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Administrative LawCase Digests

"

ASSIGNMENT NO

Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial Bus OperatorsAssociation of the Philippines (PBOAP)G.R. No. 115381 December 23, 1994

Kapunan, J.

FACTS:!public utilities privately owned and operated businesses whose service are essential to the general

public; enterprises which specially cater to the needs of the public and conducive to their comfort and

convenience

!DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowing provincial bus

operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official

rate for a period of 1 year

!PBOAP pursuant to Memo. Cir. it filed an application for fare rate increase. An across-the-board

increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a

minimum-maximum fare range of fifteen (15%) percent over and below the proposed basic per kilometerfare rate, with the said minimum-maximum fare range applying only to ordinary, first class and premium

class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought

!respondent LTFRB rendered a decision granting the fare rate increase in accordance with a specified

schedule of fares on a straight computation method

!DOTC Sec. issued Department Order No. 92-587 defining the policy framework on the regulation oftransport services. It provides inter alia that Passenger fares shall also be deregulated, except for the

lowest class of passenger service (normally third class passenger transport) for which the government

will fix indicative or reference fares. Operators of particular services may fix their own fares within a

range 15% above and below the indicative or reference rate.

!LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the implementation of

DOTC Department Order No. 92-587, which provides, among others, that:The issuance of a Certificate of Public Convenience is determined by public need. The presumption of

public need for a service shall be deemed in favor of the applicant, while burden of proving that there is

no need for the proposed service shall be the oppositors.

The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneysshall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicativeor reference rate as the basis for the expanded fare range

!PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial bus operators to

collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the

purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent

of the existing fares

!KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.

ISSUE:WON the above memoranda, circulars and/or orders of the DOTC and the LTFRB which, amongothers, (a) authorize provincial bus and jeepney operators to increase or decrease the prescribed

transportation fares without application therefor with the LTFRB and without hearing and approval thereof

by said agency is in violation of Sec. 16(c) of CA 146, and in derogation of LTFRBs duty to fix and

determine just and reasonable fares by delegating that function to bus operators, and (b) establish apresumption of public need in favor of applicants for certificates of public convenience and place on the

oppositor the burden of proving that there is no need for the proposed service, in patent violation not only

of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating that fares should be

just and reasonable

HELD:Yes.!Section 16(c) of the Public Service Act, as amended, reads:

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#

Sec. 16. Proceedings of the Commission, upon notice and hearing. The Commission shall have power,upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the

limitations and exceptions mentioned and saving provisions to the contrary:

xxx xxx xxx

(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as

well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, andfollowed thereafter by any public service: Provided, That the Commission may, in its discretion, approve

rates proposed by public services provisionally and without necessity of any hearing; but it shall call a

hearing thereon within thirty days thereafter, upon publication and notice to the concerns operating in the

territory affected: Provided, further, That in case the public service equipment of an operator is used

principally or secondarily for the promotion of a private business, the net profits of said private business

shall be considered in relation with the public service of such operator for the purpose of fixing the rates.

!LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve and periodically review and

adjust, reasonable fares, rates and other related charges, relative to the operation of public land

transportation services provided by motorized vehicles

!LTFRB not authorized to delegate that power to a common carrier, a transport operator, or other public

service

!authority given by the LTFRB to the provincial bus operators to set a fare range over and above theauthorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative

authority

!rate should not be confiscatory as would place an operator in a situation where he will continue tooperate at a loss; rate should enable public utilities to generate revenues sufficient to cover operational

costs and provide reasonable return on the investments

!CPC - authorization granted by the LTFRB for the operation of land transportation services for publicuse as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following

requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the

Philippines, or a corporation or co-partnership, association or joint-stock company constituted and

organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up capital must

belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertakingthe proposed service and meeting the responsibilities incident to its operation; and (iii) the applicant must

prove that the operation of the public service proposed and the authorization to do business will promote

the public interest in a proper and suitable manner; there must be proper notice and hearing before the

PSC can exercise its power to issue a CPC

!LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent with Section16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must

prove by proper notice and hearing that the operation of the public service proposed will promote publicinterest in a proper and suitable manner. On the contrary, the policy guideline states that the presumption

of public need for a public service shall be deemed in favor of the applicant.

G.R. No. 17122 February 27, 1922

THE UNITED STATES,plaintiff-appellee,vs.

ANG TANG HO,defendant-appellant.

FACTS:

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 thenecessary 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

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$

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 mayacquire, and the maximum sale price that the industrial or merchant may demand.

On August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should be

sold. Thereafter, Ang Tang Ho, herein accused 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.

On August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him with the sale

of rice at an excessive price. He was found guilty of the charged, hence this case.

ISSUE:Whether or not there is a valid delegation of legislative power.

HELD:

No. 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 thediscretion 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 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.

RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATIONCOMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE

REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY,respondents.

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GR NO. 77457

March 20, 1987

Cruz, J.

FACTS:

"Strike but hear me first!"

Executive Order: no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be

transported from one province to another. The carabao 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

charitable institutions and other similar institutions as the Chairman of the National Meat Inspection

Commission may ay see fit, in the case of carabeef, and to deserving farmers through dispersal as the

Director of Animal Industry may see fit, in the case of carabaos.

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984,

when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of theabove they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the

above measure. The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ

of replevin upon his filing of a supersedeasbond of P12,000.00. After considering the merits of the case,

the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered

the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order,

as raise by the petitioner, for lack of authority and also for its presumed validity. CA upheld the trial court.

The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright

confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the

penalty is invalid because it is imposed without according the owner a right to be heard before a competent

and impartial court as guaranteed by due process. He complains that the measure should not have been

presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the

legislative power by the former President under Amendment No. 6 of the 1973 Constitution.

ISSUE:Whether E.O. 626-A is unconstitutional. (The necessity of the previous publication of the measurein the Official Gazette before it could be considered enforceable.)

HELD:YES.While it is true that laws are presumed to be constitutional, that presumption is not by any

means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of

the need to declare them so, then "will be the time to make the hammer fall, and heavily," to recall Justice

Laurel's trenchant warning.

