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MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING CLUB , INC., Petitioners, vs.

THE COURT OF APPEALS AND PHILIPPINE RACING COMMISSION, Respondents. DECISION QUISUMBING, J.: This is a Petition for Review on Certiorari seeking the reversal of the decision1 of the Court of Appeals in CA-G.R. SP No. 25251 dated September 17, 1991 and the resolution 2 dated January 8, 1992, which denied the motion for reconsideration. At issue here is the control and disposition of breakages3 in connection with the conduct of horse-racing. The pertinent facts on record are as follows: On June 18, 1948, Congress approved Republic Act No. 309, entitled An Act to Regulate HorseRacing in the Philippines. This Act consolidated all existing laws and amended inconsistent provisions relative to horse racing. It provided for the distribution of gross receipts from the sale of betting tickets, but is silent on the allocation of so-called breakages. Thus the practice, according to the petitioners, was to use the breakages for the anti-bookies drive and other sales promotions activities of the horse racing clubs. On October 23, 1992, petitioners, Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI), were granted franchises to operate and maintain race tracks for horse racing in the City of Manila and the Province of Rizal by virtue of Republic Act Nos. 6631 and 6632, respectively, and allowed to hold horse races, with bets, on the following dates: x x x Saturdays, Sundays and official holidays of the year, excluding Thursdays and Fridays of the Holy Week, June twelfth, commonly known as Independence Day, Election Day and December thirtieth, commonly known as Rizal Day. (Sec. 5 of R.A. 6631) x x x Saturdays, Sundays, and official holidays of the year, except on those official holidays where the law expressly provides that no horse races are to be held. The grantee may also conduct races on the eve of any public holiday to start not earlier than five-thirty (5:30) oclock in the afternoon but not to exceed five days a year. (Sec. 7 of R.A. 6632) Said laws carried provisions on the allocation of breakages to beneficiaries as follows: Franchise Laws R. A. 66314 R. A. 66325

(for MJCI) (for PRCI) Provincial or city hospitals 25% Rehabilitation of drug addicts 25% 50% For the benefit of Philippine Amateur Athletes Federation 50% 25% Charitable institutions 25% On March 20, 1974, Presidential Decree No. 420 was issued creating the Philippine Racing Commission (PHILRACOM), giving it exclusive jurisdiction and control over every aspect of the conduct of horse racing, including the framing and scheduling of races. 6 By virtue of this power, the PHILRACOM authorized the holding of races on Wednesdays starting on December 22, 1976.7 In connection with the new schedule of races, petitioners made a joint query regarding the ownership of breakages accumulated during Wednesday races. In response to the query, PHILRACOM rendered its opinion in a letter dated September 20, 1978. It declared that the breakages belonged to the racing clubs concerned, to wit: We find no further need to dissect the provisions of P.D. 420 to come to a legal conclusion. As can be clearly seen from the foregoing discussion and based on the established precedents, there can be no doubt that the breakage of Wednesday races shall belong to the racing club concerned.8 Consequently, the petitioners allocated the proceeds of breakages for their own business purpose. Thereafter, PHILRACOM authorized the holding of races on Thursdays from November 15, 1984 to December 31, 1984, and on Tuesdays since January 15, 1985 up to the present. These midweek races are in addition to those days specifically mentioned in R.A. 6631 and R.A. 6632. Likewise, petitioners allocated the breakages from these races for their own uses. On December 16, 1986 President Corazon Aquino amended certain provisions Sec. 4 of R.A. 6631 and Sec. 6 of R.A. 6632 through Executive Orders No. 88 and 89. Under these Executive Orders, breakages were allocated to beneficiaries, as follows: Franchise Laws E. O. 899 E.O. 8810

(for MJCI) (for PRCI) Provincial or city hospitals 25% Rehabilitation of drug addicts 25% 50% For the benefit of Philippine Racing Commission 50% 25% Charitable institutions 25% On April 23, 1987, PHILRACOM itself addressed a query to the Office of the President asking which agency is entitled to dispose of the proceeds of the breakages derived from the Tuesday and Wednesday races. In a letter dated May 21, 1987, the Office of the President, through then Deputy Executive Secretary Catalino Macaraig, Jr., replied that the disposition of the breakages rightfully belongs to PHILRACOM, not only those derived from the Saturday, Sunday and holiday races, but also from the Tuesday and Wednesday races in accordance with the distribution scheme prescribed in said Executive Orders.11 Controversy arose when herein respondent PHILRACOM, sent a series of demand letters to petitioners MJCI and PRCI, requesting its share in the breakages of mid-week-races and proof of remittances to other legal beneficiaries as provided under the franchise laws. On June 8, 1987, PHILRACOM sent a letter of demand to petitioners MJCI and PRCI asking them to remit PHILRACOMs share in the breakages derived from the Tuesday, Wednesday and Thursday races in this wise: xxx Pursuant to Board Resolution dated December 21, 1986, and Executive Order Nos. 88 and 89 series of 1986, and the authority given by the Office of the President dated May 21, 1987, please remit to the Commission the following: 1) PHILRACOMs share in the breakages derived from Wednesday racing for the period starting December 22, 1976 up to the December 31, 1986. 2) PHILRACOMs share in the breakages derived from Thursday racing for the period starting November 15, 1984 up to December 31, 1984; and 3) PHILRACOMS share in the breakages derived from Tuesday racing for the period starting January 15, 1985 up to December, 1986.

they filed a Petition for Declaratory Relief before the Regional Trial Court.14 On April 25. and ruled as follows: xxx The decision on the part of PHILRACOM to authorize additional racing days had the effect of widening the scope of Section 5 of RA 6631 and Section 7 of RA 6632. disposing as follows: WHEREFORE. raising the lone question of whether or not E. and in view of all the foregoing considerations. 1988. However. the Court hereby declares and decides as follows: a) Executive Orders Nos. and the Philippine Racing Club. 88 and 89 cover breakages derived from the mid-week races. Consequently. and b) The ownership by the Manila Jockey Club. we referred the case to the Court of Appeals. Petitioners averred that there was an actual controversy between the parties. PHILRACOM reiterated its previous demand embodied in its letter of April 25. which should be resolved. Again. 1987 opinion of then Deputy Executive Secretary Macaraig. 1987 and April 11.17 Dissatisfied. 1988. 1990. private . as declared and affirmed by the Office of the President in its letters dated May 21. but the same was denied by the Office of the President in its letter dated April 11. 1991. 88 and 89 do not and cannot cover the disposition and allocation of mid-week races. Nos. 1987. Wednesdays and those which are not authorized under Republic Acts 6631 and 6632.4) Kindly furnish the Commission with the breakdown of all breakages derived from Tuesdays. Thursdays and Wednesdays racing that you have remitted to the legal beneficiaries. 1978 and the present position of PHILRACOM. Instead. petitioners MJCI and PRCI sought reconsideration 13 of the May 21. the trial court rendered judgment.[12 On June 16. Branch 150 of Makati. Inc. on the ground that there is a conflict between the previous opinion of PHILRACOM dated September 20. on June 13. particularly those authorized to be held during Tuesdays. which eventually reversed the decision of the trial court. PHILRACOM wrote another letter15 to the petitioners MJCI and RCI seeking the remittance of its share in the breakages.16 Petitioners ignored said demand. 1988. 1988. respondent PHILRACOM filed a Petition for Certiorari with prayer for the issuance of a writ of preliminary injunction before this Court. with the reminder that the breakages should be strictly and wholly utilized for the purpose for which ownership thereof has been vested upon said racing entities. O. of the breakages they derive from mid-week races shall not be disturbed. SO ORDERED. On March 11. Inc.

O. 88 to cover the disposition and allocation of breakages derived on all races conducted by private respondents on any racing day. 6632. 2. and for reasons indicated. the judgment of the trial court is hereby SET ASIDE. We have no disagreement with the respondents.D. a government agency. Nos. 1986 were R.A.A. ordering private respondents to remit to PHILRACOM its share under E. 88 and E. Since respondents admit that PHILRACOM (Petitioner) was merely placed in lieu of PAAF as beneficiary/recipient of breakages. then whatever breakages was due to PAAF as one of the beneficiaries under R.18 xxx WHEREFORE. Decision is hereby rendered: 1. with respondent Court of Appeals further declaring that: xxx In so far as the prospective application of Executive Orders Nos. 420. which specifically apportion the breakages to specified beneficiaries among which was the PAAF. 6631 and 6632 accrued to or should belong to PHILRACOM as successor to the defunct PAAF. Neither was there a special provision set to govern those mid-week races.O.19 Petitioners filed a motion for reconsideration. 88 and 89 is concerned.O. Thursdays as authorized by PHILRACOM. There was no need for any new provisions because there are enough general provisions to cover them. Since PHILRACOM became the beneficiary of the breakages only upon effectivity of Executive Order Nos.O. but it was denied for lack of merit. The provisions on the disposition and allocation of breakages being general in character apply to breakages derived on any racing day. whether as provided for under Section 4 of RA 6631 or Section 6 of RA 6632 or as ordered by PHILRACOM in the exercise of its powers under P. we do not concede that respondents are entitled to breakages prior to December 16. the Motion is denied. declaring Section 4 of RA 6631 as amended by E. 6631 and R. 89 derived from races held on Tuesdays. 1986 because it is clear that the applicable laws from 1976 to December 16.A. 88 and 89. . 89 and Section 6 of RA 6632 as amended by E. Finding the Motion for Reconsideration without merit. it is therefore entitled to such breakages from December 16. However. Wednesdays. No provision of law became inconsistent with the passage of the Order granting additional racing days. 1986 when said Executive Orders were issued. based on the foregoing analysis and interpretation of the laws in question. The reason is simple. SO ORDERED.respondents derive their privilege to hold races on the designated days not only from their franchise acts but also from the order issued by the PHILRACOM.

should the petitioners remit the money from the time the mid-week races started. it may not by interpretation or construction be extended to other matters. hence. as amended.D. 309. R. 6631 and 6632. there is no doubt that the breakages of Wednesday races shall belong to the racing clubs concerned. or only upon the promulgation of E. respondent PHILRACOM contends that R. a franchise partakes of a double nature and character.A. 22 However. They claim that disposition of breakages under these laws should be limited to races conducted on all Saturdays. 88 and 89? Petitioners assert that franchise laws should be construed to apply the distribution scheme specifically and exclusively to the racing days enumerated in Sec. the franchises given to the petitioners remained the same. a franchise springs from contracts between the sovereign power and the private corporation for purposes of individual advantage as well as public benefit.28 The legislature may prescribe the conditions and terms upon which it may be held. as amended by E. 420 . Franchise laws are privileges24 conferred by the government on corporations to do that which does not belong to the citizens of the country generally by common right.21 They even advance the view that where a statute by its terms is expressly limited to certain matters. 5 of R.O. on those official holidays where the law expressly provides that no horse races are to be held.A. it is public juris and subject to governmental control. Therefore.A.29 As grantees of a franchise.23 When PHILRACOM added mid-week races. petitioners derive their existence from the same.A. 7 of R. Sundays. and official holidays of the year. 6631.26 Thus. 88 and 89. Logically.A.25 As a rule. 6631 and 6632 are laws intended primarily to grant petitioners their respective franchises to construct. Nos. 6632. if the authorized racing days are extended. The main issue brought by the parties for the Courts resolution is: Who are the rightful beneficiaries of the breakages derived from mid-week races? This issue also carries an ancillary question: assuming PHILRACOM is entitled to the mid-week breakages under the law. except. Petitioners operations are governed by all existing rules relative to horse racing provided they are not inconsistent with each other and could be reasonably harmonized. because these are general provisions which apply general rules and procedures governing the operation of the races. and the duty of grantee to the public exercising it. these races must therefore be governed by the same rules and provisions generally provided therein. namely mid-week races.20 Consequent to the aforequoted adverse decision. what applies to races authorized under Republic Act Nos. and maintain a race track for horse racing.SO ORDERED. Nos.O. P.27 In so far as it affects or concerns the public. We find petitioners position on the main issue lacking in merit and far from persuasive. the applicable laws are R. petitioners MJCI and PRCI filed this petition for review under Rule 45. 6631 and 6632 should also apply to races additionally authorized by PHILRACOM. and Sec. Consequently. operate.

32 Now. This principle is expressed in the legal maxim interpretare et concordare leges legibus est optimus interpretandi. 6631 and 6632 had ceased operation. by force of law. Petitioners should therefore remit the proceeds of breakages to those benefactors designated by the aforesaid laws. 1986. the granting of the mid-week races does not require another legislative act to reiterate the manner of allocating the proceeds of betting tickets. 88 and 89. the period for the remittance of breakages to the beneficiaries should have commenced from the time PHILRACOM authorized the holding of mid-week races because R. They opine that since laws operate prospectively unless the legislator intends to give them retroactive effect. No law can be viewed in a condition of isolation or as the beginning of a new legal system.O. the person obtaining it is. every statute should be construed in such a way that will harmonize it with existing laws. Nos.A. the accrual of these breakages should start on December 16. 6631 and 6632 were already in effect then. considered a trustee of an implied trust for the benefit of the person from whom the property comes. Nos. . When the petitioners mistakenly appropriated the breakages for themselves. or a section thereof.and the orders issued by PHILRACOM. Since this new schedule became part of R. 6631 and 6632. Nos. The petitioners contend that they cannot be held retroactively liable to respondent PHILRACOM for breakages prior to the effectivity of E. as provided by R. Proceeding to the subsidiary issue. that is.A. Nos. A fortiori. or give additional power to enforce its provisions. 88 and 89 was to favor the respondent PHILRACOM anew with the benefits which formerly had accrued in favor of Philippine Amateur Athletic Federation (PAAF). are the rightful beneficiaries of breakages from mid-week races. 88 and 89. The holding of horse races on Wednesdays is in addition to the existing schedule of races authorized by law. Neither does the allocation of breakages under the same provision need to be isolated to construe another distribution scheme. In enacting a particular statute. This is in consonance with Article 1456 of the Civil Code. the date of effectivity of E. the PAAF. 30 A reasonable reading of the horse racing laws favors the determination that the entities enumerated in the distribution scheme provided under R. Nos. it is still not proper for the petitioners to presume that they were entitled to PAAFs share. 1456If property is acquired through mistake or fraud. they became the implied trustees for those legally entitled to the proceeds. legislators are presumed to have full knowledge and to have taken full cognizance of the existing laws on the same subject or those relating thereto. which provides that: Art. and its effect is not to change in any way the provisions of the latter but merely to extend the operation thereof.O.A. They assert that the real intent behind E.A. 6631 and 6632 the set of procedures in the franchise laws applicable to the conduct of horse racing business must likewise be applicable to Wednesday or other mid-week races.O. Consequently. as amended by Executive Orders 88 and 89. to interpret and to do it in such a way as to harmonize laws with laws is the best method of interpretation. as the case may be. even if one of the benefactors of breakages.31 A supplemental law becomes an addition to the existing statutes.

