Marianne L.

Lalwani 1 Administrative Law

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-23825 EMMANUEL PELAE", Petitioner, vs. T#E AUD$TOR GENERAL, Respondent. CONCEPC$ON, J.: During the period from September 4 to October 29, 9!4 the President of the Philippines, purporting to act pursuant to Section !" of the Revised #dministrative $ode, issued %&ecutive Orders 'os. 9( to 2 , 24 and 2! to 29) creating thirt*+three ,((municipalities enumerated in the margin.1 Soon after the date last mentioned, or on 'ovember ., 9!4 petitioner %mmanuel Pelae/, as 0ice President of the Philippines and as ta&pa*er, instituted the present special civil action, for a 1rit of prohibition 1ith preliminar* in2unction, against the #uditor 3eneral, to restrain him, as 1ell as his representatives and agents, from passing in audit an* e&penditure of public funds in implementation of said e&ecutive orders and4or an* disbursement b* said municipalities. Petitioner alleges that said e&ecutive orders are null and void, upon the ground that said Section !" has been impliedl* repealed b* Republic #ct 'o. 2(5. and constitutes an undue delegation of legislative po1er. Respondent maintains the contrar* vie1 and avers that the present action is premature and that not all proper parties + referring to the officials of the ne1 political subdivisions in 6uestion + have been impleaded. Subse6uentl*, the ma*ors of several municipalities adversel* affected b* the aforementioned e&ecutive orders + because the latter have ta7en a1a* from the former the barrios composing the ne1 political subdivisions + intervened in the case. Moreover, #ttorne*s %nri6ue M. 8ernando and %mma 9uisumbing+8ernando 1ere allo1ed to and did appear as amici curiae. :he third paragraph of Section ( of Republic #ct 'o. 2(5., reads; <arrios shall not be created or their boundaries altered nor their names changed e&cept under the provisions of this #ct or b* #ct of $ongress. Pursuant to the first t1o ,2- paragraphs of the same Section (; #ll barrios e&isting at the time of the passage of this #ct shall come under the provisions hereof. =pon petition of a ma2orit* of the voters in the areas affected, a ne1 barrio ma* be created or the name of an e&isting one ma* be changed b* the provincial board of the province, upon recommendation of the council of the municipalit* or municipalities in 1hich the proposed barrio is stipulated. :he recommendation of the municipal council shall be embodied in a resolution approved b* at least t1o+thirds of the entire membership of the said council; Provided, ho1ever, :hat no ne1 barrio ma* be created if its population is less than five hundred persons. >ence, since ?anuar* , 9!., 1hen Republic #ct 'o. 2(5. became effective, barrios ma* @not be created or their boundaries altered nor their names changed@ e&cept b* #ct of $ongress or of the corresponding provincial board @upon petition of a ma2orit* of the voters in the areas affected@ and the @recommendation of the council of the municipalit* or municipalities in 1hich the proposed barrio is situated.@ Petitioner argues, accordingl*; @Af the President, under this ne1 la1, cannot even create a barrio, can he create a municipalit* 1hich is composed of several barrios, since barrios are units of municipalitiesB@ Respondent ans1ers in the affirmative, upon the theor* that a ne1 municipalit* can be created 1ithout creating ne1 barrios, such as, b* placing old barrios under the 2urisdiction of the ne1 municipalit*. :his theor* overloo7s, ho1ever, the main import of the petitionerCs argument, 1hich is that the statutor* denial of the presidential authorit* to create a ne1 barrio implies a negation of the bigger po1er to create municipalities, each of 1hich consists of several barrios. :he cogenc* and force of this argument is too obvious to be denied or even 6uestioned. 8ounded upon logic and e&perience, it cannot be offset e&cept b* a clear manifestation of the intent of $ongress to the contrar*, and no such manifestation, subse6uent to the passage of Republic #ct 'o. 2(59, has been brought to our attention. Moreover, section !" of the Revised #dministrative $ode, upon 1hich the disputed e&ecutive orders are based, provides; :he ,3overnor+3eneral- President of the Philippines ma* b* e&ecutive order define the boundar*, or boundaries, of an* province, subprovince, municipalit*, Dto1nshipE municipal district, or other political subdivision, and increase or diminish the territor* comprised therein, ma* divide an* province into one or more subprovinces, separate an* political division other than December 24, 1 !5