The challenged measure is denominated an executive order but it is really presidential decree, promulgating

a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the

purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority

under Amendment No. 6. It was provided thereunder that whenever in his judgment there existed a grave

emergency or a threat or imminence thereof or whenever the legislature failed or was unable to act

adequately on any matter that in his judgment required immediate action, he could, in order to meet the

exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law.

It is part of the art of constitution-making that the provisions of the charter be cast in precise and

unmistakable language to avoid controversies that might arise on their correct interpretation. That is the

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&

Ideal. In the case of the due process clause, however, this rule was deliberately not followed and the

wording was purposely kept ambiguous.

The due process clause was kept intentionally vague so it would remain also conveniently resilient. This

was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule"

laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the

best virtue of the guaranty.

The minimum requirements of due process are notice and hearing which, generally speaking, may not be

dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying

commentary on our judicial system that the jurisprudence of this country is rich with applications of this

guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play.

This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of

admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as

long as such presumption is based on human experience or there is a rational connection between the fact

proved and the fact ultimately presumed therefrom. (Eg. Nuisances per se)

To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the

interests of the public generally, as distinguished from those of a particular class, require such interference;

and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly

oppressive upon individuals.

In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's

tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive

Order No. 626. But while conceding that the amendatory measure has the same lawful subject as the

original executive order, we cannot say with equal certainty that it complies with the second requirement,

viz., that there be a lawful method. We note that to strengthen the original measure, Executive Order No.

626-A imposes an absolute ban not on the slaughter of the carabaos but on their movement, providing that

"no carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transportedfrom one province to another." The object of the prohibition escapes us. The reasonable connection

between the means employed and the purpose sought to be achieved by the questioned measure is missing

We do not see how the prohibition of the inter-provincial transport of carabaos can prevent their

indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one

province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter

there, any more than moving them to another province will make it easier to kill them there. As for the

carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily

circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for

the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either

to prohibit their transfer as, not to be flippant dead meat.

Even if a reasonable relation between the means and the end were to be assumed, we would still have to

reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright

confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities,

usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was

fine and imprisonment, to be imposed by the court after trial and conviction of the accused. Under the

challenged measure, significantly, no such trial is prescribed, and the property being transported is

immediately impounded by the police and declared, by the measure itself, as forfeited to the government.

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'

In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were

returned to the petitioner only after he had filed a complaint for recovery and given a supersedeasbond of

P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the

trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed

punishment, which was carried out forthright. The measure struck at once and pounced upon the petitioner

without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair

play.

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 carabeef, and to deserving farmers through dispersal as

the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may

see fit" is an extremely generous and dangerous condition, if condition it is. One searches in vain for the

usual standard and the reasonable guidelines, or better still, the limitations that the said 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 intheir 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.

To sum up then, we find that the challenged measure is an invalid exercise of the police power because the

method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and,

worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is

denied the right to be heard in his defense and is immediately condemned and punished. The conferment on

the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear

encroachment on judicial functions and militates against the doctrine of separation of powers. There is,

finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted

unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we herebydeclare Executive Order No. 626-A unconstitutional.

The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke

them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry,

all they do is embellish and impress. Rights, as weapons, must be a promise of protection. They become

truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp

with use by those who are not afraid to assert them.

Department of Agrarian Reform, represented by Secretary Jose Mari B. Ponce (OIC)vs

Delia T. Sutton, Ella T. Sutton-Soliman and Harry T. Sutton

G.R. No.162070

Facts:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision

and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004,

respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and

void for being violative of the Constitution.

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(

The case involves a land in Aroroy, Masbate, inherited by respondents which has been devoted

exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian

reform program of the government, respondents made a voluntary offer to sell (VOS) their

landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the

Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage

farms used for raising livestock, poultry and swine.

On December 4, 1990, in an en bancdecision in the case of Luz Farms v. Secretary of DAR, the

Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of

agricultural land and declared as unconstitutional certain provisions of the CARL insofar as they

included livestock farms in the coverage of agrarian reform. In view of this, respondents filed with

petitioner DAR a formal request to withdraw their VOS as their landholding was devoted

exclusively to cattle-raising and thus exempted from the coverage of the CARL.

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected

respondents' land and found that it was devoted solely to cattle-raising and breeding. He

recommended to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and

requested the return of the supporting papers they submitted in connection therewith. Petitionerignored such request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that only portions

of private agricultural lands used for the raising of livestock, poultry and swine as of June 15,

1988 shall be excluded from the coverage of the CARL. In determining the area of land to be

excluded, the A.O. fixed the following retention limits, viz.: 1:1 animal-land ratio and a ratio of

1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded

from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final

and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire

landholding is exempted from the CARL.

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order partially grantingthe application of respondents for exemption from the coverage of CARL. Applying the retention

limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for

grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the

rest of respondents' landholding to be segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration, contending that their entire landholding should be

exempted as it is devoted exclusively to cattle-raising. Said motion was denied. Respondents filed

a notice of appeal with the Office of the President assailing: (1) the reasonableness and validity of

DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining

the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O.

No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from

the coverage of agrarian reform. The OP affirmed the impugned order. On appeal to CA, the CA

ruled in favor of respondents and declared A.O. No. 9, Series of 1993 as void.

Issue:

Whether or not DAR Administrative Order No. 09, Series of 1993 which prescribes a maximum

retention for owners of lands devoted to livestock raising is constitutional?

Held:

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)

The impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate

livestock farms by including them in the coverage of agrarian reform and prescribing a maximum

retention limit for their ownership. However, the deliberations of the 1987 Constitutional

Commission show a clear intent to exclude, inter alia,all lands exclusively devoted to livestock,

swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and

poultry-raising are industrial activities and do not fall within the definition of "agriculture" or

"agricultural activity." The raising of livestock, swine and poultry is different from crop or tree

farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this

enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities,

drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and

generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment

like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated

water tanks, pumphouses, sprayers, and other technological appurtenance.