The petitioners should have properly set aside the amount for the defunct PAAF. 88] xxx Sec. are hereby constituted into a TRUST FUND to be used exclusively for the payment of additional prizes for races sponsored by the Philippine Racing Commission and for the necessary capital outlays and other expenses relative to horse-breeding activities of the National Stud Farm. until an alternative beneficiary was designated. not remitted by the Philippine Racing Club. 2 . which as subsequently provided for by Executive Order Nos. No. Inc. the well-entrenched principle is that the State could not be estopped by a mistake committed by its officials or agents.. [E. Nor could we be oblivious to the reality that horse racing although authorized by law is still a form of gambling. not remitted by the Manila Jockey Club. 34Although there was an initial interpretation of the law by PHILRACOM. x x x x x x. all cash balances and accumulated amounts corresponding to the share of the Philippine Amateur Athletic Federation/Ministry of Youth and Sports Development.. 6632. pursuant to Section 6 of Republic Act No. No.35 For this reason. 89] While herein petitioners might have relied on a prior opinion issued by an administrative body. pursuant to Republic Act No.O. a court of law could not be precluded from setting that interpretation aside if later on it is shown to be inappropriate. 88 and 89. For as well said in Lim vs. Inc. 2. the detrimental consequences of depriving the city hospitals and other institutions of the funds needed for rehabilitation of drug dependents and other patients are all too obvious. is PHILRACOM: xxx Secs. Any provision of law to the contrary notwithstanding. legislative franchises impose limitations on horse racing and betting. Petitioners contention that a gambling franchise is a public contract protected by the Constitutional provision on non-impairment of contract could not be left unqualified. Moreover.33 Well-settled also is the rule that the erroneous application of the law by public officers does not prevent a subsequent correct application of the law. Gambling is essentially antagonistic to the aims of enhancing national productivity and self-reliance./Manila Jockey Club Inc. x x x x x x [E. Pacquing:36 .O.All the cash balances and accumulated amounts corresponding to the share of the Philippine Amateur Athletic Federation/Ministry of Youth and Sports Development. 6631. It goes without saying that the allocation of breakages in favor of said institutions is a policy decision in pursuance of social development goals worthy of judicial approbation. are hereby transferred to the Philippine Racing Commission to be constituted into a TRUST FUND to be used exclusively for the payment of additional prizes for races sponsored by the Commission and for necessary capital outlays and other expenses relative to horse-breeding activities of the National Stud Farm.

pp. rollo. and the instant petition is hereby DENIEDfor lack of merit. Aldecoa. Vitug. Melo. C. For example the dividends due on a winning ticket is ten pesos and ninety-eight centavos. ... Jr. Mendoza. 3 Breakages are the fractions of ten centavos eliminated from the dividend of winning tickets. Davide.R.38 WHEREFORE. there being no reversible error. commonly known as breakage. 6631 x x x The receipts from betting corresponding to the fractions of ten centavos eliminated from the dividends paid to the winning tickets. and Filemon H. Costs against petitioners.. Jr. the appealed decision and the resolution of the respondent Court of Appeals in CA-G. 2 Rollo. 25251. subject to the condition that the funds shall be used exclusively for the training of Filipino athletes who will participate in international sports contests. SP No.37 That is why we need to stress anew that a statute which authorizes a gambling activity or business should be strictly construed. Endnotes: 1 Decision of the Court of Appeals penned by Associate Justice Jose C. (Chairman). SO ORDERED. R. pp. are hereby AFFIRMED. Campos. twenty-five per centum (25%) for the rehabilitation of drug addicts as provided in Republic Act Numbered Sixty-four hundred and twenty-five and fifty per centum (50%) for the benefit of the Philippine Amateur Athletic Federation. more importantly. shall be set aside as follows: twenty-five per centum (25%) to the provincial or city hospitals where the race track is located. the fraction of ten centavos or eight centavos shall be deducted from the dividends and set aside as part of breakages. concur. and Panganiban JJ.J. 4. a gambling franchise is always subject to the exercise of police power for the public welfare.x x x it should be remembered that a franchise is not in the strict sense a simple contract but rather it is. Jr. 49-50. Thus. a mere privilege specially in matters which are within the governments power to regulate and even prohibit through the exercise of the police power. concurred in by Associate Justice Venancio D.A. and every reasonable doubt be resolved so as to limit rather than expand the powers and rights claimed by franchise holders under its authority. 4 SEC. 40-47.

shall be set aside as follows: twenty-five per centum (25%) to the provincial or city hospitals where the race track is located. commonly known as breakage. as amended. x x x The receipts from betting corresponding to the fractions of less than ten centavos eliminated from the dividends paid to the winning tickets. 6631) reads: 7 8 9 Sec. (25%) for the operations expenses of the Philippine Amateur Athletic Federation. shall be set aside as follows: twenty-five per centum. x x x The receipts from betting corresponding to the fractions of less than ten (10) centavos eliminated from the dividends paid to the winning tickets. shall be set aside as follows: Twenty-five per centum (25%) for the benefit of the Philippine Racing Commission subject to the condition that the funds shall be used exclusively for the payment of additional prizes for races sponsored by the Philippine Racing Commission and for necessary capital outlays and other expense relative to horse-breeding activities of the National Stud Farm which is now under the Philippine Racing Commission. . 88 (amending Sec.A. 6.A. 6632. twenty-five per centum (25%) for the charitable institutions within the Municipality of Makati. as provided in Republic Act Numbered Six thousand four hundred and twentyfive. and fifty per centum (50%) for the rehabilitation of drug addicts. Ibid. 89 (amending Sec.5 Section 6. commonly known as breakage. 420.D. and fifty per centum (50%) for the benefit of the Philippine Racing Commission. R. p. as provided in Republic Act Numbered Six Thousand Four Hundred twenty-five. 6 of R. 8 of P.A. Section 4 of Executive Order No. 6632) provides: Sec. and fifty per centum (50%) for the rehabilitation of drug addicts. 52. twenty-five per centum (25%) for the rehabilitation of drug addicts as provided in Republic Act Numbered Sixty-four hundred and twenty-five. Rollo. 10 Section 1 of Executive Order No. x x x The receipts from betting corresponding to the fractions of ten (10) centavos eliminated from the dividends paid to the winning tickets. 42. subject to the condition that the funds shall be used exclusively for the payment of additional prizes for races sponsored by the Philippine Racing Commission and for the necessary capital outlays and other expenses relative to horse-breeding activities of the National Stud Farm which is now under the Philippine Racing Commission. commonly known as breakage. 4. citing Sec. 6 Rollo p. twenty-five per centum (25%) for the charitable institutions within the Municipality of Makati. 4 of R.

as Director of the Bureau of Animal Industry. The respondent demurred to the petition on the ground that it did not state facts sufficient to constitute a cause of action. OSTRAND. 1924. however. 3052 would automatically become effective . the petitioner would not be entitled to the relief demanded because Act No. the Governor-General. 2. it shall be strictly prohibited to import. as shown by an explanatory note and text of Senate Bill No. requiring him to issue a permit for the landing of ten large cattle imported by the petitioner and for the slaughter thereof. Approved. 3155 were declared unconstitutional and void. Among other things in the allegation of the petition. Stanton Youngberg.: This is a petition brought originally before the Court of First Instance of Manila for the issuance of a writ of mandatory injunction against the respondent. may raise such prohibition entirely or in part if the conditions of the country make this advisable or if decease among foreign cattle has ceased to be a menace to the agriculture and live stock of the lands. . Jose Yulo for appellant. SEC. STANTON YOUNGBERG. nineteen hundred and twenty-five existing contracts for the importation of cattle into this country to the contrary notwithstanding. petitioner-appellant. 3155.. This Act shall take effect on its approval. (1) that if Act No. respondent-appellee.MAURICIO CRUZ. it is asserted that "Act No. SEC. After March thirty-first. That at any time after said date. Director of the Bureau of Animal Industry. Office of the Solicitor-General Reyes for appellee. The petitioner attacked the constitutionality of Act No. bring or introduce into the Philippine Islands any cattle from foreign countries: Provided. with the concurrence of the presiding officers of both Houses. 3155 of the Philippine Legislature was enacted for the sole purpose of preventing the introduction of cattle diseases into the Philippine Islands from foreign countries. . namely. which at present prohibits the importation of cattle from foreign countries into the Philippine Islands." The Act in question reads as follows: SECTION 1.. March 8. All acts or parts of acts inconsistent with this Act are hereby repealed. 3. 328 as introduced in the Philippine Legislature. vs. J. The demurrer was based on two reasons.

prior to authorizing its transfer to other provinces. The appellee contends that even if Act No." SEC. suspend. 3155 be declared unconstitutional by the fact alleged by the petitioner in his complaint. the Governor-General shall issue regulations and others to provide against a raising of the price of both fresh and refrigerated meat. 3155 were declared unconstitutional. shall be submitted to regulations issued by the Director of Agriculture.and would prohibit the respondent from giving the permit prayed for. 3155 was constitutional and. "At the time of the approval of this Act. 3052 would automatically become effective. From that order of dismissal. Act No. bringing or introduction of which into the Islands is authorized by this Act. further. by executive order. The court sustained the demurrer and the complaint was dismissed by reason of the failure of the petitioner to file another complaint. bring or introduce live cattle into the Philippine Islands from any foreign country. 3052 to show its nullity or unconstitutionality though it appears clearly that in the absence of Act No. 1922. This Act shall take effect six months after approval. authorize the importation. 1762. Act No. 2. still the petitioner can not be allowed to import cattle from Australia for the reason that. bringing or introduction of various classes of thoroughbred cattle from foreign countries for breeding the same to the native cattle of these Islands. is hereby amended to read as follows: "SEC. while Act No. — It shall be unlawful for any person or corporation to import. The Governor-General also may. valid. the petitioner appealed to this court. and such as may be necessary for the improvement of the breed. therefore. Section seventeen hundred and sixty-two of Act Numbered Twentyseven hundred and eleven. not to exceed five hundred head per annum: Provided. known as the Administrative Code. That all live cattle from foreign countries the importation. 3052 reads as follows: SECTION 1. with the approval of the head of the department first had. bringing or introduction of draft cattle and bovine cattle for the manufacture of serum:Provided. this prohibition for a fixed period in case local conditions require it. The petitioner does not present any allegations in regard to Act No. and (2) that Act No. Bringing of animals imported from foreign countries into the Philippine Islands. The Director of Agriculture may. with the approval of the head of the department. That the Director of Agriculture shall in all cases permit the importation. Approved. March 14. however. 3155 the former act would make it impossible for the Director of the Bureau of Animal Industry to grant .

But aside from the provisions of Act No. Wilmington and Zanesville Railroad Co. Hamlin... 58 Ill.J. at his discretion. 187 U. p. Orange Country vs. the prohibition provided in the act constitutes an unlawful delegation of the legislative powers. 3155 is entirely valid. Carr vs.R. (6 R. 32 Pac. 152. Aldanese and Trinidad. Colorado. (I Lewis Sutherland. is between the delegation of power to make the law. as Judge Ranney of the Ohio Supreme Court in Cincinnati. 357. 1902. 11 L. 6 R. 3155 to the Governor-General to suspend or not.. 594. As shown in paragraph 8 of the amended petition. citing McAllister vs. 137. the Legislature passed Act No. It is now generally recognized that the promotion of industries affecting the public welfare and the development of the resources of the country are objects within the scope of the police power (12 C.L. 370. 214). 243 and decisions cited therein. 83 Cal. Olsen & Co. did not have the effect of denying to the Government of the Philippine Islands the right to the exercise of the sovereign police power in the promotion of the general welfare and the public interest.) This court has several times declared that it will not pass upon the constitutionality of statutes unless it is necessary to do so (McGirr vs.. the petitioner would not be entitled to relief inasmuch as Act No. 3052 is not in issue.)1awphil.. 600. Commissioners of Clinton County (1 Ohio St. 97 Cal. Harris. That being so. Ferriols and Provincial Board of Batangas (19 Phil.C. Hamilton and Abreu. therefore. vs. since. 88) said in such case: The true distinction. In this connection it is said in the case of Punzalan vs. which necessarily involves a discretion as to what it shall be..L. 147. etc.. 254). vs. Statutory Construction 2nd ed. 361. 259) but in this case it is not necessary to pass upon the validity of the statute attacked by the petitioner because even if it were declared unconstitutional. 30 Phil.... 23 Pac. we are of the opinion that Act No. 43 Phil. it is not inconsistent with such former laws. 3052. 568. An unconstitutional statute can have no effect to repeal former laws or parts of laws by implication.C. The facts recited in paragraph 8 of the amended petition shows that at the time the Act No. it is not for this court to avoid or vacate the Act upon constitutional grounds nor will it assume to determine whether the measures are wise or the best that might have been adopted.. that the provisions of the Act of Congress of July 1. being void. Reid vs.. 563.net In his third assignment of error the petitioner claims that "The lower court erred in not holding that the power given by Act No. State. 458. 204.. 927. 203-206 and decisions cited therein.S. Yeazel vs. 3155 to protect the cattle industry of the country and to prevent the introduction of cattle diseases through importation of foreign cattle.A. 127 Ind." We do not think that such is the case.. Walter E.. Alexander.the petitioner a permit for the importation of the cattle without the approval of the head of the corresponding department. and conferring an . 3155 was promulgated there was reasonable necessity therefor and it cannot be said that the Legislature exceeded its power in passing the Act. 77..

judgment is rendered for the plaintiff on the complaint and the defendant is ordered to further credit the plaintiff the amounts collected as 10% penalty in the sum of P19. 453. 1971 rendered by the Court of First Instance of Manila. 3155 is not an absolute prohibition of the importation of cattle and it does not add any provision to section 3 of the Tariff Law. 1977 for decision by this Court is this appeal from the decision dated January 6. DECISION PARAS. 63 Law. 82 N. 228 for distinction between `supplemental' and `amendatory' and O'Pry vs.88 or up to July 15. It does not make any reference to the Tariff Law. PLAINTIFF-APPELLEE. for distinction between `addition' and `amendment. 626. Branch III in Civil Case No." The facts of the case based on the parties' stipulation of facts (Record on Appeal. J.335. TAYUG RURAL BANK. It is not a tariff measure but a quarantine measure. p. 169 Ind. So ordered. to be exercised under and in pursuance of the law. whose importation is prohibited by the Tariff Law.S. a statute adopted under the police power of the Philippine Government. U. With respect to defendant's counterclaim.88 collected as 10% penalty.')" The decision appealed from is affirmed with the costs against the appellant. As stated in the brief of the Attorney-General: "It is a complete statute in itself. From this amount shall be deducted the sum of P19. 249 U. The first cannot be done. 76920. 323. CENTRAL BANK OF THE PHILIPPINES. judgment is hereby rendered against the plaintiff and the defendant is ordered to pay the Central Bank of the Philippines the outstanding balance of its past overdue accounts in the sum of P444. VS.. Babcock. 3155 amends section 3 of the Tariff Law. Under his fourth assignment of error the appellant argues that Act No.809.45 plus accrued interest at the rate of 1/2 of 1% per annum with respect to the promissory notes (Annexes 1 to 1-E of defendant's Answer) and 2-1/2% per annum with respect to the promissory notes (Annexes 1-f to 1-i of the Answer). DEFENDANT-APPELLANT. It does not permit the importation of articles.E. (See MacLeary vs.. 1969 and to refrain from collecting the said 10% penalty on the remaining past due loans of plaintiff with the defendant. 455.335. are as follows: ...: Submitted on May 20.S. ed. 67). but it will be noted that Act No. It is at most a `supplement' or an `addition' to the Tariff Law. the decretal portion of which states as follows: "WHEREFORE. to the latter no valid objection can be made..authority or discretion as to its execution.

