PHILIPPINE CONSUMERS FOUNDATION,
INC., petitioner, and hearing before the said Department
vs.
THE SECRETARY OF EDUCATION,
CULTURE AND SPORTS, respondent.
FACTS:
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 that;
ALL 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.
DECS then, issued an Order
authorizing, the 15% to 20% increase in
school fees as recommended by the Task
Force. The petitioner sought a HELD:
reconsideration of the said Order, apparently
on the ground that the increases were too
high. Thereafter, the DECS issued D.O No.
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.
Thusthe 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 as much
as the petitioner was not given due notice
Order was issued. The petitioner argues that
while the DECS is authorized by law to
regulate school fees in educational
institutions, the power to regulate does not
always include the power to increase school
fees. The petitioner also 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.
ISSUE:
WON the fixing of school fees through
Department Order by DECS is a Valid
Delegation of Legislative power and WON
such Department Order violates the notice
and hearing of due process of law.
Power granted to the educational
department to regulate the educational
system includes the power to prescribe
school fees. In the absence of a statute
stating otherwise, this power include 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.
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. 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.
CIR vs. CA, CTA and FORTUNE TOBACCO
CORP.
G.R. No. 119761; August 29, 1996
FACTS:
Fortune Tobacco Corporation ("Fortune
Tobacco"), engaged in the manufacture of
different brands of cigarettes, registered
"Champion," "Hope," and "More" cigarettes.
BIR classified them as foreign brands since
they were listed in the World Tobacco
Directory as belonging to foreign companies.
However, Fortune changed the names of
'Hope' to 'Hope Luxury' and 'More' to
'Premium More,' thereby removing the said
brands from the foreign brand category.
A 45% Ad Valorem taxes were imposed on
these brands. Then Republic Act ("RA") No.
7654 was enacted 55% for locally
manufactured foreign brand while 45% for
locally manufactured brands. 2
days before the effectivity of RA 7654,
Revenue Memorandum Circular No. 37-93
("RMC 37-93"), was issued by the BIR saying
since there is no showing who the real
owner/s are of Champion, Hope and More, it
follows that the same shall be considered
locally manufactured foreign brand for
purposes of determining the ad
valorem tax - 55%. BIR sent via telefax a
copy of RMC 37-93 to Fortune Tobacco
addressed to no one in particular. Then
Fortune Tobacco received, by ordinary mail, a
certified xerox copy of RMC 37-93. CIR
assessed Fortune Tobacco for ad valorem tax
deficiency amounting to P9,598,334.00.
Fortune Tobacco filed a petition for review
with the CTA. CTA upheld the position of
Fortune. CA affirmed.
ISSUE:
WON it was necessary for BIR to follow the
legal requirements when it issued its RMC
HELD:
YES. CIR may not disregard legal
requirements in the exercise of its quasi-
legislative powers which publication, filing,
and prior hearing.
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.
BUT 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
increases the burden of those governed, the
agency must accord, at least to those
directly affected, a chance to be heard,
before that new issuance is given the force
and effect of law.
RMC 37-93 cannot be viewed simply 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 which subjects mentioned brands to
55% the BIR not simply interpreted the law;
verily, it legislated under its quasi-legislative
authority. The due observance of the
requirements of notice, of hearing, and of
publication should not have been then
ignored.
ERNESTO M. MACEDA, petitioner,
vs.
ENERGY REGULATORY BOARD, CALTEX
(Philippines), INC., PILIPINAS SHELL
PETROLEUM CORPORATION AND
PETRON CORPORATION, respondents
FACTS:
Upon the outbreak of the Persian Gulf
conflict, private respondents oil companies
filed with the ERB their respective
applications on oil price increases. The ERB
then, issued an order granting a provisional
increase of P1.42 per liter. Petitioner Maceda
filed a petition for Prohibition seeking to
nullify the provisional increase. The Trial
dismissed the petition, reaffirming ERB's
authority to grant provisional increase even
without prior hearing.
In the same order the ERB set the
applications for hearing with due notice to all
interested parties. Petitioner Maceda failed
to appear at said hearing as well as on the
second hearing.
To afford registered oppositors the
opportunity to cross-examine the witnesses,
the ERB set the continuation of the hearing.
This was postponed, on written notice of
petitioner Maceda. Then, 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 at the same
time requiring applicants to publish the
corresponding Notices of Public Hearing in
two newspapers of general circulation
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.
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.
ISSUE:
WON the ERB, as an administrative agency is
bound by the strict or technical rules of
evidence governing court proceedings.
HELD:
NO. 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. 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. 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 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.
HON. RENATO C. CORONA, et
al. petitioners, vs. UNITED
HARBOR PILOTS ASSOCIATION OF
THE PHILIPPINES and MANILA
PILOTS
ASSOCIATION, respondents.
FACTS:
In issuing Administrative Order No. 04-
92 (PPA-AO No. 04-92), limiting the term of
appointment of harbor pilots to one year
subject to yearly renewal or cancellation.
Respondents United Harbor Pilots Association
and the Manila Pilots Association questioned
PPA-AO No. 04-92 before the DOTC, but they
were informed by then DOTC Secretary Jesus
B. Garcia that the matter of reviewing,
recalling or annulling PPAs administrative
issuances lies exclusively with its Board of
Directors as its governing body. The OP
(Office of the President) issued an order
directing the PPA to hold in abeyance the