Petitioner DAR has no power to regulate livestock farms which have been exempted by the

Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the

assailed A.O.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by

Congress without substantial change is an implied legislative approval and adoption of theprevious law. On the other hand, by making a new law, Congress seeks to supersede an earlier

one. In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881

which amended certain provisions of the CARL. Specifically, the new law changed the definition

of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands

that are devoted to commercial livestock, poultry and swine-raising. With this significant

modification, Congress clearly sought to align the provisions of our agrarian laws with the intent

of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian

reform.

It is doctrinal that rules of administrative bodies must be in harmony with the provisions of the

Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to

and be consistent with the Constitution. In case of conflict between an administrative order and the

provisions of the Constitution, the latter prevails. The assailed A.O. of petitioner DAR was

properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond

the scope intended by the 1987 Constitution.

Solicitor General vs. Metropolitan Manila Authority

Facts:

On July 13, 1990 the Court held in the case of Metropolitan Traffic Command, West Traffic

District vs. Hon. Arsenio M. Gonong, that the confiscation of the license plates of motor vehicles for traffic

violations was not among the sanctions that could be imposed by the Metro Manila Commission under PD

1605 and was permitted only under the conditions laid down by LOI 43 in the case of stalled vehicles

obstructing the public streets. Even the confiscation of drivers licenses for traffic violations was not

directly prescribed or allowed by the decree. After no motion for reconsideration of the decision was filed

the judgment became final and executor.

Withstanding the Gonong decision still violations of the said decision transpired, wherein there

were several persons who sent complaint letters to the Court regarding the confiscation of drivers licenses

and removal of license plate numbers.

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*

On May 24, 1990 the MMA issued Ordinance No. 11, Series of 1991, authorizing itself to detach

license plate/tow and impound attended/unattended/abandoned motor vehicles illegally parked or

obstructing the flow of traffic in Metro Manila.

On July 2, 1991, the Court issued a resolution regarding the matter which stated that the

Ordinance No. 11, Section 2 appears to be in conflict with the decision of the Court, and that the Court has

received several complaints against the enforcement of such ordinance.

Issue:

W/N Ordinance No. 11 Series of 1991 and Ordinance No. 7, Series of 1998 are valid in the

exercise of such delegated power to local government acting only as agents of the national legislature?

Held:

No, the Court rendered judgment: 1) declaring Ordinance No. 11, Series of 1991, of the MMA and

Ordinance No. 7, Series of 1998, of the Municipality of Mandaluyong, Null and Void; and 2) enjoining all

law-enforcement authorities in Metropolitan Manila from removing the license plates of motor vehicles

(except when authorized under LOI43) and confiscating drivers licenses for traffic violations within thesaid area.

To test the validity of said acts the principles governing municipal corporations was applied,

according to Elliot for a municipal ordinance to be valid the following requisites should be complied: 1)

must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be

partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6)

must be general and consistent with public policy.

In the Gonong decision it was shown that the measures under consideration did not pass the first

criterion because it did not conform to existing law. PD 1605 does not allow either the removal of license

plates or the confiscation of drivers licenses for traffic violations committed in Metropolitan Manila.

There is nothing in the decree authorizing the MMA to impose such sanctions. Thus Local political

subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national

legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred

by the Constitution itself). They are mere agents vested with what is called the power of subordinate

legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all

times the will of the principal. In the case at bar the enactments in question, which are merely local in

origin, cannot prevail against the decree, which has the force and effect of a statute.

[G.R. No. 92174. December 10, 1993.]

BOIE-TAKEDA CHEMICALS, INC., petitioner, vs. HON. DIONISIO C. DE LA SERNA, ActingSecretary of the Department of Labor and Employment, respondent.

Facts for G.R. No. 92174:

A routine inspection was conducted in the premises of Boie-Takeda Chemicals, Inc. by Labor and

Development Officer Reynaldo B. Ramos. Finding that Boie-Takeda had not been including the

commissions earned by its medical representatives in the computation of their 13th month pay, Ramos

served a Notice of Inspection Results on Boie-Takeda through its president, Mr. Benito Araneta, requiring

Boie-Takeda within ten (10) calendar days from notice to effect restitution or correction of "the

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underpayment of 13th month pay for the year(s) 1986, 1987 and 1988 of Med Rep in the total amount of

P558,810.89

Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results, and expressing the

view "that the commission paid to our medical representatives are not to be included in the computation of

the 13th month pay . . . (since the) law and its implementing rules speak of REGULAR or BASIC salary

and therefore exclude all other remunerations which are not part of the REGULAR salary." It pointed outthat, "If no sales is (sic) made under the effort of a particular representative, there is no commission during

the period when no sale was transacted, so that commissions are not and cannot be legally defined as

regular in nature."

Regional Director Luna C. Piezas directed Boie-Takeda to appear before his Office. On the appointed

dates, however, and despite due notice, no one appeared for Boie-Takeda, and the matter had perforce to be

resolved on the basis of the evidence at hand. On July 24, 1989, Director Piezas issued an Order directing

Boie-Takeda to pay the said amount.

Facts for G.R. No. 102552:

A similar Routine Inspection was conducted in the premises of Philippine Fuji Xerox Corp due t o theUnderpayment of 13th month pay of 62 employees, more or less. Philippine Fuji Xerox was requested to

effect rectification and/or restitution of the noted violation within five (5) working days from notice.

No action having been taken thereon by Philippine Fuji Xerox, Mr. Eduardo G. Gonzales, President of

Philxerox Employees Union, wrote then Labor Secretary Franklin Drilon requesting a follow-up of the

inspection findings. Messrs. Nicolas and Gonzales were summoned to appear before Labor Employment

and Development Officer Mario F. Santos, NCR Office, Department of Labor for a conciliation conference.

When no amicable settlement was reached, the parties were required to file their position papers.

Issue:

What item or items of employee remuneration should go into the computation of thirteenth month pay?

Held:

Contrary to respondents' contention, Memorandum Order No. 28 did not repeal, supersede or abrogate P.D.