96). (Record on Appeal p.Plaintiff-Appellee. in its Order dated March 3. 56). On December 23. amounting to P813. pp. finding no controverted facts and taking note of the statement of the lower court in its . During the period from December 28. is a banking corporation in Tayug.45 plus accrued interest and penalty at 10% per annum on the outstanding balance until full payment. Appellee Rural Bank sued Appellant in the Court of First Instance of Manila. to recover the 10% penalty imposed by Appellant amounting to P16. Central Bank of the Philippines.809. 1963. In its Memorandum filed on November 11.874. 34). 2 and 3).. stating that it was legally imposed under the provisions of Section 147 and 148 of the Rules and Regulations Governing Rural Banks promulgated by the Monetary Board on September 5. In its answer to the counterclaim. it was due to the latter's fault on account of its flexible and double standard policy in the granting of rediscounting privileges to Appellee and its subsequent arbitrary and illegal imposition of the 10% penalty (Record on Appeal. Branch III. informing all rural banks that an additional penalty interest rate of ten per cent (10%) per annum would be assessed on all past due loans beginning January 4. decided the case in its favor. 1965 (Record on Appeal. denying Appellant's allegations. 1969. 1965. 1958. Appellant filed a counterclaim for the outstanding balance and overdue accounts of Appellee in the total amount of P444. 57). stating that if Appellee has any unpaid obligations with Appellant. at the rate of 1/2 of 1% per annum from 1962 to March 28. The loans. p. Affirmative and Special Defenses Nos. 1964. p. Appellant. were all covered by corresponding promissory notes prescribing the terms and conditions of the aforesaid loans (Record on Appeal. On June 27. However. 1977. DLC-8.000. the Court of Appeals.809. Appellant justified the imposition of the penalty by way of affirmative and special defenses. the outstanding balance was P444. by way of rediscounting. As of July 15.00 as of July 30. 1965. Appellee also asserts that Appellant had no basis to impose the penalty interest inasmuch as the promissory notes covering the loans executed byAppellee in favor of Appellants do not provide for penalty interest rate of 10% per annum on just due loans beginning January 4. p. Inc. Appellee prayed for the dismissal of the counterclaim. 1970. p. for determination of questions of facts and of law. thru the Director of the Department of Loans and Credit. in its decision promulgated April 13. (Rollo p. Tayug Rural Bank. Pangasinan. 1963. 1962 to July 30. 1970. 1963 and thereafter at the rate of 2-1/2% per annum. 720. as amended (Record on Appeal. Appellant appealed the decision of the trial court to the Court of Appeals. 13). 1969. it obtained thirteen (13) loans from Defendant-Appellant. 15-53). under authority of Section 3 of Republic Act No. Said Memorandum Circular was actually enforced on all rural banks effective July 4. stated that "only a legal question has been raised in the pleadings" and upholding the stand of plaintiff Rural Bank. 8.45 (Record on Appeal. issued Memorandum Circular No.97. 1968 and to restrain Appellant from continuing the imposition of the penalty. The lower court. as of September 27.

the trial court is of the view that Memorandum Circular DLC-8 issued on December 23. it was chargeable with knowledge of Sections 147 and 148 of the rules and regulations authorizing the Central Bank to impose additional reasonable penalties. 1813 dated December 18. 1977.pre-trial Order dated March 3. p. p. contends that when the promissory notes were signed by appellee. 1970 that only a legal question has been raised in the pleadings. III. (Record on Appeal. which became part of the agreement. ruled that the resolution of the appeal will solely depend on the legal issue of whether or not the Monetary Board had authority to authorize Appellant Central Bank to impose a penalty rate of 10% per annum on past due loans of rural banks which had failed to pay their accounts on time and ordered the certification of this case to this Court for proper determination (Rollo. and in consonance with Section 147 and 148 of the Rules and Regulations Governing Rural Banks . p. (ibid) Accordingly. reads as follows: "Pursuant to Monetary Board Resolution No. 38). 34-35). For this reason. (Record on Appeal. On the other hand appellant without opposing appellee's right against impairment ofcontracts. the First Division of this Court. pp. II. the entire record of the case was forwarded to this Court (Rollo. The answer is in the negative. THE LOWER COURT ERRED IN HOLDING THAT THE IMPOSITION OF THE PENALTY IS AN IMPAIRMENT OF THE OBLIGATION OF CONTRACT WITHOUT DUE PROCESS. On April 20. ordered the case docketed and as already stated declared the same submitted for decision (Rollo. 1964. p. 40). impairs the obligation of contract and deprives the plaintiff of its property without due process oflaw. DLC-8 dated December 23. 1964. 36). 1977. Appellant assigns the following errors: I. by virtue of Memorandum Circular No. 1964 prescribing retroactive effect on all past due loans. In its Brief. THE LOWER COURT ERRED IN NOT FINDING JUDGMENT AGAINST PLAINTIFF FOR 10% COST OF COLLECTION OF THE PROMISSORY NOTE AS PROVIDED THEREIN. It is undisputed that no penal clause has been included in the promissory notes. THE LOWER COURT ERRED IN HOLDING THAT IT IS BEYOND THE REACH OF THE MONETARY BOARD TO METE OUT PENALTIES ON PAST DUE LOANS OF RURAL BANKS ESPECIALLY SINCE NO PENAL CLAUSE HAS BEEN INCLUDED IN THE PROMISSORY NOTES. 1965. 1964. DLC-8 issued by the Director of Appellant's Department of Loans and Credit on December 23. Memorandum Circular No. In the resolution of May 20. 61). the issue is reduced to the sole question as to whether or not the Central Bank can validly impose the 10% penalty on Appellee's past overdue loans beginning July 4.

The above-quoted Memorandum Circular was issued on the basis of Sections 147 and 148 of the Rules and Regulations Governing Rural Banks of the Philippines approved on September 5. 148. violating any of the stipulations in its note. A Rural Bank receiving any payment on account of papers discounted or used for collateral must turn the same over to the creditor bank before the close of the banking day next following the receipt of payment.G. Default and other violations of obligation by Rural Bank. including curtailment or withdrawal of financial assistance. which provide: "Section 147. without the necessity of demand. 136. "Sec. 55 O. on June 13. 1958. A Rural Bank failing to comply with the provisions of the preceding paragraph shall ipso facto lose its right to the rediscounting or loan period. shall suffer the consequences provided in the second paragraph of the preceding section. p. shall be considered only after such personal checks shall have been honored at clearing." (Record on Appeal.) The "Rules and Regulations Governing Rural Banks" was published in the Official Gazette. 3. 720. shall be assessed an additional penalty interest rate of ten per cent (10%) per annum on such past due accounts with the Central Bank over and above the customary interest rate(s) at which such loans were originally secured from the Central Bank. personal checks.A. as amended. the Monetary Board of the Central Bank of the Philippines shall formulate the necessary rules and regulationsgovernng the establishment . 135). as long as the aggregate discounting on loan amount is not fully paid.concerning the responsibility of a rural bank to remit immediately to the Central Bank payments received on papers rediscounted with the latter including the loan value of rediscounted papers as they mature. Record on Appeal. A Rural Bank incurring default. pp. without prejudice to the Central Bank imposing additional reasonable penalties. It reads: "SEC. 5186-5259. thus incurring past due accounts with the Central Bank. p. p. 130). Duty of rural Bank to turn over payment received for papers discounted or used for collateral. It is by virtue of these same Rules that Rural Banks rediscount their loan papers with the Central Bank at 2-1/2% interest per annum and in turn lend the money to the public at 12% interest per annum (Defendant's Reply to Plaintiff's Memorandum. effect. or that of the papers discounted or used as collateral. In furtherance of this policy. rural banks which shall default in their loan obligations." (Record on Appeal. and to liquidate fully its maturing loan obligations with the Central Bank. unless the Rural Bank substitutes the same with another eligible paper with at least the same or earlier maturity and the same or greater value. that the Monetary Board has adopted the set of Rules and Regulations Governing Rural Banks. No. for purposes of repayment.. 1959. Appellant maintains that it is pursuant to Section 3 of R. or in any other manner. In addition. A Rural Bank becomes in default upon the expiration of the maturity period of its note.

or to cooperatives of such farmers or merchants and to supervise the operation of such banks. as follows: "SEC. shall consist in placing limits to the maximum credit allowed any individual borrower. test check of cash and other transactions of the Rural Banks. 720 nor in any other provision of R. In normal times. on Appellant's authority to extend loans to Rural Banks by way of rediscounting is Section 13 of R." Nowhere in any of the above-quoted pertinent provisions of R. HOWEVER.A. that is. is the Monetary Board authorized to mete out on rural banks an additional penalty rate on their past due accounts with Appellant." As to the supervising authority of the Monetary Board of the Central Bank over Rural Banks. in imposing a uniform accounting system and manner of keeping the accounts and records of the Rural Banks. Rural Banks are hereby authorized under such terms and conditions as the Central Bank shall prescribe to borrow on a medium or long term basis." The specific provision under the law claimed as basis for Sections 147 and 148 of the Rules and Regulations Governing Rural Banks. in instituting periodic surveys of loan and lending procedures. in supervising the business operation of the Rural Banks. 720. and. the Central Bank may rediscount against papers evidencing a loan granted by a Rural Bank to any of its customers which can be liquified within a period of two hundred and seventy days: PROVIDED. In an emergency or when a financial crisis is imminent. As correctly stated by the trial court.A. in indicating the manner in which technical assistance shall be extended to Rural Banks. 720 for that matter. in determining the loan period and loan procedure. while the Monetary Board possesses broad supervisory powers. The power to supervise the operation of any Rural Bank by the Monetary Board of the Central Bank as herein indicated. in undertaking regular credit examination of the Rural Banks. 141).A. p. 10. nonetheless. as amended. in general. the Central Bank may give a loan to any Rural Bank against assets of the Rural Bank which may be considered acceptable by a concurrent vote of at least five members of the Monetary Board. in conducting training courses for personnel of Rural Banks. Repaymentof loans obtained by the Central Bank of the Philippines or any other government financing institution from said foreign lending institutions under this section shall be guaranteed by the Republic of the Philippines. the same is spelled-out under Section 10 of R.A. funds that the Central Bank or any other government financing institutions shall borrow from the International Bank for Reconstrution and Development or other international or foreign lending institutions for the specific purpose of financing the above stated agricultural and industrial program. audits. which provides: "SEC. in prescribing the interest rate. 13. 720. That for the purpose of implementing a nationwide program of agricultural and industrial development. .and operations of Rural Banks for the purpose of providing adequate credit facilities to small farmers and merchants. the retroactive imposition of administrative penalties cannot be taken as a measure supervisory in character (Record on Appeal.

119).S.B. it cannot be otherwise as the Constitution limits the authority of the President. to take care that the laws be faithfully executed. Lim. 7 SCRA 719. v. Board of Tax Appeals. for it is the courts that finally determine what the law means. Veterans Administration.Barrias (11 Phil. Gonzalo Sy v. the rules and regulations partake of the nature of a statute. v. There are. as necessarily limited to what is provided for in the legislative enactment. v. Phil. The rule delineating the extent of the binding force to be given to administrative rules and regulations was explained by the Court in Teoxon v. a public official must locate in the statute relied upon a grant of power before he can exercise it. may be found as early as 1908 in the case of United States v. 58 SCRA 493). L-29236. 23 SCRA 1183. Industrial Development Company. Tupasi Molina (29 Phil. 93 Phil. The rule has prevailed over the years. 376. "administrative interpretation of the law is at best merely advisory. Necessarily. Director of Forestry v. Inc. Except for constitutional officials who can trace their competence to act to the fundamental law itself. v.. Enage. 439). thus: "The recognition of the power of administrative officials to promulgate rules in the implementation of the statute. all that is required is that the regulation be not in contradiction with it. 15 SCRA 638. Santos (63 Phil. Price Stabilization Board (89 Phil. 23 SCRA 1183). No lesser administrative. and in 1962 Victorias Milling Co. assert for itself a more extensive prerogative. contrary to the express language of the Constitution. but conform to the standards that the law prescribes (Director of Forestry v. Secretary of Agriculture and Natural Resources. Junio (L-50908. Central Bank of the Philippines. Ltd. even if the courts are not in agreement with the policy stated therein or its innate wisdom x x x. Tomas v. R." Indeed. 300). 108 Phil. January 31.Maceren. August 21. In case of discrepancy between the basic law and a rule or regulation issued to implement said law. The Court held in the same case that "A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and its scope is within the statute granted by the legislature. 1984. Muñoz. 51 SCRA 340). however limitations to the rule-making power of administrative agencies. Inc. Commissioner of Civil Service v. Muñoz. Member of the Board of Administrators (33 SCRA 588). Del Mar v. the latest restatement of which was made by the Court in the case of Bautista v. A rule shaped out by jurisprudence is that when Congress authorizes promulgation of administrative rules and regulations to implement given legislation.. in 1936 People v. it is bound to observe the constitutional mandate. 327) in 1914 U. 24 SCRA 365. Inc. Social Security Commission. in whom all executive power resides. Cruz. Hon. 1974. Santiago. executive office. or agency then can. 555. 70 SCRA 570). Department zeal may not be permitted to outrun the authority conferred by statute (Radio Communications of the Philippines. Rules that subvert the statute cannot be sanctioned (University of St. in 1951 Chinese Flour Importers Ass. v. When promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law. and compliance therewith may be enforced by a penal sanction provided in the law (Victorias Milling Co." On the other hand. the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People v. Social Security Commission (4 SCRA 627). L- .Administrative rules and regulations have the force and effect of law (Valerio v. There must be strict compliance with the legislative enactment. People v. 114 Phil. 127 SCRA 342). 1091). v.

1963. The records show that DLC Form No. September 28. Republic. p. Appellant evidently hoped that the defect could be adequately accomplished by the revision of DLC Form No. Surely. . afterDecember 23. As stated by the trial court. 1970. 1813." Such clause was not a part of the promissory notes executed by Appellee to secure its loans. 1969 (Folder of Exhibits.00) pesos as attorney's fees and costs of suit and collection. dated December 18. PREMISES CONSIDERED. 132 SCRA 267). Hence an administrative agency cannot impose a penalty not so provided in the law authorizing the promulgation of the rules and regulations. 1964 imposing the questioned 10% per annum penalty rate on past due loans of rural banks and amended sub-paragraph (a). Appellant inserted the clause in the revised DLC Form No. the decision of the trial court is hereby AFFIRMED with modification that Appellee Rural Bank is ordered to pay a sum equivalent to 10% of the outstanding balance of its past overdue accounts. 11 (Folder of Exhibits. It is provided in all the promissory notes signed by Appellee that in case of suit for the collection of the amount of the note or any unpaid balance thereof. 79 SCRA 462. the Monetary Board in its Resolution No. while there is now a basis for the imposition of the 10% penalty rate on overdue accounts of rural banks. 1977. 16) was revised December 23.00 as attorney's fees and costs of suit and collection. 1970. but not in any case less than P500. 1964. October 18. have been awarded the same by the court below. The contention that Appellant is entitled to the 10% cost of collection in case of suit and should therefore. revoked its Resolution No. L-43276.32166. on March 31. the rule cannot be given retroactive effect. the undersigned shall pay a penalty at the rate of______ per cent ( ) per annum on such past due account over and above the interest rate at which such loan was originally secured from the Central Bank. Appellee cannot be allowed to come to Court seeking redress for an alleged wrong done against it and then be allowed to renege on its corresponding obligations. there was none during the period thatAppellee contracted its loans from Appellant. Daza v. Thus. dated May 7. 11. the Appellee RuralBank shall pay the Central Bank of the Philippines a sum equivalent to ten (10%) per centof the amount unpaid not in any case less than five hundred (P500. Finally. 19). Thus. 1964 to include the penal clause. 475 effective April 1. this move on the part of the Monetary Board clearly shows an admission that it has no power to impose the 10% penalty interest through its rules and regulations but only through the terms and conditions of the promissory notes executed by the borrowing rural banks. as follows: "In the event that this note becomes past due. the last of which loan was on July 30. is well taken. the rule is likewise clear. Conversely. p. Section 10 of the existing guidelines governing rural banks' applications for a loan or rediscount. 11 to make it a part of the contractual obligation of rural banks securing loans from the Central Bank. 1984. much less one that is applied retroactively.

A. PETITIONER submitted to the HDMF a letter explaining that the 1995 Amendments to the Rules are invalid.. 7742. [8] On 31 March 1997. petitioner. issued Board Resolution No." and that the Rules Implementing R.A. 1752. BUENAVENTURA. which require the existence of a plan providing for both provident/retirement and housing benefits for exemption from the Pag~IBIG Fund coverage under Presidential Decree No. petitioner Romulo.D. PETITIONER filed a petition for review[9] before the Court of Appeals. On 16 November 1995. 7742.SO ORDERED. No. Sayoc and De Los Angeles (hereafter PETITIONER).: CODES Once again. 7742. as amended. 1752.[6] PETITIONER's appeal[7] with the HDMF Board of Trustees was denied for having been rendered moot and academic by Board Resolution No.[5] Jksm In a letter dated 18 March 1996. the HDMF Board of Trustees. a law firm. Series of 1995. No. On motion by HDMF.[4] In support of said application. ROMULO. except for distressed employers. removing the availment of waiver of the mandatory coverage of the Pag~IBIG Fund. as amended by R. Pursuant to Section 19[1] of P. MABANTA. No. pursuant to Section 5 of Republic Act No. As amended. Section 1 of Rule VII provides that for a company to be entitled to a waiver or suspension of Fund coverage. 1208. the Court of Appeals dismissed[10] the petition on the ground that the .J. C.D. PETITIONER filed with the respondent an application for Waiver or Suspension of Fund Coverage because of its superior retirement plan. 7742. Mabanta. the President and Chief Executive Officer of HDMF disapproved PETITIONER's application on the ground that the requirement that there should be both a provident retirement fund and a housing plan is clear in the use of the phrase "and/or.[3] it must have a plan providing for both provident/ retirement and housing benefits superior to those provided under the Pag~IBIG Fund. No. Buenaventura. HOME DEVELOPMENT MUTUAL FUND. Series of 1996. DECISION DAVIDE. amending and modifying the Rules and Regulations Implementing R.A. No.[2] On 1 September 1995. 1752 but merely implement the law. 7742 did not amend nor repeal Section 19 of P. vs. SAYOC & DE LOS ANGELES. was exempted for the period 1 January to 31 December 1995 from the Pag~IBIG Fund coverage by respondent Home Development Mutual Fund (hereafter HDMF) because of a superior retirement plan. respondent. 1011. this Court is confronted with the issue of the validity of the Amendments to the Rules and Regulations Implementing Republic Act No. JR.