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a province, into such portions as ma* be re6uired, merge an* of such subdivisions or portions 1ith another, name an* ne1 subdivision so created, and ma* change the seat of government 1ithin an* subdivision to such place therein as the public 1elfare ma* re6uire; Provided, :hat the authori/ation of the ,Philippine Fegislature- $ongress of the Philippines shall first be obtained 1henever the boundar* of an* province or subprovince is to be defined or an* province is to be divided into one or more subprovinces. Ghen action b* the ,3overnor+3eneral- President of the Philippines in accordance here1ith ma7es necessar* a change of the territor* under the 2urisdiction of an* administrative officer or an* 2udicial officer, the ,3overnor+ 3eneral- President of the Philippines, 1ith the recommendation and advice of the head of the Department having e&ecutive control of such officer, shall redistrict the territor* of the several officers affected and assign such officers to the ne1 districts so formed. librar* =pon the changing of the limits of political divisions in pursuance of the foregoing authorit*, an e6uitable distribution of the funds and obligations of the divisions thereb* affected shall be made in such manner as ma* be recommended b* the ,Ansular #uditor- #uditor 3eneral and approved b* the ,3overnor+3eneral- President of the Philippines. Respondent alleges that the po1er of the President to create municipalities under this section does not amount to an undue delegation of legislative po1er, rel*ing upon Municipality of Cardona vs. Municipality of Binagonan ,(! Phil. H45-, 1hich, he claims, has settled it. Such claim is untenable, for said case involved, not the creation of a ne1 municipalit*, but a mere transfer of territory + from an already existing municipalit* ,$ardona- to another municipalit* ,<inaIgonan-, likewise, existing at t e time of and prior to said transfer ,See 3ovCt of the P.A. e& rel. Municipalit* of $ardona vs. Municipalit*, of <inaIgonan D(4 Phil. H ", H 9+H2. - + in conse6uence of the fi&ing and definition, pursuant to #ct 'o. 54", of the common boundaries of t1o municipalities. At is obvious, ho1ever, that, 1hereas the po1er to fi& such common boundar*, in order to avoid or settle conflicts of 2urisdiction bet1een ad2oining municipalities, ma* parta7e of an administrative nature + involving, as it does, the adoption of means and 1a*s to carry into effect the la1 creating said municipalities + the authorit* to create municipal corporations is essentiall* legislative in nature. An the language of other courts, it is @strictl* a legislative function@ ,State e& rel. >iggins vs. #ic7len, 9 S. 42H, ?anuar* 2, 9H9- or @solel* and exclusively the e&ercise of legislative po1er@ ,=dall vs. Severn, Ma* 29, 9(", 59 P. 2d (45+(49-. #s the Supreme $ourt of Gashington has put it ,:erritor* e& rel. Jell* vs. Ste1art, 8ebruar* (, "9., 2( Pac. 4.H, 4.9-, @municipal corporations are purely t e creatures of statutes.@ #lthough1% $ongress ma* delegate to another branch of the 3overnment the po1er to fill in the details in the e&ecution, enforcement or administration of a la1, it is essential, to forestall a violation of the principle of separation of po1ers, that said la1; ,a- be complete in itself + it must set forth therein the polic* to be e&ecuted, carried out or implemented b* the delegate 2 + and ,b- fi& a standard + the limits of 1hich are sufficientl* determinate or determinable + to 1hich the delegate must conform in the performance of his functions.2% Andeed, 1ithout a statutor* declaration of polic*, the delegate 1ould in effect, ma7e or formulate such polic*, 1hich is the essence of ever* la1) and, 1ithout the aforementioned standard, there 1ould be no means to determine, 1ith reasonable certaint*, 1hether the delegate has acted 1ithin or be*ond the scope of his authorit*. 2b >ence, he could thereb* arrogate upon himself the po1er, not onl* to ma7e the la1, but, also + and this is 1orse + to unma7e it, b* adopting measures inconsistent 1ith the end sought to be attained b* the #ct of $ongress, thus nullif*ing the principle of separation of po1ers and the s*stem of chec7s and balances, and, conse6uentl*, undermining the ver* foundation of our Republican s*stem. Section !" of the Revised #dministrative $ode does not meet these 1ell settled re6uirements for a valid delegation of the po1er to fi& the details in the enforcement of a la1. At does not enunciate an* polic* to be carried out or implemented b* the President. 