851. As may be gleaned from the language of Memorandum Order No. 28, it merely "modified" Section 1

of the decree by removing the P1,000.00 salary ceiling. The concept of 13th Month Pay as envisioned,

defined and implemented under P.D. 851 remained unaltered, and while entitlement to said benefit was no

longer limited to employees receiving a monthly basic salary of not more than P1,000.00, said benefit was,

and still is, to be computed on the basic salary of the employee-recipient as provided under P.D. 851. Thus,

the interpretation given to the term "basic salary" as defined in P.D. 851 applies equally to "basic salary"

under Memorandum Order No. 28.

The term "basic salary" is to be understood in its common, generally-accepted meaning, i.e., as a rate of

pay for a standard work period exclusive of such additional payments as bonuses and overtime.

In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or

guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work

period. Commissions are given for extra efforts exerted in consummating sales or other related transactions.

They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary."

In including commissions in the computation of the 13th month pay, the second paragraph of Section 5 (a)

of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept

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""

of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to

or detract from the provisions of the law it is designed to implement. Administrative regulations

adopted under legislative authority by a particular department must be in harmony with the

provisions of the law they are intended to carry into effect. They cannot widen its scope. An

administrative agency cannot amend an act of Congress.

G.R. No. 124873. July 14, 1999

UNITED BF HOMEOWNERS ASSOCIATION, and HOME INSURANCE AND GUARANTYCORPORATION,petitioners, vs. BF HOMES, INC.,respondents.

PARDO, J.

FACTS:Petitioner United BF Homeowners Association, Inc. (UBFHAI) is the umbrella organization and sole

representative of all homeowners in the BF Homes Paraaque Subdivision, 765 hectare subdivision located

in the south of Manila. Respondent BF Homes, Inc. (BFHI) is the owner-developer of the said subdivision,

which first opened in 1968.

In 1988, because of financial difficulties, the Securities and Exchange Commission (SEC) placedrespondent BFHI under receivership to undergo a 10 year rehabilitation program, and appointed Atty.

Florencio B. Orendain receiver. The program was composed of two stages: (1) payment of obligations to

external creditors; and (2) payment of obligations to Banco Filipino.

When Atty. Florencio B. Orendain took over management of respondent BFHI in 1988, several things were

not in order in the subdivision. Preliminary to the rehabilitation, Atty. Orendain entered into an agreementwith the two major homeowners associations, the BF Paraaque Homeowners Association, Inc. (BFPHAI)

and the Confederation of BF Homeowners Association, Inc. (CBFHAI), for the creation of a single,

representative homeowners association and the setting up of an integrated security program that wouldcover the 8 entry and exit points to and from the subdivision. On December 20, 1988, this tripartite

agreement was reduced into a memorandum of agreement, and amended on March 1989.

Pursuant to these agreements, on May 18, 1989, petitioner UBFHAI was created and registered with the

Home Insurance and Guaranty Corporation (HIGC), and recognized as the sole representative of all the

homeowners association inside the subdivision.

Respondent BFHI, through its receiver, turned over to petitioner UBFHAI the administration and operation

of the subdivisions clubhouse at #37 Pilar Banzon Street, and a strip of open space in Concha Cruz GardenRow, on June 23, 1989 and May, 1993, respectively.

On November 7, 1994, the first receiver was relieved and a new committee of receivers, composed ofrespondent BFHIs eleven (11) members of the board of directors was appointed.

On April 7, 1995, based on BFHIs title to the main roads, the newly appointed committee of receivers sent

a letter to the different homeowners association in the subdivision informing them that as a basic

requirement for BFHIs rehabilitation, respondent BFHI would be responsible for the security of the

subdivision in order to centralize it and abate the continuing proliferation of squatters.

On the same day, petitioner UBFHAI filed with the HIGC a petition for mandamus with preliminaryinjunction against respondent BFHI. Petitioner UBFHAI alleged that the committee of receivers illegally

revoked their security agreement with the previous receiver. They complained that even prior to said date,

the new committee of receivers committed the following acts: (1) deferred petitioner UBFHAIs purchaseof additional pumps; (2) terminated the collection agreement for the community assessment forged by the

petitioner UBFHAI with the first receiver; (3) terminated the administration and maintenance of the

Concha Cruz Garden Row; (4) sent a letter to petitioner UBFHAI stating that it recognized BFPHAI only,

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"$

associations, but also the original and exclusive jurisdiction to hear and decide casesinvolving:

(b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members or associates; between any or all of them and the corporation, partnership

or association of which they are stockholders, members or associates respectively; and between

such corporation, partnership or association and the state insofar as it concerns their individual

franchise or right to exist as such entity.

On December 21, 1989, the HIGC adopted its rules of procedure in the hearing of homeowners

disputes. Section 1(b), Rule II enumerated the types of disputes over which the HIGC has

jurisdiction, and these include:

Section 1. Types of Disputes- The HIGC or any person, officer, body, board, or committee duly

designated or created by it shall have jurisdiction to hear and decide cases involving the following:

x x x

(b) Controversies arising out of intra-corporate relations between and among members of the

association, between any and/or all of them and the association of which they are members, and

insofar as it concerns its right to exist as a corporate entity, between the association and thestate/general public or other entity.

Neither can the HIGC claim original and exclusive jurisdiction over the petition for mandamus

under the two other types of disputes enumerated in Presidential Decree 902-A and in the revisedrules. The dispute is not one involving the members of the homeowners association nor it is one

between any and/or all of the members and the associations of which they are members. The

parties are the homeowners association and the owner-developer, acting at the same time as the

corporations committee of receivers.

To reiterate, the HIGC exercises a very limited jurisdiction over homeowners disputes. The law

confined this authority to controversies that arise out of the following intra-corporate relations:

(1) between and among members of the association; (2) between any and/or all of them and the

association of which they are members; and (3) insofar as it concerns its right to exist as a

corporate entity, between the association and the state. None of the parties to the litigation canenlarge or diminish it or dictate when it shall attach or when it shall be removed.

Jurisdiction is defined as the power and authority of a court to hear, try and decide a case.

Jurisdiction over the subject matter is conferred by the Constitution or by law. Nothing can

change the jurisdiction of the court over the subject matter. That power is a matter of legislative

enactment which none by the legislature may change.

2. Whether or not the acts committed or threatened to be committed by the respondent against

the petitioner would constitute an attack on the latters corporate existence would be immaterial.