P. As to the amendments to the Rules and Regulations Implementing R. The 1996 Amendment are also void insofar as they abolished the exemption granted by Section 19 of P. No. Chapter 2.A.A. an agency shall. and not the concurrence of both plans.D. Absent such public hearing. which is a newspaper of general circulation. Book VII of the Administrative Code of 1987. concerning the extension. There is no allegation that petitioner is a distressed employer to warrant its exemption from the Fund coverage. 7742 for being contrary to law. 7742. It had the option to use "and" only . the same are valid. to be heard before the HDMF adopted the said Amendments. PETITIONER contends that the subject 1995 Amendments issued by HDMF are inconsistent with the enabling law. which provides: SEC. No. 1752.A.D. Public Participation ~~ (1) If not otherwise required by law. PETITIONER's motion for reconsideration[11] was denied. No. 9. as well as amendments thereto.[12] Hence. No. a public hearing should have first been conducted to give chance to the employers. No. 1752. In support thereof. No. The repeal of such exemption involves the exercise of legislative power. No." On the other hand. Hence. 1752. which cannot be delegated to HMDF. the respondent Board was merely exercising its rule-making power under Section 13 of P. which provides that "[e]very agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. And the publication requirement was amply met. it is entitled to exemption from the coverage in accordance with Section 19 of P. since the questioned amendments were published in the 21 October 1995 issue of the Philippine Star. PETITIONER filed a petition before this Court assailing the 1995 and the 1996 Amendments to the Rules and Regulations Implementing Republic Act No. Kycalr PETITIONER also cites Section 9 (1). PETITIONER contends that HDMF did not comply with Section 3. as amended.D.A. the amendments should be voided.coverage of employers and employees under the Home Development Mutual Fund is mandatory in character as clearly worded in Section 4 of P.D. Finally. publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. Chapter 2. No. 7742. 7742.D. Since the Amendments to the Rules and Regulations Implementing Republic Act No.D. 1752. as amended by R. Book VII of the Administrative Code of 1987. as amended by R. 1752. No. on 6 November 1997. 1752 and R. waiver or suspension of coverage under the Pag~IBIG Fund. like PETITIONER. 7742 involve an imposition of an additional burden. the HDMF contends that in promulgating the amendments to the rules and regulations which require the existence of a plan providing for both provident andhousing benefits for exemption from the Fund Coverage. as far as practicable. Under P. 7742 the Board of Trustees of the HDMF is authorized to promulgate rules and regulations. considering that PETITIONER has a provident plan superior to that offered by the HDMF. which merely requires as a pre~condition for exemption from coverage the existence of either a superior provident/ retirement plan or a superior housing plan.

instead of "or" in the rules on waiver in order to effectively implement the Pag-IBIG Fund Law. By choosing "and," the Board has clarified the confusion brought about by the use of "and/or" in Section 19 of P.D. No. 1752, as amended. As to the public hearing, HDMF maintains that as can be clearly deduced from Section 9(1), Chapter 2, book VII of the Revised Administrative Code of 1987, public hearing is required only when the law so provides, and if not, only if the same is practicable. It follows that public hearing is only optional or discretionary on the part of the agency concerned, except when the same is required by law. P.D. No. 1752 does not require that pubic hearing be first conducted before the rules and regulations implementing it would become valid and effective. What it requires is the publication of said rules and regulations at least once in a newspaper of general circulation. Having published said 1995 and 1996 Amendments through the Philippine Star on 21 October 1995[13] and 15 November 1996,[14] respectively, HDMF has complied with the publication requirement. Finally, HDMF claims that as early as 18 October 1996, it had already filed certified true copies of the Amendments to the Rules and Regulations with the University of the Philippines Law Center. This fact is evidenced by certified true copies of the Certification from the Office of the National Administrative Register of the U.P. Law Center.[15] We find for the PETITIONER. Calrky The issue of the validity of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742, specifically Section I, Rule VII on Waiver and Suspension, has been squarely resolved in the relatively recent case of China Banking Corp. v. The Members of the Board of Trustees of the HDMF.[16] We held in that case that Section 1 of Rule VII of the Amendments to the Rules and Regulations Implementing R.A. No. 7742, and HDMF Circular No. 124~B prescribing the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of Fund Coverage under P.D. No. 1752, as amended by R.A. No. 7742, are null and void insofar as they require that an employer should have both a provident/ retirement plan and a housing plan superior to the benefits offered by the Fund in order to qualify for waiver or suspension of the Fund coverage. In arriving at said conclusion, we ruled: The controversy lies in the legal signification of the words "and/or." In the instant case, the legal meaning of the words "and/or" should be taken in its ordinary signification, i.e., "either and or; e.g. butter and/or eggs means butter and eggs or butter or eggs. "The term ‘and/or’ means that the effect shall be given to both the conjunctive "and" and the disjunctive "or"; or that one word or the other may be taken accordingly as one or the other will best effectuate the purpose intended by the legislature as gathered from the whole statute. The term is used to avoid a

construction which by the use of the disjunctive "or" alone will exclude the combination of several of the alternatives or by the use of the conjunctive "and" will exclude the efficacy of any one of the alternatives standing alone." It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the word "and" and the word "or" are to be used interchangeably. It ... seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752 intended that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from coverage. If the law had intended that the employee [sic] should have both a superior provident plan and a housing plan in order to qualify for exemption, it would have used the words "and" instead of "and/or." Notably, paragraph (a) of Section 19 requires for annual certification of waiver or suspension, that the features of the plan or plans are superior to the fund or continue to be so. The law obviously contemplates that the existence of either plan is considered as sufficient basis for the grant of an exemption; needless to state, the concurrence of both plans is more than sufficient. To require the existence of both plans would radically impose a more stringent condition for waiver which was not clearly envisioned by the basic law. By removing the disjunctive word "or" in the implementing rules the respondent Board has exceeded its authority. Slx It is without doubt that the HDMF Board has rule~making power as provided in Section 5 [17] of R.A. No. 7742 and Section 13[18] of P.D. No. 1752. However, it is well~settled that rules and regulations, which are the product of a delegated power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency.[19] It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law.[20] In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should have both provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund, it effectively amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished that exemption through the 1996 Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent repeal of Section 19 are both invalid, as they are not within the delegated power of the Board. The HDMF cannot, in the exercise of its rule~making power, issue a regulation not consistent with the law it seeks to apply. Indeed, administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out.[21] Only Congress can repeal or amend the law. Scslx

While it may be conceded that the requirement of having both plans to qualify for an exemption, as well as the abolition of the exemption, would enhance the interest of the working group and further strengthen the Home Development Mutual Fund in its pursuit of promoting public welfare through ample social services as mandated by the Constitution, we are of the opinion that the basic law should prevail. A department zeal may not be permitted to outrun the authority conferred by the statute.[22] Considering the foregoing conclusions, it is unnecessary to dwell on the other issues raised. WHEREFORE, the petition is GRANTED. The assailed decision of 31 July 1997 of the Court of Appeals in CA~G.R. No. SP~43668 and its Resolution of 15 October 1997 are hereby REVERSED and SET ASIDE. The disapproval by the Home Development Mutual Fund of the application of the petitioner for waiver or suspension of Fund coverage is SET ASIDE, and the Home Development Mutual Fund is hereby directed to refund to petitioner all sums of money it collected from the latter. SO ORDERED. Slxsc Puno, Kapunan, and Ynares~Santiago, JJ., concur. Pardo, J., no part. Related to a party.

[1]

It reads:

SEC. 19. Existing Provident/Housing Plan – An employer and/or employee~group who, at the time this Decree becomes effective have their own provident and/or employee~housing plans, may register with the Fund, for any of the following purposes: (a)....For annual certification of waiver or suspension from coverage or participation in the Fund, which shall be granted on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining agreement and that the features of the plan or plans are superior to the Fund or continue to be so; or (b)....For integration with the Fund, either fully or partially. The establishment of a separate provident and/or housing plan after the effectivity of this Decree shall not be a ground for waiver of coverage in the Fund; nor shall such coverage bar any employer and/or employee~group from establishing separate provident and/or housing plans. [2] Rollo, 43.

the following matters: (b). [15] Id. 140. Rustics F. 188. 187. Laguna.. Sta. 131787. -. MACEREN CFI. vs. and waiver or suspension of coverage or its enforcement for reasons herein stated.. 30-42. 5. the Board of Trustees of the Home Development Mutual Fund shall promulgate the rules and regulations necessary for the effective implementation of this Act. 19 May 1999. [8] Rollo. NAZARIO AQUINO and CARLO DEL ROSARIO..The Board of Trustees is hereby authorized to make and change needful rules and regulations. [9] Id.. A.:têñ.. Cruz. Per Tayao-Jaguros. [17] SEC.. [12] Id.R. [11] Id. J. [10] Id... AQUINO. concurring. 189.[3] [4] Id. [18] SEC. GODOFREDO REYES. JOSE BUENAVENTURA. [5] Id. Rule~Making Power. 61. BENJAMIN REYES.. 86-91.. plaintiff-appellant.Extension of fund coverage to other working groups.. R. but not limited to. 112-126. de los Reyes. . 45-51. Id. with Martinez. Promulgation of Rules and Regulations. [7] Id. for appellees. L. [13] Rollo. 187. 13. 55-60. accused-appellees. which shall be published in accordance with law or at least once in a newspaper of general circulation in the Philippines. THE PEOPLE OF THE PHILIPPINES.Within sixty (60) days from the approval of this Act.. -. penalizing electro fishing in fresh water fisheries. promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission. 52-54. [16] G. JJ.. [14] Id. HON.. Jr. MAXIMO A. [6] Id. Office of the Solicitor General for appellant. to provide for. 44. No. and Brawner...£îhqw⣠This is a case involving the validity of a 1967 regulation. J.

with a generator colored green with attached dynamo colored gray or somewhat white. Godofredo Reyes. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. 1969 resorted to electro fishing in the waters of Barrio San Pablo Norte. ñé+. which destroy any aquatic animals within its cuffed reach. The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy conducted or transmitted by substances.£ªwph!1 . the executive and judicial departments cannot consider it unlawful. It is noteworthy that the Fisheries Law does not expressly punish . equipped with motor.£ªwph!1 SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS ñé+. the municipal court quashed the complaint.£ªwph!1 OF THE PHILIPPINES. 3512. Cruz by "using their own motor banca. Nazario Aquino and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. The order is quoted below: ñé+. since the law does not clearly prohibit electro fishing. and Section 4 of R. to the detriment and prejudice of the populace" (Criminal Case No. and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current. prohibiting electro fishing in all Philippine waters.G. promulgated Fisheries Administrative Order No. Laguna with having violated Fisheries Administrative Order No. 5429). Sta.electro fishing. and by imprisonment for not less than six months nor more than five years. The lower court further held that. 84 (62 O. it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing. Cruz. No. the following rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance of all concerned. 1224). Benjamin Reyes. SC-36). The prosecution appealed. upon the recommendation of the Commissioner of Fisheries. It was alleged in the complaint that the five accused in the morning of March 1. as amended.A. Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not more than five hundred pesos nor more than five thousand." Notwithstanding the silence of the law. 5440. As legal background.On March 7. 84-1. The case is now before this Court on appeal by the prosecution under Republic Act No. 4003. Upon motion of the accused. 1969 Jose Buenaventura. Pursuant to Section 4 of Act No. the Secretary of Agriculture and Natural Resources.

4. nineteen hundred. — Repealing Provisions. — Effectivity. was changed by the amendatory order to read as follows: "in fresh water fisheries in the Philippines." . corporation. — Definition. Thus. SEC. rivers. upon the recommendation of the Fisheries Commission. 1967 the Secretary of Agriculture and Natural Resources. — All administrative orders or parts thereof inconsistent with the provisions of this Administrative Order are hereby revoked. (d) 'Fish' includes other aquatic products. SEC. 2. swamps. (c) 'Persons' includes firm. For the purpose of this order. lakes. 3. 5. lakes and other bodies of fresh waters are included. eighteen hundred ninety eight and the seventh of November. 84-1. — Penalty. — Any violation of the provisions of this Administrative Order shall subject the offender to a fine of not exceeding five hundred pesos (P500. as defined in the t between the United States and Spain. On June 28. irrigation canals and other bodies of fresh water. the phrase "in any portion of the Philippine waters" found in section 2. issued Fisheries Administrative Order No. The equipment used are of many electrical devices which may be battery or generator-operated and from and available source of electric current. educational and scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural Resources which shall be carried at all times. (b) Electro Fishing. such as rivers. — It shall be unlawful for any person to engage in electro fishing or to catch fish by the use of electric current in any portion of the Philippine waters except for research. by restricting the ban against electro fishing to fresh water fisheries (63 O.00) or imprisonment of not extending six (6) months or both at the discretion of the Court.G. agent or employee. SEC.SECTION 1. 84. — Prohibition. dated respectively the tenth of December. 9963). — This Administrative Order shall take effect six (60) days after its publication in the Office Gazette. amending section 2 of Administrative Order No. — Words and terms used in this Order 11 construed as follows: (a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago. — Electro fishing is the catching of fish with the use of electric current. SEC. dams. association.

The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries Law. because it is obvious that the crime of electro fishing which is punishable with a sum up to P500. (See People vs. We have discussed this pre point. Del Rosario. 84 adopted the fighter penalty prescribed in on 83. the order of d rendered by that municipal court was directly appealable to the Court. It seems that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed in section 83. Cruz. in the discretion of the court. or both. 3512. 84 imposes a fm of not exceeding P500 on a person engaged in electro fishing. punishes fishing by means of an obnoxious or poisonous substance. Esperat vs. (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec. 70 SCRA 531 and the cases cited therein). 97 Phil. 11 of brief) assumed that electro fishing is punishable under section 83 of the Fisheries Law (not under section 76 thereof). Its order affirming the municipal court's order of dismissal is void for lack of motion. 1976. 67). 84 and 84-1 were not issued under section 11 of the Fisheries Law which. L-28663. People vs. It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. This appeal shall be treated as a direct appeal from the municipal court to this Court. 20 SCRA 596). Judiciary Law. Had Administrative Order No.The Court of First Instance and the prosecution (p. Avila. In this appeal. This contention is not well-taken because. (3) the declared national . 45 and last par. L-40037. or in t for not more than six months. Nazareno. And since the instant case was filed in the municipal court of Sta. June 30. Laguna. which provides that any other violation of that law "or of any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200). as indicated above. the prosecution argues that Administrative Orders Nos. falls within the concurrent original jurisdiction of the inferior courts and the Court of First instance (People vs. April 30. 44 [f]." That assumption is incorrect because 3 of the aforequoted Administrative Order No. not raised in the briefs. L-25992. 1967. then the crime of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 4[c] and [h] Republic Act No. which amount the 83. of section 87 of the Judiciary Law. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11. as already stated. not to the Court of First Instance of Laguna (Sec. the Penal provision of Administrative Order No. a provincial capital. Ragasi. September 22.

