Puyat et. al. vs. de Guzman and Acero, et. al.

G.R. No. L-51122 March 25, 1982

Facts:
International Pipe Industries Corporation (IPI) held an election for eleven Directors.
Justice Estanislao Fernandez (Assemblyman Fernandez), a member of Interim Batasang
Pambansa, is one of the elected Directors. When a quo warranto proceeding questioning the
election was instituted by the petitioners in the Securities and Exchange Commission (SEC),
Assemblyman Fernandez appeared as counsel for the respondents, to which the petitioner
objected on Constitutional grounds - Section 11, Article VIII of the 1973 Constitution
provided that no Assemblyman could appear as counsel before… any administrative body“.
Since SEC was an administrative body and the cited Constitutional prohibition being clear,
Fernandez did not continue his appearance for respondent.

The SEC found that Assemblyman Fernandez had purchased 10 shares of IPI for
P200.00 upon request of Acero, one of the respondents. Following the notarization of the
shares purchased, the Assemblyman Fernandez filed a motion for intervention in the SEC
case as the owner of 10 IPI shares alleging legal interest in the matter in litigation. SEC
granted the leave to intervene on the basis of Assemblyman Fernandez’ ownership of the said
10 shares. Because of this order, the petitioners then filed an instant petition for certiorari
and Prohibition with Preliminary Injunction.

Issue:
In intervening in the SEC case, is Assemblyman Fernandez, in effect, appearing as
counsel before an administrative body in contravention of the Constitutional provision?

Held:
Yes, Assemblyman Fernandez is, in intervening in the SEC case, in effect, appearing
as counsel before an administrative body The Supreme Court (SC) reversed and set aside the
order of the SEC and held that the intervention of Assemblyman Fernandez in the SEC case
falls within the ambit of the prohibition contained in Section 11, Article VIII of the 1973
Constitution.

Ordinarily, by virtue of the motion to intervene, Assemblyman Fernandez cannot be

said to be appearing as counsel as he is appearing for the protection of his ownership shares
in IPI in matters of litigation. However, in this case, the SC found that the shares he owns is
merely 10 shares out of 262,843 shares, that he acquired the said shares after the filing of the
quo warranto case, and that even before his motion for intervention he had already expressed
his intention to be the counsel for Acero group. The SC ruled that there has been “indirect”
appearance as counsel before an administrative body, and opined that this is a circumvention
of the Constitutional prohibition.

The SC also added that a ruling upholding the "intervention" would make the
constitutional provision ineffective because all an Assemblyman need to do, if he wants to
influence an administrative body is to acquire a minimal participation in the "interest" of the
client and then "intervene" in the proceedings.
 PAL vs. Civil Aeronautics Board and Grand International Airways, Inc.
G.R. No. 119528 March 26, 1997

Facts:

On November 24, 1994, Grand International Airways (GrandAir) applied for a Certificate of
Public Convenience and Necessity with the Civil Aeronautics Board. Accordingly, the Chief Hearing
Officer of the CAB issued a Notice of Hearing setting the application for initial hearing on December
16, 1994, and directing GrandAir to serve a copy of the application and corresponding notice to all
scheduled Philippine Domestic operators. On December 14, 1994, GrandAir filed its Compliance, and
requested for the issuance of a Temporary Operating Permit. PAL, a holder of a legislative franchise
to operate air transport services, filed an Opposition to the application for a Certificate of Public
Convenience and Necessity on December 16, 1995

On December 20, 1994, the Chief Hearing Officer of CAB issued an Order denying PAL’s
Opposition.

On December 23, 1994, the Board promulgated Resolution No. 119(92) approving the issuance of a
Temporary Operating Permit in favor of Grand Air for a period of three months (from December 22,
1994 to March 22, 1995). Petitioner moved for the reconsideration of the issuance of the Temporary
Operating Permit on January 11, 1995, but the same was denied in CAB Resolution No. 02 (95) on
February 2, 1995. 8

On March 21, 1995, upon motion by private respondent, the temporary permit was extended for a
period of six (6) months or up to September 22, 1995. Hence, the petitioner filed a special civil action
for Certiorari and Prohibition under Rule 65 of Rules of Court before the Supreme Court.

ISSUE:

Does the Congress, in enacting Republic Act 776, have delegated the authority to authorize the
operation of domestic air transport services to the respondent Board, such that Congressional mandate
for the approval of such authority is no longer necessary?

RATIO

Yes, the Congress has the delegated authority to authorize the operation of domestic air transport
services to the respondent board. Congress has granted certain administrative agencies the power to
grant licenses for, or to authorize the operation of certain public utilities. To this effect, the Civil
Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or
Temporary Operating Permit to a domestic air transport operator, who, though not possessing a
legislative franchise, meets all the other requirements prescribed by the law. Such requirements were
enumerated in Section 21 of R.A. 776.

There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an
indispensable requirement for an entity to operate as a domestic air transport operator. Although
Section 11 of Article XII recognizes Congress' control over any franchise, certificate or authority to
operate a public utility, it does not mean Congress has exclusive authority to issue the same.
Franchises issued by Congress are not required before each and every public utility may operate. In
many instances, Congress has seen it fit to delegate this function to government agencies, specialized
particularly in their respective areas of public service.
Congress, by giving the respondent Board the power to issue permits for the operation of domestic
transport services, has delegated to the said body the authority to determine the capability and
competence of a prospective domestic air transport operator to engage in such venture. This is not an
instance of transforming the respondent Board into a mini-legislative body, with unbridled authority
to choose who should be given authority to operate domestic air transport services.

To be valid, the delegation itself must be circumscribed by legislative restrictions, not

a "roving commission" that will give the delegate unlimited legislative authority. It
must not be a delegation "running riot" and "not canalized with banks that keep it
from overflowing." Otherwise, the delegation is in legal effect an abdication of
legislative authority, a total surrender by the legislature of its prerogatives in favor of
the delegate. 23

Congress, in this instance, has set specific limitations on how such authority should be exercised as
Section 4 of R.A. No. 776, as amended, sets out the guidelines or policies to be followed. More
importantly, the said law has enumerated the requirements to determine the competency of a
prospective operator to engage in the public service of air transportation. Furthermore, the procedure
for the processing of the application of a Certificate of Public Convenience and Necessity had been
established to ensure the weeding out of those entities that are not deserving of public service.

In sum, the Supreme Court directed respondent Civil Aeronautics Board to continue hearing the
application of respondent Grand International Airways, Inc. for the issuance of a Certificate of Public
Convenience and Necessity.