The HIGC has no jurisdiction to hear and resolve the dispute.

Having dispensed with the question of jurisdiction, there is no need for the HIGC to proceed

with the hearing of HIGC-HOA 95-027. It would just be an exercise in futility since it has nojurisdiction.

Furthermore, it was apparent that the board of directors of respondent BFHI, acting as the

committee of receivers, was only trying to find ways and means to rehabilitate the corporation so

that it can pay off its creditors. The revocation of the security agreements and the removal ofadministration and maintenance of certain property that are still under the name of respondent

BFHI, were acts done in pursuance of the rehabilitation program. All the security agreements

and undertakings were contractual in nature, which respondent BFHI, acting as a committee of

receivers and being the successor of the former receiver, could very well alter or modify.

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"&

SEC and PRC are not in the same category. There is NO LAW providing for the next course of action for aparty who wants to question a ruling/order of the PRC. There is no provision in PD 223 creating the PRC

that orders or resolutions of the PRC are appealable either to the CA or SC. Thus, the civil case filed to

enjoin the enforcement of the Resolution should fall within the general jurisdiction of the CFI/RTC.

What is clear from PD 223 is that the PRC is attached to the Office of the President for general directionand coordination.

" Medallla v. Sayo: Even acts of the President may be reviewed by the CFI

" Republic v. Presiding Judge, CFI of Lanao del Norte: The respondent Court is not only right but

duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is

allegedly infringed by the administrative action of a government office. CFI have original

jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary

estimation.

SC: No cogent reason why Resolution 105 issued by PRC should be exempted from the general jurisdiction

of the RTC.

PRC further contends that under BP 129, it is the CA which has jurisdiction over the case.

" SC: In order to invoke the exclusive appellate jurisdiction of the CA as provided for in Sec.9, BP 129, there has to be a FINAL ORDER or RULING which resulted from proceedingswherein the admin body involved exercised its quasi-judicial functions.

" Quasi-judicial: a term applied to the action, discretion, etc. of public admin officers or bodies

required to investigate facts or ascertain the existence of facts, hold hearings and draw conclusions

from them, as a basis for their official action and to exercise discretion of a judicial nature

(Blacks Law Dictionary)." Quasi-judicial adjudication: a determination of rights, privileges, and duties resulting in a decision

or order which applies to a specific situation. (Gonzales, Admin Law). This does not cover rules

and regulations of general applicability issued by the admin body to implement its purelyadministrative policies and functions like Resolution No. 105 which was adopted by PRC asa measure to preserve the integrity of licensure exams.

On the validity of Resolution No. 105

" Its good aim cannot be a cloak to conceal its constitutional infirmities. It is unreasonable in that an

examinee cannot even attend any review class, etc.

" Its unreasonableness is more obvious in that one who is caught committing the prohibited acts will

be barred from taking future exams by the PRC.

" It is inconceivable how the Commission can manage to have a watchful eye on each and every

examinee during the three days before the exam period.

" Administrative authorities should not act arbitrarily and capriciously in the issuance of rulesand regulations. To be valid, such rules and regulations must be reasonable and fairlyadapted to the end in view. If shown to bear no reasonable relation to the purposes for whichthey are authorized to be issued, then they must be held to be invalid. (Gonzales, AdminLaw)

" Resolution No. 105 is not only unreasonable and arbitrary. It also infringes on theexaminees right to liberty guaranteed by the Constitution. PRC has NO AUTHORITY todictate on the reviewees as to how they should prepare themselves for the licensure exams.They cannot be retrained from taking all the lawful steps needed to assure the fulfillment oftheir ambition to become public accountants. They have every right to make use of their

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"'

faculties in attaining success in their endeavors. They should be allowed to enjoy theirfreedom to acquire useful knowledge that will promote their personal growth.

" Resolution No. 105 also violates the academic freedom of the schools concerned.

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. vs. HON. RUBEN D. TORRES,as Secretary of the Department of Labor and Employment, and JOSE N. SARMIENTO, as

Administrator of the Philippine Overseas Employment Administration

GR NO. 101279. AUGUST 6, 1992

GRIO-AQUINO

This petition for prohibition with temporary restraining order was filed by the Philippine Association of

Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and

Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or

POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA

Memorandum Circular Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private

employment agencies of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the

facilities of the POEA, the task of processing and deploying such workers.

FACTS: PASEI is the largest national organization of private employment and recruitment agencies dulylicensed and authorized by the POEA to engage in the business of obtaining overseas employment for

Filipino landbased workers including domestic helpers.

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids

employed in HK, DOLE Sec. Torres issued Dept. Order. No. 16, Series of 1991, temporarily suspending

the recruitment by private employment agencies of Filipino domestic helpers going to HK. DOLE,

through the POEA, took over the business of deploying such HK-bound workers.

ISSUES: On September 2, 1991, PASEI filed this petition for prohibition to annul the DOLE and POEA

circulars and to prohibit their implementation for the ff. reasons:

1. Torres and Sarmiento acted with grave abuse of discretion and/or in excess of their rule-making

authority in issuing said circulars;

2. The assailed DOLE and POEA circulars are contrary to the Constitution, unreasonable, unfair, and

oppressive;

3. The requirements of publication and filing with the Office of the National Administrative Register

were not complied with.

HELD: 1 / 2 NO. Article 36 of the Labor Code grants the Labor Secretary the power to restrict andregulate recruitment and placement activities.

Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate therecruitment and placement activities of all agencies within the coverage of this title [Regulation of

Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and

regulations to carry out the objectives and implement the provisions of this title.

On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive

Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development

Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment

Services, is broad and far-ranging for:

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"(

1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was thepower and duty, among others, to establish and maintain a registration and/or licensing system to

private sector participation in the recruitment and placement of workers, locally and overseas, (Art.