84. It could be tolerated in marine . (People vs." As already pointed out above. Republic Act No. 1. and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the Fisheries Law. Administrative Order No. the penalty for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances. We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. That law punishes (1) the use of obnoxious or poisonous substance. 11 25. Had the lawmaking body intended to punish electro fishing. fixed in section 76. or both. 965 on p. Republic Act No. or imprisonment for not more than six months. 84 and 84-1. The amendment created the impression that electro fishing is not condemnable per se. 84 punished electro fishing in all waters. in penalizing electro fishing. (5) failure of licensed fishermen to report the kind and quantity of fish caught. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission. Later. the prosecution's reference to section 83 is out of place because the penalty for electro fishing under Administrative order No. the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it.policy to encourage. as already shown. 84 is not the same as the penalty fixed in section 83. As electro fishing is not banned under that law. Exconde 101 Phil. are devoid of any legal basis. in the discretion of the court. (3) unlawful taking of marine molusca. a penal provision to that effect could have been easily embodied in the old Fisheries Law. and (6) other violations. Administrative Order No. 3512). It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. The reason is that the Fisheries Law does not expressly prohibit electro fishing. Jur. in punishing electro fishing. 3512. the ban against electro fishing was confined to fresh water fisheries. Originally. Administrative Orders Nos. 11 32). does not contemplate that such an offense fails within the category of "other violations" because. and (4) section 83 of the Fisheries Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos. (4) illegal taking of sponges. Promote and conserve our fishing resources (Sec. Nowhere in that law is electro fishing specifically punished. or explosive in fishing. (2) unlawful fishing in deepsea fisheries. citing 11 Am. In other words.

taken or gathered fish or fishery/aquatic products in Philippine waters with the use of explosives.G. P. of the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order. Note that the definition of electro fishing. Director . take or gather or cause to be caught.. a punishment which is more severe than the penalty of a time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order No. — Illegal fishing. 704. The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. The decree Act No. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes (People vs. 1975 (71 O. No. — It shall he unlawful for any person to catch. D. 3512 and 3586. Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable. 4269). It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing. 534 and 553. or by the use of electricity as defined in paragraphs (1). 4003. in particular. obnoxious or poisonous substance.£ªwph!1 SEC. respectively. That decree provides: ñé+.waters. Exconde 101 Phil. However. 33. Republic Acts Nos. 49. 43. which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and which was promulgated on May 16. That circumstances strengthens the view that the old law does not eschew all forms of electro fishing. there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. An examination of the rule-making power of executive officials and administrative agencies and. is now found in section 3(d) of the decree. to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. 428. rules and regulations or parts thereof inconsistent with it (Sec. expressly punishes electro fishing in fresh water and salt water areas. of Section 3 hereof: . and all . 84. Presidential Decrees Nos. 704).. Acts. Executive Orders. dealing in illegally caught fish or fishery/aquatic products. as amended. which is found in section 1 (c) of Fisheries Administrative Order No. 1125. if not impossible. at present. (m) and (d). Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4) years". 3048. 84 and which is not provided for the old Fisheries Law.

vs. Interprovincial Autobus Co. 349). and regulations consistent" with that law. 290. General Auditing Office. Tupasi Molina. L-21906. 51 SCRA 340. Manuel vs. 1973. Rosenthal and Osmeñ. Coll. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources. 319. citing U. Del March vs.a. regulates. (U. 70 Phil. 98 Phil. 1971. Meer. Deluao vs. all rules. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. and should be for the sole purpose of carrying into effect its general provisions." That power is now vested in the Secretary of Natural Resources by on 7 of the Revised Fisheries law.oz. . 42 SCRA 660. L-25619. The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the nondeleption of legislative. L-24796. 102 Phil. People vs. Teoxon vs. see of Internal Revenue vs. forms instructions. L28952. citing 12 C. Muñ. vs.of Forestry vs. The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. Villaflor 69 Phil.S. supra). As to invalid regulations. vs. of course. There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Geukeko vs. Members of the d of Administrators. June 30. 712). "as may be and proper to carry into effect the provisions thereof.S. Phil. 23 SCRA 1183. powers. Veterans Administrative. orders. Inc. 1970. 422. 419. 376. (University of Santo Tomas vs. orders. 1198. the law itself cannot be extended." Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate. 68 Phil. and the increased difficulty of administering the law" Calalang vs. 506. of Internal Revenue. 1969. 382. rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries. Casteel.S. 845-46. 78 Phil. whenever he may see fit do so. 295-6). 1968. 328). The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U. vs. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue instructions.S. Araneta. 125. Section 4(h) of Republic Act No. 29 Phil. Williams. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. 726. Grimaud 220 U. L-27299. Board of Tax A 93 Phil. 109 Phil. June 27. 676. June 28. 119. Estenzo. the multiplication of the subjects of governmental regulations.. Tupasi Molina. vs. December 29. An administrative agency cannot amend an act of Congress (Santos vs. August 29. 29 SCRA 350). Presidential December No. By such regulations. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life. 706. Rules that subvert the statute cannot be sanctioned. 655.J. 704. 33 SCRA 585. Wise & Co.

August 21. The details and the manner of carrying out the law are oftentimes left to the administrative agency entrusted with its enforcement. Secretary of culture and Natural Resources. 58 SCRA 493.memorandums. 194. after expressing the policy. and other instructions. 117 Phil. it is a requisite that he should not transcend the bound demarcated by the statute for the exercise of that power. supra. This Court in its decision in the Lim case." The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency. promulgated on July 26. 558). and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said Department. In case of discrepancy between the basic law and a rule or regulation issued to implement said law. In this sense. it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law. partake of the nature of a statute. not contrary to law. to the importance and necessity of closely following the legal provisions which they intend to implement so as to avoid any possible misunderstanding or confusion. 197. Social Security Commission. objectives." Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. called the attention of technical men in the executive departments." "department zeal may not be permitted to outrun the authority conferred by statute. "Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law. Inc. p. Article 7 of the Civil Code embodies the basic principle that administrative or executive acts. 108 Phil. Inc. vs.. L-29236." As noted by Justice Fernando. L. Lim. . remedies and sanctions intended by the legislature. 729. Santiago. 1960. he would be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body. "except for constitutional officials who can trace their competence to act to the fundamental law itself. 733. 1974. 114 Phil. 17 SCRA 316). (Davis. vs. 555. 496-8). a public office must be in the statute relied upon a grant of power before he can exercise it. the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People vs." (Radio Communications of the Philippines. Inc. purposes. except as expressly authorized by law. Antique Sawmills. and compliance therewith may be enforced by a penal sanction provided in the law. Administrative Law. As he exercises the rule-making power by delegation of the lawmaking body. May 30. vs. to regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of his Department. 1966.20051. 1091). who draft rules and regulations. Zayco. otherwise. cited in Victories Milling Co. but none of said rules or orders shall prescribe penalties for the violation thereof. This is so because statutes are usually couched in general terms. orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.

It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in the legislature. 29 Phil. This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States. under which the regulation was issued. 127. The instant case is similar to People vs. and . In other words. 124). Augusto A. As the said law does not penalize the act mentioned in section 28 of the administrative order. 119. 1132). In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law. a power which has not been and cannot be delegated to him. loiter and anchor without permission from the Secretary within three kilometers from the shoreline of Corrigidor Island. 938. the promulgation of that provision by the Secretary "is equivalent to legislating on the matter. Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military reservations authorities of the United States only upon receiving written permission therefor. Supp. it being expressly reserved" to the lawmaking body. vs. vs. 1125. "Such an act constitutes not only an excess of the regulatory power conferred upon the Secretary but also an exercise of a legislative power which he does not have. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two fishing boats to fish. sec. 73 F. A violation of the proviso may be proceeded against under section 45 of the Federal Penal Code. Texas Co.The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in accordance with the provisions of the law (U. Montgomery. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law.S. which permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. The Santos case involves section 28 of Fish and Game Administrative Order No. Tupasi Molina. because the law itself does not expressly punish electro fishing. p. Jur. 2nd. and it may not be delegated to any other body or agency" (1 Am. Exconde 101 Phil. 63 Phil. 527). a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided in the authorizing statute and by virtue of the latter (People vs. 300. without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military and naval authorities concerned. Santos.

Miles. 206 Ga. and the order will be scrutinized with special care. he was charged with a violation of the rule Promulgated by the State Game Commission. the charge against Santos was dismiss. In a prosecution for a violation of an administrative order. The Miles case is similar to this case. 105 Pac. Miles. it could have readily said so. which have the effect of extending. killing or displaying of any game animal. Cruz. While an administrative agency has the right to make ranks and regulations to carry into effect a law already enacted. prize or compensation for the hunting. See 2 Am. For that act. the Game Commission promulgated a rule that "it shall be unlawful to offer. Laguna in Criminal Case No. amend and/or repeal. State. 2nd 129-130). or which conflict with the authority granting statute. regularly offered a ten-down cash prize to the person displaying the largest deer in his store during the open for hunting such game animals. Hence. Wash. Jr. 2nd 322. SO ORDERED. pay or receive any reward. Hence. Costs de oficio." Beryl S. 734. taking. Miles supra). Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose. 1970 is set aside for lack of appellate jurisdiction and the order of dismissal rendered by the municipal court of Sta. (State vs. Under that statute. If the lawmaking body desired to prohibit the display of game. It was not lawful for the administrative board to extend or modify the statute. promulgate. It was held that there was no statute penalizing the display of game. WHEREFORE.therefore" the said provision "is null and void and without effect". it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. the rules of administrative officers and boards. pursuing. the indictment against Miles was quashed. game bird or game fish or any part thereof. A penal statute is strictly construed. do not represent a valid precise of the rule-making power but constitute an attempt by an administrative body to legislate (State vs. the owner of a sporting goods store. 58 Second 2d 534. that power should not be confused with the power to enact a criminal statute. (Glustrom vs. . the lower court's decision of June 9. What the statute penalized was the taking of game. The Miles case involved a statute which authorized the State Game Commission "to adopt. and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game. 2nd 51). 5429 is affirmed.

did not empower it "to detach.: We deal here with a practice known to many motorists in Metro Manila: the removal of the license plates of illegally parked vehicles. Judge Arsenio M. which held the practice unlawful. The parties also agreed to submit the case for resolution on the sole issue of whether there was a law or ordinance authorizing the removal of the license plates of illegally parked vehicles. vs. who claimed that the rear license plate. remove and confiscate vehicle plates of motor vehicles illegally parked and unattended as in the case at bar. and DANTE S. The original complaint was filed with the said court on August 10. the defendant had not been able to point to any MMC rule or regulation or to any city ordinance to justify the questioned act. J. which the defendant had invoked. in his capacity as Presiding Judge of the Regional Trial Court." His Honor made the following pointed observations: At this juncture. Dante S. CRUZ. This was challenged by the private respondent in the regional trial court of Manila. 1989. a lawyer. David. In ruling for the complainant. respondents. DAVID. HON. Gonong issued a temporary restraining order on August 14. 23. and 25. by Dante S. that there was no ordinance or law authorizing such removal. of his car was removed by the Metropolitan Traffic Command while the vehicle was parked on Escolta. he said. Moreover. The parties then submitted simultaneous memoranda in support of their respective positions. 1989. that if the arbitrary and capricious detachment and confiscation of vehicles plates illegally parked and unattended . and hearings on the writ of preliminary injunction were held on August 18. Judge Gonong held that LOI 43. On the allegation that the practice was "the root cause of graft and corruption or at the very least the equivalent of street racket among defendant's deployed agents." At any rate. it may not be amiss to say. urging reversal of the decision for grave abuse of discretion. GONONG. following which the respondent judge rendered the assailed decision. Branch 8 at Manila. the LOI had been repealed by PD 1605. The petitioner is now before us. more importantly. It merely authorizes the removal of said vehicles when they are obstacles to free passage or continued flow of traffic on streets and highways. petitioner. David for and in his own behalf as private respondent. He asked that the practice be permanently enjoined and that in the meantime a temporary restraining order or a writ of preliminary injunction be issued.METROPOLITAN TRAFFIC COMMAND WEST TRAFFIC DISTRICT. The writ was granted on this last date. He questioned the petitioner's act on the ground not only that the car was not illegally parked but. 1989. ARSENIO M.

the penalties being limited in the decree to imposition of fine and suspension or revocation of driver's licenses or certificates of public convenience. LOI 43 is the special law dealing only with illegal parking while PD 1605 is the general law dealing with all other kinds of traffic violations. The two measures may be enforced together because implied repeals are not favored and. to which the petitioner filed a reply as also directed. we issued a temporary restraining order dated February 6. The petitioner also deplores the above-quoted remarks of the trial judge. In his comment. the image of the man clothed in a traffic or police uniform will be greatly impaired if not cursed with disrespect on the part of those who have suffered at his hands. including illegal parking. etc. to look at them another way. thereby fortifying the contemporaneous public perception that he is a dyed-in-the-wool extortionist if not an unmitigated chiseler. which specifies all the sanctions available against the various traffic violations. However. the private respondent argues that LOI 43 has been repealed by PD 1605. As for his allegation that the challenged practice is a source of graft. he maintains that it was not improper to discuss it in his memorandum because it was pertinent to the central issue under consideration. to prevent enforcement of the said decision until further orders from this Court. The special law must of course prevail over the general law. 1 It bears noting that this petition should have been filed first with the Court of Appeals. Worse. courageous and valiant protector of a citizen of the Republic that he is meant to be. Expressio unius est exclusio alterius. in view of the importance of the issue raised. we required a comment from the private respondent. Thereafter. furthermore. and instead his real oppressor and enemy. He agrees that the special law prevails over the general law but maintains it is PD 1605 that is the special law because it is applicable only on Metro Manila and LOI 43 that is the general law because it was intended to operate throughout the country. Upon the filing of this petition.as in the act complained of in the instant case. pointing out that the parties had agreed to limit the issue to whether there was a statutory basis for the act complained of. which has concurrent jurisdiction with this Court on decisions of the regional trial courts involving questions of law. he will cease (if he had not already ceased) to be the law-abiding. he claims that removal and confiscation of the license plate without . And even assuming that abuses have been committed in the enforcement of LOI 43. Finally. The petitioner reiterates and reinforces its argument in the court below and insists that LOI 43 remains in force despite the issuance of PD 1605. we have decided to take cognizance thereof under Rule 65 of the Rules of Court so we can address and resolve the question directly. It contends that there is no inconsistency between the two measures because the former deals with illegally parked vehicles anywhere in the Philippines whereas the latter deals with the regulation of the flow of traffic in the Metro Manila area only. 1990. He stresses that removal and confiscation of the license plates of illegally parked vehicles is not one of them. the remedy is not to disregard it or consider it revoked but to prosecute the guilty parties.

