not cut off the flow of media reporting, opinion or commentary about candidates, their qualifications and platforms and promises. Newspaper, radio broadcasting and television stations remain quite free to carry out their regular and normal information and communication operations. Section 11 (b) does not authorize any intervention and much less control on the part of Comelec in respect of the content of the normal operations of media, nor in respect of the content of political advertisements which the individual candidates are quite free to present within their respective allocated Comelec time and Comelec space. There is here no "officious functionary of [a] repressive government" dictating what events or ideas reporters,

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broadcasters, editors or commentators may talk or write about or display on TV screens. There is here no censorship, whether disguised or otherwise. What Section 11 (b), viewed in context, in fact does is to limit paid partisan political advertisements to for a other than modern mass media, and to "Comelec time" and "Comelec space" in such mass media. Section 11 (b) does, of course, limit the right of free speech and of access to mass media of the candidates themselves. The limitation, however, bears a clear and reasonable connection with the constitutional objective set out in Article IX(C) (4) and Article II (26) of the Constitution. For it is precisely in the unlimited purchase of print space and radio and television time that the resources of the financially affluent candidates are likely to make a crucial difference. Here lies the core problem of equalization of the situations of the candidates with deep pockets and the candidates with shallow or empty pockets that Article IX(C) (4) of the Constitution and Section 11 (b) seek to address. That the statutory mechanism which Section 11 (b) brings into operation is designed and may be expected to bring about or promote equal opportunity, and equal time and space, for political candidates to inform all and sundry about themselves, cannot be gainsaid. My learned brother in the Court Cruz, J. remonstrates, however, that "t[he] financial disparity among the candidates is a fact of life that cannot be corrected by legislation except only by the limitation of their respective expenses to a common maximum. The flaw in the prohibition under challenge is that while the rich candidate is barred from buying mass media coverage, it nevertheless allows him to spend his funds on other campaign activities also inaccessible to his strained rival." True enough Section 11 (b) does not, by itself or in conjunction with Sections 90 and 92 of the Omnibus Election Code, place political candidates on complete and perfect equality inter se without regard to their financial affluence or lack thereof. But a regulatory measure that is less than perfectly comprehensive or which does not completely obliterate the evil sought to be remedied, is not for that reason alone constitutionally infirm. The Constitution does not, as it cannot, exact perfection in governmental regulation. All it requires, in accepted doctrine, is that the regulatory measure under challenge bear a reasonable nexus with the constitutionally sanctioned objective. That the supervision or regulation of communication and information media is not, in itself, a forbidden modality is made clear by the Constitution itself in Article IX (C) (4). It is believed that, when so viewed, the limiting impact of Section 11 (b) upon the right to free speech of the candidates themselves may be seen to be not unduly repressive or unreasonable. For, once again, there is nothing in Section 11 (b) to prevent media reporting of and commentary on pronouncements, activities, written statements of the candidates themselves. All other fora remain accessible to candidates, even for political advertisements. The requisites of fairness and equal opportunity are, after all, designed to benefit the candidates themselves. Finally, the nature and characteristics of modern mass media, especially electronic media, cannot be totally disregarded. Realistically, the only limitation upon the free speech of candidates imposed is on the right of candidates to bombard the helpless electorate with paid advertisements commonly repeated in the mass media ad nauseam. Frequently, such repetitive political commercials when fed into the electronic media themselves constitute invasions of the privacy of the general electorate. It might be supposed that it is easy enough for a person at home simply to flick off his radio of television set. But it is rarely that simple. For the candidates with deep pockets may purchase radio or television time in many, if not all, the major stations or channels. Or they may directly or indirectly own or control the stations or channels themselves. The contemporary reality in the Philippines is that, in a very real sense, listeners and viewers constitute a "captive audience." 8 The paid political advertisement introjected into the electronic media and repeated with mind-deadening frequency, are commonly intended and crafted, not so much to inform and educate as to condition and manipulate, not so much to provoke rational and objective appraisal of candidates' qualifications or programs as to appeal to the nonintellective faculties of the captive and passive audience. The right of the general listening and viewing public to be free from such intrusions and their subliminal effects is at least as important as the right of candidates to advertise themselves through modern electronic media

and the right of media enterprises to maximize their revenues from the marketing of "packaged" candidates. WHEREFORE, the Petitions should be, as they are hereby, DISMISSED for lack of merit. No pronouncement as to costs. SO ORDERED.

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