15, Labor Code)

2. It assumed from the defunct Overseas Employment Development Board the power and duty, among

others, to recruit and place workers for overseas employment of Filipino contract workers, on agovernment to government arrangement and in such other sectors as policy may dictate (Art. 17,

Labor Code)

3. From the National Seamen Board, the POEA took over, among others, to regulate and supervise the

activities of agents or representatives of shipping companies in the hiring of seamen for overseas

employment; and secure the best possible terms of employment for contract seamen workers and

secure compliance therewith." (Art. 20, Labor Code)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is notunconstitutional, unreasonable, and oppressive. It has been necessitated by the growing complexityof the modern society. More and more administrative bodies are necessary to help in the regulation

of societys ramified activities. "Specialized in the particular field assigned to them, they can dealwith the problems thereof with more expertise and dispatch than can be expected from the

legislature or the courts of justice".

The assailed circulars do not prohibit PASEI from engaging in the recruitment and deployment of Filipino

landbased workers for overseas employment. The administrative issuances discloses that they fall within

the administrative and policing poers expressly or by necessary implication conferred upon Torres and

Sarmiento.

The power to restrict and regulate conferred by Art. 36 of the Labor Code involves a grant of police

power.

To restrict means to confine, limit, or stop. The power to regulate means the power to protect, foster,

promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the

utility and of its patrons.

As the SolGen aptly observed: said administrative order merely restricted the scope or area of PASEIs

business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong

Kong till after the establishment of the `mechanisms that will enhance the protection of Filipino domestic

helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic

helpers for Hongkong, PASEI may still deploy other class of Filipino workers either for Hongkong and

other countries and all other classes of Filipino workers for other countries. Said administrative issuances,

intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement

and documentation fees, travel fees and other charges committed by private employment agencies

recruiting and deploying domestic helpers to Hongkong. They are reasonable, valid and justified under the

general welfare clause of the Constitution, since the recruitment and deployment business, as it is

conducted today, is affected with public interest.

The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is

merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the

tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by

private employment agencies are hereby temporarily suspended effective July 1. 1991. It is limited in

scope, being confined to recruitment of domestic helpers going to HK only.

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")

The justification for the takeover of the processing and deploying of domestic helpers for Hongkong

resulting from the restriction of the scope of petitioners business is confined solely to the unscrupulous

practice of private employment agencies victimizing applicants for employment as domestic helpers for

Hongkong and not the whole recruitment business in the Philippines.

The questioned circulars are therefore a valid exercise of the police power as delegated to the executive

branch of Government.

3. YES. Nevertheless, they are legally invalid, defective and unenforceable for lack of proper

publication and filingin the Office of the National Administrative Register as required in Article 2 of theCivil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative

Code of 1987 which provide:

Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the

Official Gazette, unless it is otherwise provided. . . . ." (Civil Code.)

Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with

the administration and enforcement of this Code or any of its parts shall promulgate the necessary

implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) daysafter announcement of their adoption in newspapers of general circulation." (Labor Code, as amended)

Section 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3)

certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are

not filed within three (3) months shall not thereafter be the basis of any sanction against any party or

persons." (Chapter 2, Book VII of the Administrative Code of 1987)

Section 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent

with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided

unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health,

safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The

agency shall take appropriate measures to make emergency rules known to persons who may be affected bythem." (Chapter 2, Book VII of the Administrative Code of 1987)

Administrative rules and regulations must also be published if their purpose is to enforce orimplement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnelof the administrative agency and not the public, need not be published. Neither is publication

required of the so-called letters of instructions issued by administrative superiors concerning therules or guidelines to be followed by their subordinates in the performance of their duties.

Publication must be in full or it is no publication at all since its purpose is to inform the public of thecontent of the laws.

For lack of proper publication, the administrative circulars in question may not be enforced and

implemented.

WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order

No. 16, Series of 1991, and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, by the public

respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication

and filing under the aforementioned laws of the land.

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"*

G.R. No. L-16704 March 17, 1962

VICTORIAS MILLING COMPANY, INC.vs. SOCIAL SECURITY COMMISSION

BARRERA,J.:

FACTS: The Social Security Commission (SSC) issued its Circular No. 22 of the following tenor:

Effective November 1, 1958, all Employers in computing the premiums due the System, will take

into consideration and include in the Employee's remuneration all bonuses and overtime pay, as

well as the cash value of other media of remuneration. All these will comprise the Employee's

remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a

maximum of P500 for any one month.

Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., wrote SSC in effect

protesting against the circular as contradictory to a previous Circular No. 7, expressly excluding overtime

pay and bonus in the computation of the employers' and employees' respective monthly premium

contributions. It further questioned the validity of the circular for lack of authority on the part of theSSC to promulgate it without the approval of the President and for lack of publication in the OfficialGazette.

SSC ruled that Circular No. 22 is not a rule or regulation that needed the approval of thePresident and publication in the Official Gazette to be effective, but a mere administrativeinterpretation of the statute, a mere statement of general policy or opinion as to how the law shouldbe construed. This prompted Victorias to appeal before the Supreme Court.

ISSUE: Whether or not Circular No. 22 is a rule or regulation, as contemplated in Section 4(a) of RepublicAct 1161 empowering SSC "to adopt, amend and repeal subject to the approval of the President such rules

and regulations as may be necessary to carry out the provisions and purposes of this Act."

HELD: NO. Circular No. 22 is merely an administrative interpretation of a law and not a rule or

regulation. Thus, publication in the Official Gazette and approval of the President are not necessary.

Difference between administrative rules or regulations and administrative interpretation of law:

When an administrative agency promulgates rules and regulations, it "makes" a new law with the

force and effect of a valid law, while when it renders an opinion or gives a statement of policy; it merely

interprets a pre-existing law. 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 often times left

to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules andregulations are the product of a delegated power to create new or additional legal provisions that have the

effect of law.

A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and

its scope is within the statutory authority granted by the legislature, even if the courts are not in agreementwith the policy stated therein or its innate wisdom. On the other hand, administrative interpretation of the

law is at best merely advisory, for it is the courts that finally determine what the law means.

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#+

Circular No. 22 in question was issued by SSC, in view of the amendment of the provisions of theSocial Security Law defining the term "compensation" contained in Section 8 (f) of Republic Act No. 1161

which, before its amendment, reads as follows: .

(f) Compensation All remuneration for employment include the cash value of any remuneration

paid in any medium other than cash except (1) that part of the remuneration in excess of P500

received during the month; (2) bonuses, allowances or overtime pay; and (3) dismissal and allother payments which the employer may make, although not legally required to do so.