'either does it give a standard sufficientl* precise to avoid the evil effects above referred to. An this connection, 1e do not overloo7 the fact that, under the last clause of the first sentence of Section !", the President; ... ma* change the seat of the government 1ithin an* subdivision to suc place t erein as t e public welfare may re!uire. At is apparent, ho1ever, from the language of this clause, that the phrase @as the public 1elfare ma* re6uire@ 6ualified, not the clauses preceding the one 2ust 6uoted, but only the place to 1hich the seat of the government ma* be transferred. :his fact becomes more apparent 1hen 1e consider that said Section !" 1as originall* Section of #ct 'o. 54",3 1hich provided that, @1henever in the 2udgment of the 3overnor+3eneral the public welfare re6uires, he ma*, b* e&ecutive order,@ effect the changes enumerated therein ,as in said section !"-, including the change of the seat of the government @to such place ... as the public interest re!uires.@ :he opening statement of said Section of #ct 'o. 54" + 1hich 1as not included in "ection !" of the Revised #dministrative $ode + governed the time at 1hich, or the conditions under 1hich, the po1ers therein conferred could be e&ercised) 1hereas the last part of the first sentence of said section referred exclusively to the place to 1hich the seat of the government 1as to be transferred. #t an* rate, the conclusion 1ould be the same, insofar as the case at bar is concerned, even if 1e assumed that the phrase @as the public 1elfare ma* re6uire,@ in said Section !", 6ualifies all other clauses thereof. At is true that in Calalang vs. #illiams ,5. Phil. 52!- and People vs. Rosent al ,!" Phil. (2"-, this $ourt had upheld @public 1elfare@ and @public interest,@ respectivel*, as sufficient standards for a valid delegation of the authorit* to e&ecute the la1. <ut, the doctrine laid do1n in these cases + as all 2udicial pronouncements + must be construed in relation to the specific facts and issues involved therein, outside of 1hich the* do not constitute precedents and have no binding effect.4 :he la1 construed in the $alalang case conferred upon the Director of Public Gor7s, 1ith the approval of the Secretar* of Public Gor7s and $ommunications, the po1er to issue rules and regulations to promote safe transit upon national roads and streets. =pon the other hand, the Rosenthal case referred to the authorit* of the Ansular :reasurer, under #ct 'o. 2H" , to issue and cancel certificates or permits for t e sale of speculative securities. <oth cases involved grants to

Marianne L. Lalwani 3 Administrative Law

administrative officers of po1ers related to the e&ercise of their administrative functions, calling for the determination of 6uestions of fact. Such is not the nature of the po1ers dealt 1ith in section !". #s above indicated, the creation of municipalities, is not an administrative function, but one 1hich is essentiall* and eminently legislative in character. :he 6uestion of 1hether or not @public interest@ demands the e&ercise of such po1er is not one of fact. it is @purely a legislative 6uestion @,$arolina+0irginia $oastal >igh1a* vs. $oastal :urnpi7e #uthorit*, 54 S.%. 2d. ( .+( (, ( H+( "-, or a political 6uestion ,=dall vs. Severn, 59 P. 2d. (45+(49-. #s the Supreme $ourt of Gisconsin has aptl* characteri/ed it, @the 6uestion as to 1hether incorporation is for the best interest of the communit* in an* case is emphaticall* a !uestion of public policy and statecraft@ ,An re 0illage of 'orth Mil1au7ee, !5 '.G. .((, .(H+ .(5-. 8or this reason, courts of 2ustice have annulled, as constituting undue delegation of legislative po1ers, state la1s granting the 2udicial department, the po1er to determine 1hether certain territories should be anne&ed to a particular municipalit* ,=dall vs. Severn, supra, 2H"+(H9-) or vesting in a $ommission the right to determine the plan and frame of government of proposed villages and 1hat functions shall be e&ercised b* the same, although the po1ers and functions of the village are specificall* limited b* statute ,An re Municipal $harters, "! #tl. (.5+(."-) or conferring upon courts the authorit* to declare a given to1n or village incorporated, and designate its metes and bounds, upon petition of a ma2orit* of the ta&able inhabitants thereof, setting forth the area desired to be included in such village ,:erritor* e& rel Jell* vs. Ste1art, 2( Pac. 4.H+4.9-) or authori/ing the territor* of a to1n, containing a given area and population, to be incorporated as a to1n, on certain steps being ta7en b* the inhabitants thereof and on certain determination b* a court and subse6uent vote of the inhabitants in favor thereof, insofar as the court is allo1ed to determine 1hether the lands embraced in the petition @ought 2ustl*@ to be included in the village, and 1hether the interest of the inhabitants 1ill be promoted b* such incorporation, and to enlarge and diminish the boundaries of the proposed village @as 2ustice ma* re6uire@ ,An re 0illages of 'orth Mil1au7ee, !5 '.G. .