2. In its reply. on November 21. the license plate is not property in the constitutional sense. For his purpose. For the first offense the stalled or illegally parked vehicle shall be removed. user or claimant.notice and hearing violates due process because such license plate is a form of property protected by the Bill of Rights against unlawful deprivation. PD 1605 (Granting the Metropolitan Manila Commission Central Powers Related to Traffic Management. LOI 43. being merely the identification of the vehicle. it maintains. 1978. was issued on November 28. Providing Penalties. 1972. towed and impounded at the expense of the owner. The petitioner also takes issue with the contention that it is PD 1605 that should be considered the special law because of its limited territorial application. with the following pertinent provisions: Motor vehicles that stall on the streets and highways. and pertinently provides: Section 1. also by President Marcos. Hence. and for Other Purposes) was issued. the petitioner faults the private respondent for belatedly raising the constitutionality of LOI 43. For the second and subsequent offenses. shall immediately be removed by their owners/users. rules and regulations in Metropolitan Manila in such amounts and under such penalties as are herein prescribed. The suspended or revoked driver's license or the report of suspension or revocation of the certificate of public convenience shall be sent to the Land Transportation . and its "temporary confiscation" does not deprive the owner of the use of the vehicle itself. the registry plates of the vehicles shall be confiscated and the owner's certificate of registration cancelled. the Metropolitan Manila Commission or its representatives shall suspend or revoke such license or certificate. otherwise said vehicles shall be dealt with and disposed in the manner stated hereunder. the powers of the Land Transportation Commission and the Board of Transportation under existing laws over such violations and punishment thereof are hereby transferred to the Metropolitan Manila Commission. streets and sidewalks. 1. there is no unlawful taking under the due process clause. Repeal of LOI 43 on that ground would run counter to the legislative intention as it is in fact in Metro Manila that the problem of illegal parking is most acute. entitled Measures to Effect a Continuing Flow of Transportation on Streets and Highways. ordinances. The Metropolitan Manila Commission shall have the power to impose fines and otherwise discipline drivers and operators of motor vehicles for violations of traffic laws. suggesting faintly that this should not be permitted. (Emphasis supplied). When the proper penalty to be imposed is suspension or revocation of driver's license or certificate of public convenience. In any case.

rules and regulations. Moreover. and a revocation of the driver' license for the fifth offense: Provided.00 for the second offense. Violations of traffic laws. as the case may be. That the Metropolitan Manila Commission may impose higher penalties as it may deem proper for violations of its ordinances prohibiting or regulating the use of certain public roads. P50. the Metropolitan Manila Commission or the law enforcement agency concerned shall endorse the case to the proper fiscal for appropriate proceedings preparatory to the filing of the case with the competent traffic court. committed within a twelve-month period. for their records update. all laws. xxx xxx xxx Section 8. If the offender fails to pay the fine imposed within the period herein prescribed. his driver's license shall not be renewed until he has paid the fine and corresponding surcharges. shall subject the violator to graduated fines as follows: P10.00 for the first offense. the driver's license shall not be confiscated but the erring driver shall be immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall state the violation committed. orders. ordinances. (Emphasis supplied). a one-year suspension of driver's license for the fourth offense. streets or thoroughfares in Metropolitan Manila. Insofar as the Metropolitan Manila area is concerned.Commission or the Board of Transportation. the amount of fine imposed for the violation and an advice that he can make payment to the city or municipal treasurer where the violation was committed or to the Philippine National Bank or Philippine Veterans Bank or their branches within seven days from the date of issuance of the citation ticket. xxx xxx xxx Section 3. If at the time a driver renews his driver's license and records show that he has an unpaid fine. or parts thereof inconsistent herewith are hereby repealed or modified accordingly. xxx xxx xxx Section 5. P20. although the Metropolitan Manila Commission is authorized by the decree to "otherwise discipline" and . ordinances. A careful reading of the above decree will show that removal and confiscation of the license plate of any illegally parked vehicle is not among the specified penalties. city or municipal court. In case of traffic violations.00 for the third offense. decrees. reckoned from the date of birth of the licensee. rules and regulations.

A violation imports an intentional breach or disregard of a rule. even the petitioner recognizes that "there is a world of difference between a stalled vehicle and an illegally parked and unattended one" and suggests a different treatment for either. It is worth noting that it is not the driver's license that is confiscated and canceled when the vehicle stalls on a public street. the penalty shall be confiscation of the license plate and cancellation of the certificate of registration petition. those that involuntarily stop on the road due to some unexpected trouble such as engine defect. "The first means one which stopped unnecessarily or broke down while the second means one which stopped to accomplish something. That is why.. i•t•caüsl The act. LOI 43 does not punish illegal parking per se but parking of stalled vehicles. The obstruction is not deliberate. The penalties prescribed by the LOI are therefore deemed incorporated in PD 1605 as additional to the other penalties therein specified. the stalled vehicle is immediately towed at the owner's expense to clear the street of the traffic obstruction. 2 LOI 43 deals with motor vehicles "that stall on the streets and highways' and not those that are intentionally parked in a public place in violation of a traffic law or regulation. In the case of the private respondent. In fact. relying instead on its argument that the applicable authority for the questioned act is LOI 43. The LOI goes against the vehicle itself. including temporary rest. whatever sanctions it may impose must be "in such amounts and under such penalties as are herein prescribed. and this is effected by confiscating the license plates and canceling the certificates of registration of those vehicles that are not roadworthy." and one of such laws is LOI 43. or other similar cause. presumably due to his failure to repair it. but only because it has stalled." The petitioner has not pointed to any such additional sanctions. The charge against him is that he purposely parked his vehicle in a no parking area (although this is disputed by him).e. Contrary to the common impression. it is not alleged or shown that his vehicle stalled on a public thoroughfare and obstructed the flow of traffic. "the powers of the Land Transportation Commission and the Board of Transportation over such violations and punishment thereof are (hereby) transferred to the Metropolitan Manila Commission. The applicable . which is an altogether different offense."impose higher penalties" on traffic violators. lack of gasoline. It would appear that what the LOI punishes is not a traffic violation but a traffic obstruction. punctured tires. is a traffic violation that may not be punished under LOI 43. The purpose of the LOI evidently is to discipline the motorist into keeping his vehicle in good condition before going out into the streets so as not to cause inconvenience to the public when the car breaks down and blocks other vehicles. if true. as where a driver leaves his vehicle in a no-parking area against a known and usually visible prohibition. The vehicle is deemed illegally parked because it obstructs the flow of traffic. The object of the measure is to ensure that only motor vehicles in good condition may use the public streets. Where it appears that the owner has not learned from his first experience because the vehicle has stalled again. The petitioner stresses that under the decree. i. for the first offense.

every official must act by and within the authority of a valid law and cannot justify the lack of it on the pretext alone of good intentions. it does not follow that it may be removed or confiscated without lawful cause. confiscation of the license plate cannot be justified under LOI 43. What is clear to the Court is that the difficulty cannot be avoided by the . the penalty of confiscation would still not be justified as it has not been alleged. But that problem is not addressed to the courts. which does not include removal and confiscation of the license plate of the vehicle among the imposable penalties." let alone the license plate of the motor vehicle. no less importantly. This Court acknowledged his praiseworthy purpose but just the same annulled his unauthorized act. And neither can that sanction be sustained under PD 1605. 3 We can rule no less in the case before us. It is recalled that more than seventy years ago. Indeed. the offense is accidental under the first measure and intentional under the second. The purpose of the LOI is to discourage the use of the public streets by motor vehicles that are likely to break down while that of the decree is to penalize the driver for his defiance of the traffic laws. that it had stalled on the road for a second or subsequent time. Under the principle that ours is a government of laws and not of men. and while both cover illegal parking of motor vehicles. the private respondent may be held liable for illegal parking only and subjected to any of the specific penalties mentioned in Section 3 of the decree.law is PD 1605. it is for the legislative and administrative authorities to solve. Confiscation of the registry plate without a judicial finding that the offense charge is a second or subsequent one would. that the illegal parking was a second or subsequent offense. While it is true that the license plate is strictly speaking not a property right. even if LOI 43 were applicable. If at all. holding that no one could take the law into his own hands. This explains why the sanctions are different. We recognize the problem of the traffic policeman who comes upon an illegally parked and unattended vehicle and is unable to serve a citation on the offending driver who is nowhere in sight. be invalid. The second or subsequent offense cannot be simply pronounced by the traffic authorities without hearing and without proof. the mayor of Manila deported one hundred seventy prostitutes to Davao for the protection of the morals and health of the city. much less shown. We find that there is no inconsistency between LOI 43 and PD 1605. That circumstance must be established at a trial before a court of justice where the vehicle owner shall have a right to be heard in his defense. Due process is a guaranty against all forms of official arbitrariness. As it has not been shown that the private respondent's motor vehicle had stalled because of an engine defect or some other accidental cause and. (even) the driver's license shall not be confiscated. unless the owner concedes this point. whichever is considered the special law either because of its subject or its territorial application. The former deals with motor vehicles that have stalled on a public road while the latter deals with motor vehicles that have been deliberately parked in a no-parking area. which clearly provides that "in case of traffic violations.

we do not have hard. but the Court feels just the same that serious steps should be taken. to determine the source of the smoke. on the basis of its own impressions on the matter." mostly street urchins under the control and direction of certain policemen. The old adage that where there's smoke there's fire is not necessarily true and can hardly be the rationale of a judicial conclusion. like attendance at a traffic seminar. The Court is not saying that these reports are true nor is it stigmatizing the entire police force on the basis of these unsubstantiated charges. Assuming that this issue was indeed not properly raised at the trial. provable facts at hand but only vague and unsubstantiated rumors that could be no more than malicious and invented charges. which must clearly define the offenses proscribed and as clearly specify the penalties prescribed.removal of the license plate of the offending vehicle because the petitioner has not shown that this penalty is authorized by a valid law or ordinance. that such efforts must be authorized by a valid law.00 to P200. The owners. This Court is not isolated from the mainstream of society and secluded in a world of its own. and commend the earnest efforts of the police to effect a smoother flow of vehicles in the public thoroughfares for the comfort and convenience of the people. the Court is nevertheless not inhibited from considering it in this proceeding. payment is usually made and the license plate returned at a private rendezvous. remove these license plates from illegally parked vehicles and later discreetly suggest to the owners that these may be retrieved for an unofficial fee. depending on the type of vehicle. We realize the seriousness of our traffic problems. This ranges from P50. The widespread report is that civilian "agents. particularly in Metro Manila. On the contrary. No official receipt is issued. the members of this Court mix with the people and know their problems and complaints. But it does believe and stress that the proper authorities should take official notice of these reports instead of blandly dismissing them as mere canards that do not deserve their attention and concern.00. If the owner agrees. The petitioner complains that the respondent judge did not confine himself to the issue agreed upon by the parties and made gratuitous accusations that were not only irrelevant but virtually condemned the whole traffic force as corrupt. It is claimed that the removal of the license plates of illegally parked motor vehicles in Metro Manila has become a veritable gold mine for some police officers. But we must add. unconcerned with the daily lives of the rest of the nation. And among these are the alleged abuses of the police in connection with the issue now before us. as a reminder that must be made. To be sure. Everything is done quietly. Nevertheless. prefer this kind of fast settlement to the inconvenience of an official proceeding that may entail not only the payment of a higher fine but also other administrative impositions. . these accusations have become too prevalent and apparently too persuasive that they cannot be simply swept under the rug. An inquiry is in our view indicated. especially because of the persistence of these charges. it is said.

now the Philippine Economic Zone Authority (PEZA). CIVIL SERVICE COMMISSION. DECISION PANGANIBAN. 2001 Decision[2] and the March 8. 1996 as Department Manager of the Legal Services Department. The challenged decision of the trial court is AFFIRMED in so far as it enjoins confiscation of the private respondent's license plate for alleged deliberate illegal parking. petitioner was appointed to a Career Executive Service (CES) position.WHEREFORE. The Court holds that LOI 43 is valid but may be applied only against motor vehicles that have stalled in the public streets due to some involuntary cause and not those that have been intentionally parked in violation of the traffic laws.: Both the appointing authority and the appointee are the real parties in interest. 58987. J. The Case Before us is a Petition for Review[1] under Rule 45 of the Rules of Court. In sum. FRANCISCO ABELLA JR. Despite having legal interest and standing. The Facts The CA narrates the factual antecedents in this wise: “Petitioner Francisco A. a lawyer. vs. on July 1. retired from the Export Processing Zone Authority (EPZA). Abella.. hence. challenging the November 16. The temporary restraining order dated February 6.”[4] The challenged Resolution denied petitioner’s Motion for Reconsideration. petitioner. and both have legal standing. 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. the CSC correctly disapproved his appointment. the petition is DISMISSED. SO ORDERED. respondent. 1990. He held a civil service eligibility for the position of . the petition for review is DENIED for lack of merit. which is subject to a different penalty. Jr. in a suit assailing a Civil Service Commission (CSC) order disapproving an appointment. herein petitioner unsuccessfully challenges the constitutionality of the CSC circular that classifies certain positions in the career service of the government. is LIFTED.. but did not have the corresponding eligibility for it. The Assailed Decision disposed as follows: “WHEREFORE.

2000. 1999. the position is above division chief level ‘3. however. series of 1994. 850 dated April 16. In view thereof. Labor and Employment Center. ‘2. Positions Covered by the Career Executive Service xxx xxx xxx (b) In addition to the above identified positions and other positions of the same category which had been previously classified and included in the CES. that on May 31. On January 1.’ “Two years after his retirement. Incumbents of positions which are declared to be Career Executive Service positions for the first time pursuant to this Resolution who hold permanent appointments thereto shall remain under permanent status in their respective positions. 1999. “It appears. it was disapproved on the ground that petitioner’s eligibility was not appropriate. 000059. the duties and responsibilities of the position require the performance of executive or managerial functions. the position is a career position. these incumbents shall be under temporary status in said other CES positions until they qualify. upon promotion or transfer to other Career Executive Service (CES) positions. Labor and Employment Center. including government owned and controlled corporations with original charters are embraced within the Career Executive Service provided that they meet the following criteria: ‘1. However. the Civil Service Commission issued Memorandum Circular No. 1994. petitioner was hired by the Subic Bay Metropolitan Authority (SBMA) on a contractual basis.Department Manager. which issued Resolution No. which was then the required eligibility for said position. all other third level positions of equivalent category in all branches and instrumentalities of the national government. affirming the . “Petitioner appealed the disapproval of his permanent appointment by respondent to the Civil Service Commission. 1979. dated January 10. petitioner was issued by SBMA a permanent employment as Department Manager III. However. petitioner was issued a temporary appointment as Department Manager III. 21. pursuant to CSC Resolution No. the pertinent provisions of which read: ‘1. Petitioner was advised by SBMA of the disapproval of his appointment. III. Status of Appointment of Incumbents of Positions Included Under the Coverage of the CES. ‘4. when said appointment was submitted to respondent Civil Service Commission Regional Office No. SBMA on July 9. having completed the training program for Executive Leadership and Management in 1982 under the Civil Service Academy.

Petitioner’s motion for reconsideration thereof was denied by the CSC in Resolution No. 21. “B. 1994 is unconstitutional as it rendered his earned civil service eligibility ineffective or inappropriate for the position of Department Manager *III+”[5] Ruling of the Court of Appeals The CA shunned the issue of constitutionality. 001143 dated May 11. s. 2000 and May 11.[7] the appellate court ruled that only the appointing officer may request reconsideration of the action taken by the CSC on appointments. petitioner brought this recourse to this Court. “C.[8] On reconsideration. 2000 on the ground that CSC Memorandum Circular No. SBMA. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioner is not the real party in interest to question the disapproval by respondent office of petitioner’s appointment as Department Manager III. as his appointment was dependent on the CSC’s approval. Thus. Labor and Employment Center. petitioner filed with *the CA+ a petition for review seeking the reversal of the CSC Resolutions dated January 10. 1998 and Mathay v.action taken by respondent.[9] Unsatisfied. Labor and Employment Center. arguing that a constitutional question should not be passed upon if there are other grounds upon which the case may be decided. the CA added that petitioner was not the real party in interest.[10] The Issues Petitioner raises the following issues for our consideration: “A. s. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioner lacks the personality to question the disapproval by respondent office of petitioner’s appointment as Department Manager III. Civil Service Commission.” “x x x xxx xxx “Undaunted. in dismissing petitioner’s appeal on a mere technicality considering that petitioner is questioning the constitutionality of . it held that petitioner did not have legal standing to question the disapproval of his appointment. he had no vested right in the office. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction. SBMA. Accordingly. since his appointment was disapproved. 2000.[6]Citing CSC Memorandum Circular 40.