Republic Act No. 1792 changed the definition of "compensation" to:

(f) Compensation All remuneration for employment include the cash value of any remuneration

paid in any medium other than cash except that part of the remuneration in excess of P500.00

received during the month.

It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay

given in addition to the regular or base pay were expressly excluded, or exempted from the definition of theterm "compensation", such exemption or exclusion was deleted by the amendatory law. It thus became

necessary for the SSC to interpret the effect of such deletion or elimination. Circular No. 22 was, therefore,

issued to advise employers-members of SSC of what, in the light of the amendment of the law, they shouldinclude in determining the monthly compensation of their employees upon which the social security

contributions should be based. It did not add any duty or detail that was not already in the law as amended.

It merely stated and circularized the opinion of the Commission as to how the law should be construed.

Santiago vs. Comelec

G.R. No. 127325

Facts:

December 6, 1996, private respondent Atty. Jesus S. Delfin (founding member of the Movement for

Peoples Initiative) filed with COMELEC a Petition to Amend the Constitution, to Lift Term Limits of

Elective Officials, by Peoples Initiative wherein Delfin asked the COMELEC for an order

1. Fixing the time and dates for signature gathering all over the country;

2. Causing the necessary publications of said Order and the attached Petition for Initiative on

the 1987 Constitution, in newspapers of general and local circulation;

3. Instructing Municipal Election Registrars in all Regions of the Philippines, to assist

Petitioners and volunteers, in establishing signing stations at the time and on the dates

designated for the purpose.

The provisions sought to be amended are Sections 4 and 7 of Article VI,Section 4 of Article VII,

and Section 8 of Article Xof the Constitution. Elfin contended that R.A. No. 6735 provides

for three systems of initiative, namely, initiative on the Constitution, on statutes, and on local

legislation.

Petitioners Senator Miriam Defensor Santiago, Alexander Padilla, and Maria Isabel Ongpin --

filed this special civil action for prohibition raising the following arguments:

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1. The constitutional provision on peoples initiative to amend the Constitution can only be

implemented by law (enabling law) to be passed by Congress and in this case there is none.

2. R.A. No. 6735 failed to provide any subtitle on initiative on the Constitution, unlike in the

other modes of initiative thus the matter of peoples initiativeto amend the Constitution was

left to some future law.

3. COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern the conduct of

initiative on the Constitution and initiative and referendum on national and local laws,

is ultra viresinsofar as initiativeon amendments to the Constitution is concerned, since the

COMELEC has no power to provide rules and regulations for the exercise of the right of

initiative to amend the Constitution. Only Congress is authorized by the Constitution to

pass the implementing law.

4. The peoples initiative is limited to amendmentsto the Constitution, not

to revisionthereof. Extending or lifting of term limits constitutes a revisionand is,

therefore, outside the power of the peoples initiative.

This Court (a) required the respondents to comment on the petition within a non-extendible period often days from notice; and (b) issued a temporary restraining order, effective immediately and

continuing until further orders, enjoining public respondent COMELEC from proceeding with the

Delfin Petition, and private respondents Alberto and Carmen Pedrosa from conducting a signature

drive for peoples initiative to amend the Constitution.

Delfin filed a comment and contended that the claim that COMELEC Resolution No. 2300 is ultra

viresis contradicted by (a) Section 2, Article IX-C of the Constitution, which grants the COMELEC

the power to enforce and administer all laws and regulations relative to the conduct of an election,

plebiscite, initiative, referendum, and recall; and (b) Section 20 of R.A. 6735, which empowers the

COMELEC to promulgate such rules and regulations as may be necessary to carry out the purposes of

the Act.

Issues:

1. Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition solely

intended to obtain an order (a) fixing the time and dates for signature gathering; (b) instructing

municipal election officers to assist Delfin's movement and volunteers in establishing signature

stations; and (c) directing or causing the publication of, inter alia, the unsigned proposed Petition

for Initiative on the 1987 Constitution.

2. Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and Regulations

Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum on

National and Local Laws) regarding the conduct of initiative on amendments to the Constitution

is valid, considering the absence in the law of specific provisions on the conduct of suchinitiative.

Held:

The rule is that what has been delegated, cannot be delegated or as expressed in a Latin

maxim:potestas delegata non delegari potest.The recognized exceptions to the rule are as follows:

(1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the Constitution;

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(2) Delegation of emergency powers to the President under Section 23(2) of Article VI of the Constitution;

(3) Delegation to the people at large;

(4) Delegation to local governments; and

(5) Delegation to administrative bodies.

Empowering the COMELEC, an administrative body exercising quasi-judicial functions, to

promulgate rules and regulations is a form of delegation of legislative authority under no. 5

above. However, in every case of permissible delegation, there must be a showing that the delegation itself

is valid. It is valid only if the law (a) is complete in itself, setting forth therein the policy to be executed,

carried out, or implemented by the delegate; and (b) fixes a standard -- the limits of which are sufficiently

determinate and determinable -- to which the delegate must conform in the performance of his functions. A

sufficient standard is one which defines legislative policy, marks its limits, 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.

Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No. 6735 miserably

failed to satisfy both requirements in subordinate legislation. The delegation of the power to theCOMELEC is then invalid.

COMELEC RESOLUTION NO. 2300, INSOFAR AS IT PRESCRIBES RULES ANDREGULATIONS ON THE CONDUCT OF INITIATIVE ON AMENDMENTS TO THECONSTITUTION, IS VOID.

It logically follows that the COMELEC cannot validly promulgate rules and regulations to implement

the exercise of the right of the people to directly propose amendments to the Constitution through the

system of initiative. It does not have that power under R.A. No. 6735. Reliance on the COMELECspower under Section 2(1) of Article IX-C of the Constitution is misplaced, for the laws and regulations

referred to therein are those promulgated by the COMELEC under (a) Section 3 of Article IX-C of the

Constitution, or (b) a law where subordinate legislation is authorized and which satisfies the

completeness and the sufficient standard tests.