implementation of PPA-AO No. 04-92. In its
answer, the PPA countered that said
administrative order was issued in the
exercise of its administrative control and
supervision over harbor pilots and it was
intended to restore order in the ports and to
improve the quality of port services. Then,
the OP, through then Assistant Executive
Secretary for Legal Affairs Renato C. Corona,
dismissed the appeal/petition and lifted the
restraining order issued earlier. He concluded
that PPA-AO No. 04-92 applied to all harbor
pilots and, for all intents and purposes, was
not the act of Dayan, but of the PPA, which
was merely implementing Section 6 of P.D.
No. 857, mandating it to control, regulate
and supervise pilotage and conduct of pilots
in any port district. Consequently,
respondents filed a petition for certiorari,
prohibition and injunction with prayer for the
issuance of a temporary restraining order
and damages, before RTC of Manila. The Trial
Court rendered a judgment, declaring PPA
Administrative Order 04-92 and its
implementing Circulars and Orders as null
and void.
ISSUE:
WON PPA Administrative Order 04-92 and its
implementing Circulars and Orders are
Constitutional.
HELD:
NO. Said order is Unconstitutional. The Court
is convinced that PPA-AO No. 04-92 was
issued in stark disregard of respondents
right against deprivation of property without
due process of law. Consequently, the instant
petition must be denied. In order to fall
within the aegis of this provision (due
process), two conditions must concur,
namely, (1) That there is a deprivation and
(2) That such deprivation is done without
proper observance of due process. When one
speaks of due process of law, however, a
distinction must be made between matters
of procedure and matters of substance. In
essence, procedural due process refers to
the method or manner by which the law is
enforced, while substantive due process
requires that the law itself, not merely the
procedures by which the law would be
enforced, is fair, reasonable, and just. PPA-AO
No. 04-92 must be examined in light of this
distinction.
As a general rule, notice and hearing, as
the fundamental requirements of procedural
due process, are essential only when an
administrative body exercises its quasi-
judicial function. In the performance of its
executive or legislative functions, such as
issuing rules and regulations, an
administrative body need not comply with
the requirements of notice and hearing.
There is no dispute that pilotage as a
profession has taken on the nature of a
property right. Even petitioner Corona
recognized this when he stated in his
decision that (t)he exercise of ones
profession falls within the constitutional
guarantee against wrongful deprivation of, or
interference with, property rights without
due process. He merely expressed the
opinion that (i)n the limited context of this
case, PPA-AO 04-92 does not constitute a
wrongful interference with, let alone a
wrongful deprivation of, the property rights
of those affected thereby, and that PPA-AO
04-92 does not forbid, but merely regulates,
the exercise by harbor pilots of their
profession. As will be presently
demonstrated, such supposition is gravely
erroneous and tends to perpetuate an
administrative order which is not only
unreasonable but also superfluous.
EASTERN SHIPPING LINES, INC. vs. CA
G.R. No. 116356 June 29, 1998
FACTS:
Respondent elevated a complaint against
petitioner for unpaid fees for pilotage service
rendered. Despite repeated demands,
petitioner failed to pay and prays be directed
to pay with legal rate of interest from the
filing of the complaint and other such other
relief. The petitioner assailed
the constitutionality of the EO 1088 upon provisions. The PPA may increase the rates
which respondent based its claims. Petitioner but it may not decrease them below those
insists that it should pay pilotage fees in mandated by E.O. No. 1088
accordance with and on the basis of the It is axiomatic that an administrative
memorandum circulars issued by the PPA, agency, like the PPA, has no discretion whether to
the administrative body vested under PD implement the law or not. Its duty is to enforce it.
857. The trial court directed the petitioner Unarguably, therefore, if there is any conflict
between the PPA circular and a law, such as EO
to pay respondent on sum of unpaid pilotage 1088, the latter prevails.
fees, legal rate of interest, attorney's fees
and costs. The trial court added that the
factual antecedents of the controversy are
simple; the petitioner insists on paying the
fees prescribed under PPA circulars because
EO 1088 sets a higher rate, petitioner then
assailed its constitutionality. The Court of
Appeals affirmed the trial courts decision in
toto. Hence, the petition.

ISSUE:

WON EO 1088 is valid and constitutional.

HELD:

Yes. 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; 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. 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. We conclude JOSE D. LINA, JR., petitioner,
vs.
that E.O. No. 1088 is a valid statute and that
ISIDRO D. CARINO, in his capacity as
the PPA is duty bound to comply with its
Secretary of Education, Culture and Sports,
respondents.
FACTS:
A Petition for Prohibition and Mandamus filed was
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
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. Tuition fee increases
within the prescribed rates 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.
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. 6728. Petitioner also contends that DECS
Order No. 30 is inconsistent with Section 10 of
R.A. No. 6728. In DECS Order No. 30 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. 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.
On the other hand, 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 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.
ISSUE:
WON 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
HELD:
YES. After careful examination of the provisions
of both P.D. No. 451 and BP. Blg. 232, 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.
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 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
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.