” [11] The Court’s Ruling The Petition is partly meritorious.” Approval Required for Permanent Appointment A permanent appointment in the career service is issued to a person who has met the requirements of the position to which the appointment is made in accordance with the provisions of law. whether the proposed appointee is qualified to hold the position and whether the rules pertinent to the process of appointment were observed.respondent office’ issuance of Section 4 of CSC Memorandum Circular No. an appointment to a civil service position must comply with all legal requirements.” not “grave abuse of discretion. which deprived petitioner his property right without due process of law. The grounds shall be deemed “reversible errors.[17] The applicable provision of the Civil Service Law reads: “SECTION 9.[16] Thus. First Issue: Who May File Reconsideration or Appeal Preliminary Observation Petitioner imputes to the CA “grave abuse of discretion amounting to lack of jurisdiction” for ruling that he had no legal standing to contest the disapproval of his appointment. the law requires the appointment to be submitted to the CSC which will ascertain. 21. the rules and the standards promulgated pursuant thereto. in the main. 1994.[13] It implies the civil service eligibility of the appointee. while the appointing authority has the discretion to choose whom to appoint.[12]Grave abuse of discretion is a ground for a petition for certiorari under Rule 65 of the Rules of Court. Powers and Functions of the Commission.[15] To make it fully effective.[14] Thus. the choice is subject to the caveat that the appointee possesses the required qualifications. this Court resolved to grant due course to the Petition and to treat it appropriately as a petition for review on certiorari under Rule 45 of the Rules of Court. — The Commission shall administer the Civil Service and shall have the following powers and functions: “x x x xxx xxx . s. Nevertheless.

make an appointment complete.”[23] . finally. he now claims that it is merely a technicality. only the appointing authority had the right to challenge the CSC’s disapproval. then the appointment cannot be faulted on the ground that there are others better qualified who should have been preferred. s. or appeal from. It relied on Section 2 of Rule VI of CSC Memorandum Circular 40. which does not prevent him from requesting reconsideration. 1998 (Omnibus Rules on Appointment and Other Personal Actions). The power of appointment necessarily entails the exercise of judgment and discretion. If he does. if not. if this should take place. the appointment becomes ineffective thirty days thereafter. All appointments requiring the approval of the Commission as herein provided. whether original or promotional. Request for Reconsideration of. and disapprove those where the appointees do not possess the appropriate eligibility or required qualifications. otherwise. members of the Armed Forces of the Philippines. without prejudice to the liability of the appointing authority for appointments issued in violation of existing laws or rules: Provided. firemen.“(h) Approve all appointments.[20] According to the appellate court. it should be disapproved. Civil Service Commission[22] declared: “Appointment is an essentially discretionary power and must be performed by the officer in which it is vested according to his best lights. the appointment must be approved. the CSC determines whether the appointee possesses the appropriate civil service eligibility or the required qualifications.”[18] The appointing officer and the CSC acting together. except those of presidential appointees. We clarify.[19] In acting on the appointment. police forces. shall be submitted to it by the appointing authority within thirty days from issuance. the only condition being that the appointee should possess the qualifications required by law. An appointment shall take effect immediately upon issue by the appointing authority if the appointee assumes his duties immediately and shall remain effective until it is disapproved by the Commission. the disapproval of an appointment may be made by the appointing authority and submitted to the Commission within fifteen (15) calendar days from receipt of the disapproved appointment. If the appointee does. to positions in the civil service.[21] Luego v. though not concurrently but consecutively. That the Commission shall keep a record of appointments of all officers and employees in the civil service. which provides: “Section 2.” Appointing Authority’s Right to Challenge CSC Disapproval While petitioner does not challenge the legality of this provision. and jailguards. This is a political question involving considerations of wisdom which only the appointing authority can decide.

1998 is justified insofar as it allows the appointing authority to request reconsideration or appeal. taxpayers or voters who actually sue in the public interest. as well as broader policy concerns relating to the proper role of the judiciary in certain areas.is the prerogative of the appointing authority. . including those abstract qualities that define his personality -. not even this Court. “legal standing” and “real party in interest” are different concepts. Although all three requirements are directed towards ensuring that only certain parties can maintain an action. s.[30] On this point. “the selection of the appointee -. Hence the question in standing is whether such parties have ‘alleged such a personal stake in the outcome of the controversy to assure that concrete adverseness which sharpens . The appointing authority must have the right to contest the disapproval. but by concerned citizens.[27] this Court has affirmed that the appointing authority stands to be adversely affected when the CSC disapproves an appointment. KANE AND MILLER. there is none to preclude the appointee from taking the same course of action. the said authority can “defend its appointment since it knows the reasons for the same.”[28] It is also the act of the appointing authority that is being questioned when an appointment is disapproved. Thus. In Central Bank v. Aggrieved parties.[26] The CSC’s disapproval of an appointment is a challenge to the exercise of the appointing authority’s discretion. Although commonly directed towards ensuring that only certain parties can maintain an action. Civil Service Commission.taking into account the totality of his qualifications. Morato[31] explained: “The difference between the rule on standing and real party-in-interest has been noted by authorities thus: ‘It is important to note . Kilosbayan v.”[24] No tribunal. should be given the right to file motions for reconsideration or to appeal. including the Civil Service Commission.Significantly. Section 2 of Rule VI of CSC Memorandum Circular 40. standing restrictions require a partial consideration of the merits. (FRIEDENTHAL. the concepts of “legal standing” and “real party in interest” become relevant. Thus.[25] may compel the exercise of an appointment for a favored person. CIVIL PROCEDURE 328 [1985]) “Standing is a special concern in constitutional law because in some cases suits are brought not by parties who have been personally injured by the operation of a law or by official action taken. that standing because of its constitutional and public policy underpinnings. is very different from questions relating to whether a particular plaintiff is the real party-in-interest or has capacity to sue.[29] Appointee’s Legal Standing to Challenge the CSC Disapproval While there is justification to allow the appointing authority to challenge the CSC disapproval. .

he should be granted the opportunity to prove his eligibility.[37] Although the earlier discussion demonstrates that the appointing authority is adversely affected by the CSC’s Order and is a real party in interest.[33] it was his eligibility that was being questioned. Appointee Allowed Procedural Relief . because he is prevented from assuming the office in a permanent capacity. 186. 125. The Appointee a Real Party in Interest A real party in interest is one who would be benefited or injured by the judgment.[34] “Interest” within the meaning of the rule means material interest or an interest in issue and to be affected by the decree. as an approved appointment would confer on him all the rights and privileges of a permanent appointee. since he could not continue his office. then more so should petitioner be allowed to contest the CSC Order disapproving his appointment. Ed. Carr..’ (Baker v.[35] Otherwise stated. the rule refers to a real or present substantial interest as distinguished from a mere expectancy. 369 U. or consequential interest. Clearly. 88 Phil.S. Corollary to this point..[36] As a general rule. 131 *1951+)”[32] If legal standing is granted to challenge the constitutionality or validity of a law or governmental act despite the lack of personal injury on the challenger’s part.the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. He is also injured by the CSC disapproval. He had a personal stake in the outcome of the case. or the ‘party entitled to the avails of the suit. Although petitioner had no vested right to the position. Moreover. or from a future. Ltd. 7 L. contingent. 2d 633 (1962)) “x x x xxx xxx “On the other hand. one who has no right or interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action. subordinate. he would necessarily benefit if a favorable judgment is obtained. he was prejudiced by the disapproval. which justifies his challenge to the CSC act that denied his permanent appointment. the question as to ‘real party-in-interest’ is whether he is ‘the party who would be *benefited+ or injured by the judgment. the appointee is rightly a real party in interest too. or one entitled to the avails of the suit.’ (Salonga v. as distinguished from mere interest in the question involved or a mere incidental interest. Warner Barnes & Co.

[42] Furthermore. CSC Resolution 991936[38] recognizes the right of the adversely affected party to appeal to the CSC Regional Offices prior to elevating a matter to the CSC Central Office. Civil Service Commission. and the ruling may reverse previous doctrines laid down by this Court.[41] only the appointing officer could request reconsideration of actions taken by the CSC on appointments.[40] which the CA relied on. This judicial pronouncement does not override Mathay v. are silent on whether appointees have a similar right to file motions for reconsideration of. Positions Covered by the Career Executive Service.[44] Second Issue: Constitutionality of Section 4. Mathay’s Petition for Certiorari filed with the CA was improper. there is no legislative intent to bar appointees from challenging the CSC’s disapproval. Mathay Jr.[43] The right of the appointee to seek reconsideration or appeal was not the main issue in Mathay. 1994. sought the nullification of CSC Resolutions that recalled his appointment of a city government officer.by way of obiter -that based on a similar provision. CSC Memorandum Circular 21. s. And the CSC could not have acted without jurisdiction. from which the CSC derives the authority to promulgate its rules and regulations. He filed a Petition assailing the CA Decision. Indeed. . We observed then that the CSC Resolutions were already final and could no longer be elevated to the CA.Section 2 of Rule VI of CSC Memorandum Circular 40. which had previously denied his Petition for Certiorari for being the wrong remedy and for being filed out of time. The Court merely noted in passing -. the present case is being decided en banc. The view that only the appointing authority may request reconsideration or appeal is too narrow. Parenthetically.[46] The pertinent part of this Circular reads: “1.[39] The adversely affected party necessarily includes the appointee. Quezon City Mayor Ismael A. At any rate. In that case. the disapproval of an appointment. [45] petitioner challenges the constitutionality of CSC Memorandum Circular 21. or to appeal. because there was an available remedy of appeal. PD 807 and EO 292. considering that it was empowered to recall an appointment initially approved. Series of 1994 Alleging that his civil service eligibility was rendered ineffective and that he was consequently deprived of a property right without due process. The appointee should have the same right. or appeals from. s. unfavorable decisions involving appointments. 1998 should not be interpreted to restrict solely to the appointing authority the right to move for a reconsideration of.

Assistant Secretary. integrity. Assistant Bureau Director. Assistant Regional Director (department-wide and bureau-wide) and Chief of Department Service[.“(a) The Career Executive Service includes the positions of Undersecretary. Incumbents of positions which are declared to be Career Executive Service positions for the first time pursuant to this Resolution who hold permanent appointments thereto shall remain under permanent status in their respective positions. these incumbents shall be under temporary status in said other CES positions until they qualify. efficiency. CSC Authorized to Issue Rules and Regulations The Constitution mandates that. and courtesy in the Civil Service. He claims that he was eligible for his previous position as department manager of the Legal Services Department. “2. However. all other third level positions in all branches and instrumentalities of the national government. upon promotion or transfer to other Career Executive Service (CES) positions. progressiveness. the duties and responsibilities of the position require the performance of executive or managerial functions. could no longer be affected by a new eligibility requirement. SBMA. he should retain his eligibility for the position of department manager III.”[47] the CSC should “establish a career service and adopt measures to promote the morale.” Petitioner argues that his eligibility.[49] Civil Service laws have .] In addition to the above identified positions and other positions of the same category which had been previously classified and included in the CES. hence. through the Executive Leadership and Management (ELM) training program. Bureau Director.”[48] It further requires that appointments in the civil service be made only through merit and fitness to be determined by competitive examination. Regional Director (department-wide and bureau-wide). Labor and Employment Center. Status of Appointment of Incumbents of Positions Under the Coverage of the CES. responsiveness. the position is a career position.” xxx xxx xxx “(b) “4. including government-owned or controlled corporations with original charters are embraced within the Career Executive Service provided that they meet the following criteria: “1. the position is above division chief level. as “the central personnel agency of th e government. notwithstanding the classification of the latter as a CES position. “3. PEZA.

the Circular recognizes the rule of prospectivity of regulations.”[51] Entrance to the different levels requires the corresponding civil service eligibility. and custodial service positions which involve non-professional or sub[-]professional work in a non-supervisory or supervisory capacity requiring less than four years of collegiate studies. trades.[52] The challenged Circular did not revoke petitioner’s ELM eligibility. which have settled meanings in criminal jurisprudence. Eligibility must necessarily conform to the requirements of the position. for which appointments require examinations. He was appointed to a CES position.expressly empowered the CSC to issue and enforce rules and regulations to carry out its mandate. Upon . however. are clearly inapplicable here.[53] hence. notwithstanding the lack of CSEE. “(b) The second level shall include professional. the CSC deemed it appropriate to clearly define and identify positions covered by the Career Executive Service. which in petitioner’s case was a CSEE. there is no basis to argue that it is an ex post facto law[54] or a bill of attainder. are grouped into three major levels: “(a) The first level shall include clerical. crafts. his right to remain in a CES position. specifically through the issuance of the challenged Circular. the CSC had to issue guidelines to meet this objective. technical. In the exercise of its authority. Clearly. Rights Protected The challenged Circular protects the rights of incumbents as long as they remain in the positions to which they were previously appointed. thus. notwithstanding his lack of eligibility. Career Service Classified by Levels Positions in the career service. The government service of petitioner ended when he retired in 1996.[55] These terms. technical.[50] Logically. or scientific work in a non-supervisory or supervisory capacity requiring at least four years of college work up to Division Chief level. They are allowed to retain their positions in a permanent capacity. also ceased. and “(c) The third level shall cover positions in the Career Executive Service. and scientific positions which involve professional. his eligibility was inadequate. Those in the third level (CES positions) require Career Service Executive Eligibility (CSEE) as a requirement for permanent appointment.

[57] Second.[65] .[63] Prior notice to and hearing of every affected party. Due Process Not Violated Petitioner contends that his due process rights. As a general rule. as enumerated in Ang Tibay. not a quasi-judicial. must be observed. are essential for the performance of this function. in accordance with the standards laid down by the law. issuance. as elements of due process.[62] On the other hand. as enunciated in Ang Tibay v.pertains only to rank. it was necessary for him to comply with the eligibility prescribed at the time for that position. First.except in the case of first and second level employees in the civil service -. In exercising its quasi-judicial function. not to the position to which the employee may be appointed. One cannot claim security of tenure if one held no tenure prior to appointment. prior notice and hearing are not essential to the validity of rules or regulations promulgated to govern future conduct. bureaus and agencies. Security of Tenure Not Impaired The argument of petitioner that his security of tenure is impaired is unconvincing. petitioner had neither rank nor position prior to his reemployment. since it had been issued as an incident of the administrative body’s power to issue guidelines for government officials to follow in performing their duties. This distinction determines whether prior notice and hearing are necessary.[61] On these considerations. are not required since there is no determination of past events or facts that have to be established or ascertained. He points in particular to the CSC’s alleged failure to notify him of a hearing relating to the issuance of the challenged Circular. security of tenure in the Career Executive Service -.[59] We are not convinced. It needed no prior publication. These requirements include prior notice and hearing.hisreemployment[56] years later as department manager III at SBMA in 2001. [60] The determination of facts and the applicable law. it is elementary that due process requirements. the challenged Circular was an internal matter addressed to heads of departments. The classification of positions in career service was a quasi-legislative.[64] Significantly. Court of Appeals.[58] were violated. quasi-legislative power is exercised by administrative agencies through the promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great branches of the government. an administrative body adjudicates the rights of persons before it. as basis for official action and the exercise of judicial discretion.

1989. he failed to prove his eligibility to the position he was appointed to. however. Bids and Awards Committee. entitled "An Act Prescribing A Revised Compensation and Position Classification System in the Government and For Other Purposes". petitioners. Act 6758). J. but DENIED insofar as it prays for the reversal of the CSC Resolutions disapproving his appointment as department manager III of the Labor and Employment Center.respondents. were exempted from consolidation. 6758 (Rep. Prior to July 1. WHEREFORE. they were receiving honoraria as designated members of the LWUA Board Secretariat and the Pre-Qualification. the CSC correctly denied his permanent appointment. RODOLFO S. Certain additional compensations. the Petition is GRANTED insofar as it seeks legal standing for petitioner. Section 12 of said law provides for the consolidation of allowances and additional compensation into standardized salary rates. . took effect.[67] In sum. Republic Act No. Petitioners are employees of the Local Water Utilities Administration (LWUA). vs.Final Issue: Disapproval of Appointment Since petitioner had no CES eligibility. because the nature of the action did not involve the imposition of an administrative disciplinary measure. POZON AND other similarly situated personnel of the LOCAL WATER UTILITIES ADMINISTRATION (LWUA). merely examines the conformity of the appointment with the law and the appointee’s possession of all the minimum qualifications and none of the disqualification. [66] The CSC. Act 6758. Subic Bay Metropolitan Authority.: The pivotal issue raised in this petition is whether or not the petitioners are entitled to the payment of honoraria which they were receiving prior to the effectivity of Rep. JAMORALIN in his capacity as COA-LWUA Corporate Auditor. Costs against petitioner. PURISIMA. in approving or disapproving an appointment. COMMISSION ON AUDIT AND LEONARDO L. The appointee need not have been previously heard. On July 1. VENUS M. DE JESUS. while petitioner was able to demonstrate his standing to appeal the CSC Resolutions to the courts. SO ORDERED. 1989. EDELWINA DE PARUNGAO.