ASSIGNMENT NO 5

PEOPLE VS. MACEREN

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 itsgeneral provisions. By such regulations, the law itself cannot be extended. An administrative agency cannotamend an act of Congress.

FACTS: The respondents were charged with violating Fisheries Administrative Order No. 84-1 whichpenalizes electro fishing in fresh water fisheries. This was 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. The municipal court quashed the complaint and held that the law does not clearly

prohibit electro fishing, hence the executive and judicial departments cannot consider the same. On appeal,

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the CFI affirmed the dismissal. Hence, this appeal to the SC.

ISSUE:Whether the administrative order penalizing electro fishing is valid?

HELD: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheriesexceeded their authority in issuing the administrative order. The old Fisheries Law does not expressly

prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture andNatural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the lawmakingbody intended to punish electro fishing, a penal provision to that effect could have been easily embodied in

the old 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. 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 ofadministrative officers and boards, which have the effect of extending, or which conflict with the authority

granting statute, do not represent a valid precise of the rule-making power

US VS. PANLILIO

The orders (rules and regulations) of an administrative officers or body issued pursuant to a statute have the

force of law but are not penal in nature and a violation of such orders is not a offense punishable by law

unless the statute expressly penalizes such violation.

FACTS: The accused was convicted of violation of Act 1760 relating to the quarantining of animalssuffering 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 trial. It is alleged that the

accused illegally and without being authorized to do so, and while quarantine against the said carabaos

exposed to rinderpest was still in effect, permitted and ordered said carabaous to be taken from the corral in

which they were quarantined and drove them from one place to another. The accused contends that the

facts alleged in the information and proved on the trial do not constitute a violation of Act No. 1760

ISSUE:Whether accused can be penalized for violation of the order of the Bureau of Agriculture?

HELD: NO. Nowhere in the law is the violation of the orders of the Bureau of Agriculture prohibited ormade unlawful, nor is there provided any punishment for a violation of such orders. Section 8 of Act No.1760 provides that any person violating any of the provisions of the Act shall, upon conviction, be

punished. However, the only sections of the Act which prohibit acts and pronounce them as unlawful areSections 3, 4 and 5. This case does not fall within any of them. A violation of the orders of the Bureau of

Agriculture, as authorized by paragraph, 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. However, the accused did violate Art. 581, 2 of the Penal Code which punishes any person whoviolates regulations or ordinances with reference to epidemic disease among animals.

G.R. No. L-44291; August 15, 1936

PEOPLE, plaintiff-appellant vs. AUGUSTO A. SANTOS, defendant-appelleeVILLA-REAL,J.:

FACTS:On June 18, 1930, the provincial fiscal of Cavite filed against Augusto A. Santos an information re:

violation of section 28 of Fish and Game Administrative Order No. 2 and penalized by section 28. On April

29, 1935, within 1,500 yards north of Cavalry Point, Corregidor Island, Province of Cavite, Santos, the

registered owner of two fishing motor boats Malabon II andMalabon III, had said boat manned and

operated by his fishermen, fish, loiter and anchor without permission from the Secretary of Agriculture and

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Commerce within three (3) kilometers from the shore line of the Island of Corregidor over which the navaland military authorities of the United States exercise jurisdiction.

Section 28 of Administrative Order No. 2 provides: 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 islandsand reservations over which jurisdiction is exercised by naval or military authorities of the United States,

particularly Corregidor: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 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 thenSecretary of Agriculture and Natural Resources by virtue of the authority vested in him by section 4 of Act

No. 4003.

ISSUE:Whether Admin Order No. 2 is valid. NO

HELD:NO. 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 navaland 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 issuefrom 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 onthe 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. Information dismissed.

PEREZ V LPG REFILLERSASSOCIATION OF THE PHILIPPINES,INC492 SCRA 638QUISUMBING; Aug 28, 2007

Facts: Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing, adulteration,underdelivery, and underfilling of petroleum products, as well as possession for trade of adulterated

petroleum products and of underfilled liquefied petroleum gas (LPG) cylinders. The saidlaw sets the

monetary penalty for violators to a minimum of P20,000 and a maximum of P50,000.4- On June 9, 2000,

Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33. It is alleged that Circular No.

2000-06-010 (theassailed Circular) listed prohibited acts andpunishable offenses which are brand-new

or which were not provided for by B.P. Blg. 33, as amended;and that B.P. Blg. 33 enumerated andspecifically defined the prohibited/punishable acts under thelaw and that the punishable offenses in the

assailed Circular are not included in the law.

Issue : Whether or Not the circular is valid

Held: Yes- For an administrative regulation, such as the Circular in this case, to have the force of penallaw, (1) the violation of the administrative regulation must be made a crime by the delegating

statute itself; and (2) the penalty for such violation must be provided by the statuteitself.1.The Circular

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satisfies the first requirement. B.P.Blg. 33, as amended, criminalizes illegal trading, adulteration,

underfilling, hoarding, and overpricing of petroleum products. Under this general description of what

constitutes criminal acts involving petroleum products, the Circular merely lists the various modes by

which the said criminal acts may be perpetrated, namely: no price display board, no weighing scale, no tare

weight or incorrect tare weight markings, no authorized LPG seal, no trade name, unbranded LPG

cylinders, no serial number, no distinguishing color, no embossed identifying markings on cylinder,

underfilling LPG cylinders, tampering LPG cylinders, and unauthorized decanting of LPG cylinders.

These specific acts and omissions are obviously within the contemplation of the law, which seeks to curb

the pernicious practices of some petroleum merchants.2.As for the second requirement, we find that the

Circular is in accord with the law. Under B.P. Blg.33, as amended, the monetary penalty for any person

who commits any of the acts aforestated is limited to a minimum of P20,000 and a maximum of P50,000.

Under the Circular, the maximum pecuniary penalty for retail outlets is P20,000, an amount within the

range allowed by law. However, for the refillers, marketers, and dealers, the Circular is silent as to

any maximum monetary penalty. This mere silence, nonetheless, does not amount to violation of the

aforesaid statutory maximum limit. Further, the mere fact that the Circular provides penalties on aper

cylinder basis does not in itself run counter to the law since all that B.P. Blg. 33 prescribes arethe minimum

and the maximum limits of

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