(H+ .(5-) or creating a Municipal <oard of $ontrol 1hich shall determine 1hether or not the la*ing out, construction or operation of a toll road is in the @public interest@ and 1hether the re6uirements of the la1 had been complied 1ith, in 1hich case the board shall enter an order creating a municipal corporation and fi&ing the name of the same ,$arolina+0irginia $oastal >igh1a* vs. $oastal :urnpi7e #uthorit*, 54 S.%. 2d. ( .-. Ansofar as the validit* of a delegation of po1er b* $ongress to the President is concerned, the case of "c ec ter Poultry Corporation vs. $.". ,59 F. %d. H5.- is 6uite relevant to the one at bar. :he Schechter case involved the constitutionalit* of Section ( of the 'ational Andustrial Recover* #ct authori/ing the President of the =nited States to approve @codes of fair competition@ submitted to him b* one or more trade or industrial associations or corporations 1hich @impose no ine6uitable restrictions on admission to membership therein and are trul* representative,@ provided that such codes are not designed @to promote monopolies or to eliminate or oppress small enterprises and 1ill not operate to discriminate against them, and 1ill tend to effectuate the polic*@ of said #ct. :he 8ederal Supreme $ourt held; :o summari/e and conclude upon this point; Sec. ( of the Recover* #ct is 1ithout precedent. At supplies no standards for an* trade, industr* or activit*. At does not underta7e to prescribe rules of conduct to be applied to particular states of fact determined b* appropriate administrative procedure. Anstead of prescribing rules of conduct, it authori/es the ma7ing of codes to prescribe them. 8or that legislative underta7ing, Sec. ( sets up no standards, aside from the statement of the general aims of rehabilitation, correction and e&pansion described in Sec. . An vie1 of the scope of that broad declaration, and of the nature of the fe1 restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting la1s for the government of trade and industr* throughout the countr*, is virtuall* unfettered. Ge thin7 that the code ma7ing authorit* thus conferred is an unconstitutional delegation of legislative po1er. Af the term @unfair competition@ is so broad as to vest in the President a discretion that is @virtuall* unfettered.@ and, conse6uentl*, tantamount to a delegation of legislative po1er, it is obvious that @public 1elfare,@ 1hich has even a broader connotation, leads to the same result. An fact, if the validit* of the delegation of po1ers made in Section !" 1ere upheld, there 1ould no longer be an* legal impediment to a statutor* grant of authorit* to the President to do an*thing 1hich, in his opinion, ma* be re6uired b* public 1elfare or public interest. Such grant of authorit* 1ould be a virtual abdication of the po1ers of $ongress in favor of the %&ecutive, and 1ould bring about a total collapse of the democratic s*stem established b* our $onstitution, 1hich it is the special dut* and privilege of this $ourt to uphold. At ma* not be amiss to note that t e executive orders in !uestion were issued after t e legislative bills for t e creation of t e municipalities involved in t is case ad failed to pass Congress . # better proof of the fact that the issuance of said e&ecutive orders entails the e&ercise of purel* legislative functions can hardl* be given. #gain, Section . , - of #rticle 0AA of our fundamental la1 ordains; :he President shall have control of all the e&ecutive departments, bureaus, or offices, e&ercise general supervision over all local governments as ma* be provided b* la1, and ta7e care that the la1s be faithfull* e&ecuted. :he po1er of control under this provision implies the right of the President to interfere in the e&ercise of such discretion as ma* be vested b* la1 in the officers of the e&ecutive departments, bureaus, or offices of the national government, as 1ell as to act in lieu of such officers. :his po1er is denied b* the $onstitution to the %&ecutive, insofar as local governments are concerned. Gith respect to the latter, the fundamental la1 permits him to 1ield no more authorit* than that of chec7ing 1hether said local governments or the officers thereof perform their duties as provided b* statutor* enactments. >ence, the President cannot interfere 1ith local

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governments, so long as the same or its officers act Githin the scope of their authorit*. >e ma* not enact an ordinance 1hich the municipal council has failed or refused to pass, even if it had thereb* violated a dut* imposed thereto b* la1, although he ma* see to it that the corresponding provincial officials ta7e appropriate disciplinar* action therefor. 'either ma* he vote, set aside or annul an ordinance passed b* said council 1ithin the scope of its 2urisdiction, no matter ho1 patentl* un1ise it ma* be. >e ma* not even suspend an elective official of a regular municipalit* or ta7e an* disciplinar* action against him, e&cept on appeal from a decision of the corresponding provincial board.5 =pon the other hand if the President could create a municipalit*, he could, in effect, remove an* of its officials, b* creating a ne1 municipalit* and including therein the barrio in 1hich the official concerned resides, for his office 1ould thereb* become vacant. ! :hus, b* merel* brandishing the po1er to create a ne1 municipalit* ,if he had it-, 1ithout actuall* creating it, he could compel local officials to submit to his dictation, thereb*, in effect, e&ercising over them the po1er of control denied to him b* the $onstitution. :hen, also, the po1er of control of the President over e&ecutive departments, bureaus or offices implies no more than the authorit* to assume directl* the functions thereof or to interfere in the e&ercise of discretion b* its officials. Manifestl*, suc control does not include t e aut ority eit er to abolis an executive department or bureau, or to create a new one . #s a conse6uence, the alleged po1er of the President to create municipal corporations 1ould necessaril* connote the e&ercise b* him of an authorit* even greater than that of control 1hich he has over the e&ecutive departments, bureaus or offices. An other 1ords, Section !" of the Revised #dministrative $ode does not merel* fail to compl* 1ith the constitutional mandate above 6uoted. Anstead of giving the President less po1er over local governments than that vested in him over the e&ecutive departments, bureaus or offices, it reverses the process and does the exact opposite, b* conferring upon him more po1er over municipal corporations than that 1hich he has over said e&ecutive departments, bureaus or offices. An short, even if it did entail an undue delegation of legislative po1ers, as it certainl* does, said Section !", as part of the Revised #dministrative $ode, approved on March ., 9 5, must be deemed repealed b* the subse6uent adoption of the $onstitution, in 9(H, 1hich is utterl* incompatible and inconsistent 1ith said statutor* enactment.& :here are onl* t1o ,2- other points left for consideration, namel*, respondentCs claim ,a- that @not all the proper parties@ + referring to the officers of the ne1l* created municipalities + @have been impleaded in this case,@ and ,b- that @the present petition is premature.@ #s regards the first point, suffice it to sa* that the records do not sho1, and the parties do not claim, that the officers of an* of said municipalities have been appointed or elected and assumed office. #t an* rate, the Solicitor 3eneral, 1ho has appeared on behalf of respondent #uditor 3eneral, is the officer authori/ed b* la1 @to act and represent the 3overnment of the Philippines, its offices and agents, in an* official investigation, proceeding or matter re6uiring the services of a la1*er@ ,Section !! , Revised #dministrative $ode-, and, in connection 1ith the creation of the aforementioned municipalities, 1hich involves a political, not proprietar*, function, said local officials, if an*, are mere agents or representatives of the national government. :heir interest in the case at bar has, accordingl*, been, in effect, dul* represented. 8 Gith respect to the second point, respondent alleges that he has not as *et acted on an* of the e&ecutive order K in 6uestion and has not intimated ho1 he 1ould act in connection there1ith. At is, ho1ever, a matter of common, public 7no1ledge, sub2ect to 2udicial cogni/ance, that the President has, for man* *ears, issued e&ecutive orders creating municipal corporations and that the same have been organi/ed and in actual operation, thus indicating, 1ithout peradventure of doubt, that the e&penditures incidental thereto have been sanctioned, approved or passed in audit b* the 3eneral #uditing Office and its officials. :here is no reason to believe, therefore, that respondent 1ould adopt a different polic* as regards the ne1 municipalities involved in this case, in the absence of an allegation to such effect, and none has been made b* him. G>%R%8OR%, the %&ecutive Orders in 6uestion are hereb* declared null and void ab initio and the respondent permanentl* restrained from passing in audit an* e&penditure of public funds in implementation of said %&ecutive Orders or an* disbursement b* the municipalities above referred to. At is so ordered. Beng%on, C.&., Bautista 'ngelo, Reyes, &.B.(., Barrera and )i%on, &&., concur. la1 librar* *aldivar, &., too7 no part.