10 (DBM-CCC No. petitioners stressed. being received by incumbents as of July 1. 10). petitioners contend that DBM-CCC No. the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. the COA upheld the validity and effectivity of DBM-CCC No. 5. 12. . and such other additional compensation not otherwise specified herein as may be determined by the DBM. Rep. — Allowances. disallowed on post audit. Aggrieved. 10 and sanctioned the disallowance of petitioners' honoraria.6 of DBM-CCC No. shall be discontinued effective November 1. reads — Sec. petitioners appealed to the COA. 10. . except for representation and transportation allowances.Sec. clothing and laundry allowances. void. In its decision dated January 29. 10 is inconsistent with the provisions of Rep. 1989 no integrated into the standardized salary rates shall continue to be authorized. whether in cash or in kind. 1 (Emphasis supplied) To implement Rep. shall be deemed included in the standardized salary rules herein prescribed. Act 6758. 1989. Act 6758. subsistense allowance of marine officers and crew on board government vessels and hospital personnel. Paragraph 5. — Consolidation of Allowances and Compensation. posing the questions: (1) Whether or not par. 12 of Rep. 1989. respondent Leonardo Jamoralin. hazard pay: allowances of foreign services personnel stationed abroad. 3 Undaunted. 12. questioning the validity and enforceability of DBMCCC No. Act 6758 (the law it is supposed to implement) and. discontinuing without qualification effective November 1. the payment of honoraria to the herein petitioners. 2 Pursuant to the aforesaid Law and Circular. therefore. whether in cash or in kind. Such other additional compensation. as corporate auditor. 10 can supplant or negate the express provisions of Sec. 10 provides: Payment of other allowances fringe benefits and all other forms of compensation granted on top of basic salary. More specifically. Payment made for such allowances fringe benefits after said date shall be considered as illegal disbursement of public funds. petitioners found their way to this court via the present petition. and . all allowances and fringe benefits granted on top of basic salary.6 of DBM-CCC No. . And it is without force and effect because it was not published in the Official Gazette. 1993. Act 6758 which it seeks to implement.

12 of Rep. Before resolving the other issue — whether or not Paragraph 5.6 of DBM-CCC No. 10 has legal force and effect notwithstanding the absence of publication thereof in the Official Gazette. Act 6758 which it seeks to implement. the grant of honoraria or like allowances requires a specific legal or statutory authority. 10 is legally effective despite its lack of publication in the Official Gazette. resolution of the first issue posited by petitioner would not be necessary. This should take precedence because should we rule that publication in the Official Gazette or in a newspaper of general circulation in the Philippines 6 is sine qua non to the effectiveness or enforceability of DBM-CCC No. 4 Respondent COA.(2) Whether or not DBM-CCC No. When an implementing rule is inconsistent or repugnant to the provision of the statute it seeks to interpret. 1989. for the reason that they are not listed as exceptions under Sec. 10 can supplant or negate the pertinent provisions of Rep. 5. To buttress petitioners' stance. 10 need not be published for it is merely an interpretative regulation of a law already published 5. the DBM Secretary asserted that the honoraria in question are considered included in the basic salary. pointed out that to allow honoraria without statutory. In his Motion for Leave to intervene. that: . The applicable provision of law requiring publication in the Official Gazette is found in Article 2 of the New Civil Code of the Philippines. Act 6758. 10 is a nullity for being inconsistent with and repugnant to the very law it is intended to implement. 12 of Rep. 10 is a patient nullity. 5. 1989. opining that Sec. Act 6758 which authorizes payment of additional compensation not integrated into the standardized salary which incumbents were enjoying prior to July 1." Therefore. on the other hand. the mandate of the statute must prevail and must be followed. And DBM-CCC No. 10 prohibiting fringe benefits and allowances effective November 1. following the settled principle that implementing rules must necessarily adhere to and not depart from the provisions of the statute it seeks to implement. .6 of DBM-CCC No. Article IX-B of the Constitution which proscribes payment of "additional or double compensation. the Solicitor General presented a Manifestation and Motion in Lieu of Comment. 10. would run counter to Sec. as in this case. it is crystal clear that Section 5. we have to tackle first the other question whether or not DBM-CCC No. . presidential or DBM authority. Petitioners are of the view that par. unless specifically authorized by law.6 of DBM-CCC No. The Solicitor General theorized. which reads: . 8.6 of DBM-CCC No. An implementing rule can only be declared valid if it is in harmony with the provision of the legislative act and for the sole purpose of carrying into effect its general provisions. COA concluded. is violative of Sec.

even the charter of a city must be published notwithstanding that it applies to only one portion of the national territory and directly affects only the inhabitants of that place. Interpretative regulations and those merely internal in nature. which shall begin after fifteen days after publication unless a different effectivity date is fixed by the legislature. need not be published. we rule in the affirmative. even. This code shall take effect one year after such publication. vs. Laws shall take effect after fifteen days following the completion of their publications in the Official Gazette. All presidential decrees must be published. shall be published as a condition for their effectivity. 10 is in the nature of an administrative circular the purpose of which is to enforce or implement an existing law. Stated differently.Art. Torres. that is. Administrative rules and regulations must also be published if their purpose is to enforced or implement existing law pursuant to a valid delegation. including. 2. at present. Accordingly. The circulars issued by the Monetary Board must be published if they are meant not merely interpret but to "fill in details" of the Central Bank Act which that body supposed to enforce. publication in the Official Gazette or in a newspaper of general circulation in the Philippines is required since DBM-CCC No. . regulating only the personnel of the administrative agency and not the public. On the need for publication of subject DBM-CCC No. Inc. directly conferred by the Constitution. thus: We hold therefore that all statutes. including those of local application and privates laws. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. DBM-CCC No. this Court succinctly construed the aforecited provision of law in point. In Tanada v. to be effective and enforceable. Tuvera. (Emphasis ours) The same ruling was reiterated in the case of Philippine Association of Service Exporters. 212 SCRA 299 [1992]. 10. 146 SCRA 453. 454. Following the doctrine enunciated in Tanada. say those naming a public place after a favored individual or exempting him from a certain prohibitions or requirements. 10 must go through the requisite publication in the Official Gazette or in a newspaper of general circulation in the Philippines. unless it is otherwise provided. Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or.

SO ORDERED. SENATOR GREGORIO B. THE PANEL OF INVESTIGATING PROSECUTORS OF THE DEPARTMENT OF JUSTICE (LEO DACERA. This approach is more in keeping with democratic precepts and rudiments of fairness and transparency. At the very least. 2003. the assailed Decision of respondent Commission on Audit is SET ASIDE. On September 22.: Before the Court is the motion filed by petitioner to cite respondent DOJ Panel of Investigating Prosecutors (respondent for brevity) in contempt of court for alleged blatant disregard and defiance of the agreement of the parties with this Court to maintain the status quo before the filing of their petition for certiorari under Rule 65 of the Rules of Court. 1989. DACANAY. 10. WHEREFORE. when it tends to deprive government workers of their allowances and additional compensation sorely needed to keep body and soul together. CIDG-PNP-P/DIRECTOR EDUARDO MATILLANO. starting November 1. It is something more than that. 2003. as required by law. petitioner. it is decisively clear that DBM-CCC No. J. the government officials and employees concerned should be apprised and alerted by the publication of subject circular in the Official Gazette or in a newspaper of general circulation in the Philippines — to the end that they be given amplest opportunity to voice out whatever opposition they may have. SUSAN F. EDNA A. HONASAN II. OMBUDSMAN SIMEON V. And why not. In light of the foregoing disquisition on the ineffectiveness of DBM-CCC No.). JR. and to ventilate their stance on the matter. MARCELO. CAPONONG. Parties submitted their respective memoranda as required by the . before the said circular under attack may be permitted to substantially reduce their income. VALENZUELA AND SEBASTIAN F. is not a mere interpretative or internal regulation. respondents. petitioner filed a petition for certiorari with prayer for the issuance of a temporary restraining order and writ of preliminary injunction against respondents alleging grave abuse of discretion on the part of respondent Panel for assuming jurisdiction to conduct the preliminary investigation on the charge of coup d’etat against petitioner. RESOLUTION AUSTRIA-MARTINEZ. the Petition is hereby GRANTED. AND THE HON. No pronouncement as to costs.In the present case under scrutiny. 10 due to its nonpublication in the Official Gazette or in a newspaper of general circulation in the country. Respondents filed their respective comments and petitioner his reply thereto. which completely disallows payment of allowances and other additional compensation to government officials and employees. resolution of the other issue at bar is unnecessary. An oral argument on the case was held on November 18. vs. and respondents are ordered to pass on audit the honoraria of petitioners.

the latter has belittled. Wherefore. Petitioner received a copy of the decision on April 22. no such attitude or intent is discernible from its assailed action in proceeding with the preliminary investigation . until that period. On April 23. et al. the Court’s decision dated April 13. and to afford respondent full opportunity to controvert the allegations of the complaint and to adduce evidence. 2004 to file his motion for reconsideration. a virtual defiance of the court.. Honasan II. with the assurance of the Chief State Prosecutor Jovencito R. confirming that this Investigating Panel has jurisdiction to investigate the instant complaint against respondent Senator Gregorio B. he intends to file a motion for reconsideration within the reglementary period. In its Comment.Court. Petitioner now comes before this Court with a motion to cite respondent in contempt alleging that the issuance of the assailed order is in direct contravention and flagrant violation of the agreement of the parties as stated in the Court’s Resolution dated November 18. 2004. thus he has until May 7. Zuño. 2004. respondent(s) thru counsel are hereby given a final extension of up to 3 May 2004 within which to file their counter-affidavit and controverting evidence furnishing with a copy thereof complainant with proof of service thereof to this Panel. 2004. the decision dated April 13. the assailed order requiring him to submit his counter-affidavit is premature and intended to pre-empt and render futile and nugatory any action of petitioner with respect to the Court’s decision dated April 13. 2004 is not yet final and executory. 2004.e. and therefore. 2003. and the Panel’s order only confirms his fear that his preliminary investigation and detention are being railroaded. degraded. obstructed and impeded the administration of justice and has wantonly defied the Court’s authority. which categorically provides: Further.. the submission of petitioner’s counter-affidavit would upset the status quo sought to be maintained. a flouting or arrogant belligerence. No. 159747 dated 13 April 2004. Petitioner argues that he still has 15 days from receipt of the Court’s decision to file a motion for reconsideration.R. i. will maintain the STATUS QUO before the filing of the petition. with the assailed order of the respondent panel requiring him to submit his counter-affidavit. in the interest of justice. the Court rendered a decision dismissing the petition and upholding the concurrent jurisdiction of the respondent to conduct the preliminary investigation. until May 7. respondent contends that: contempt of court presupposes a contumacious attitude. it was agreed that the Department of Justice. respondent issued its assailed order as follows: In the light of the ruling of the Supreme Court in G. On April 13. subverting his right to due process. 2004. 2004 has not lifted said directives to the parties to maintain the status quo nor did the decision automatically lift the status quo order.

as a manifestation of good faith. 1 The power to punish for contempt of court should be exercised on the preservative and not on the vindictive principle. the charges against petitioner was filed in August 2003 and the preliminary investigation was pending since then because of the jurisdictional issue raised before this Court which was decided on April 13. intent. the charges against petitioner was filed with the DOJ in August 2003 and since then. As respondent has explained in its Comment. Respondent issued its assailed order requiring petitioner to submit his counter-affidavit after receipt of the Court’s decision dated April 13. but such conduct as tends to bring the authority of the court and administration of law into disrepute or in some manner to impede the due administration of justice. and the good faith or lack of it. 2004 upholding respondent’s authority to conduct the preliminary investigation on the charge of coup d’etatagainst petitioner. respondent had stopped from further proceeding with the preliminary investigation while the case is pending before the court. respondent desisted from further proceeding with the investigation and deferred any action until after the Court’s decision on April 13. It signifies not only a willful disregard or disobedience of the court’s orders.2 Only occasionally should the court invoke its inherent power in order to retain that respect without which the administration of justice may falter or fail. otherwise. Such power being drastic and extraordinary in its nature should not be resorted to unless necessary in the interest of justice. 2003. 2004. We deny the motion to cite respondent Panel in contempt of court. Although the Court’s decision dated April 13. the preliminary . Contempt of court is defined as disobedience to the court by acting in opposition to its authority. 2004.since the respondent issued the assailed Order in good faith and in the conscientious implementation of the Court’s decision upholding the concurrent jurisdiction of the DOJ to investigate the charges against petitioner for the crime of coup d’etat. and doubts should be resolved in favor of the person against whom proceedings have been brought. 2004 is not yet final as of the date of the issuance of the said assailed order. the subject order was not in any manner effected to railroad petitioner’s arrest and detention but to serve his right to due process by giving him all the opportunity to controvert the accusations against him and to adduce evidence in his behalf. the court finds no contemptuous intent on the part of respondent to impede the administration of justice. 2004. however. contempt partakes of the nature of a criminal offense. upon receipt of such decision. justice and dignity. in contempt proceeding. of the alleged contemnor should be considered. and only in cases of clear and contumacious refusal to obey should the power to punish for contempt of court be exercised. it has no intention to willfully disregard the authority of the Court since the assailed order was promulgated in furtherance and in the exercise of their authority to conduct preliminary investigation on charges against public officers and employees as mandated by the Constitution and laws as confirmed by the Court’s decision dated April 13.3 In compliance with the Court’s Resolution dated November 18. goes to the gravamen of the offense. the respondent could have immediately filed the information against petitioner the moment he failed to submit his counter-affidavit. respondent issued the assailed order with the objective of resolving the investigation taking into account petitioner’s right to a speedy dispos ition of the case against him.

concur. RIMANDO. respondent. as herein earlier defined by the Court. ARCEGA. NORMAN A. Quisumbing. Corona. GANCAYCO. respondent issued the assailed order taking into account petitioner’s right to a speedy disposition of his case. verification with the Court’s docket section reveals that petitioner filed his motion for reconsideration only on June 8. Ynares-Santiago. Vitug. ELPEDIO M. JR. The Solicitor General for respondents. J.. Panganiban. ALMAZAN. MESINA. tips. SO ORDERED. The Court’s decision dated April 13. LUPO L. JJ. Balgos & Perez Law Offices for petitioners. and that he has until May 7. a copy of the Court’s decision upholding respondent’s authority to conduct preliminary investigation. there is no longer any impediment for respondent to proceed with the preliminary investigation and for petitioner to comply with the respondent’s order to submit his counter-affidavit. or the like three (3) days before the date of the examination? Theses are the issues presented to the court by this petition for certiorari to review the decision of the Court . KARL CAESAR R. CarpioMorales. REGALADO. vs. COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION. Sr.net Petitioner asserts in his Motion that he received on April 22. receiving handout materials. petitioner. thus with the Court’s decision upholding their jurisdiction. RAYMOND S. BLAS. WHEREFORE. Callejo. and Tinga. Carpio. or thirty days late. The Court finds respondent’s explanation satisfactory and does not see the act of respondent as contumacious. CATAPANG.investigation has been pending. ERNESTOC. ALEXANDER R. However.lawphil. JOCELYN P. LUPANGCO. Jr. JEROME O. Puno. 2004 to file his motion for reconsideration.: Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examiness from attending review classes. Azcuna. REGUYAL. Davide. 2004 has already attained finality as of May 8. 2004. Clearly. respondent’s intention is to give respondent all the opportunity to controvert the accusation against him and to adduce evidence in his behalf. petitioner’s motion to cite respondent in contempt of court is DENIED. 2004. ENRICO V... Respondent is required to give petitioner a fresh period from receipt of this Resolution to submit his counter-affidavit.. MANGKAL. Hence. 2004.

1986. 1986 issued by the Regional Trial Court of Manila. 10598. briefing. 8. 105 as parts of its "Additional Instructions to Examiness. respondent PRC. or any tip from any school. lecturer. 86-37950 entitled " Lupo L. college or university. Art. 1987. 1987. Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 1987. 105 which it found to be unconstitutional. No cost in this instance. vs. Respondent PRC filed a motion to dismiss on October 21. to wit: WHEREFORE. Lupangco. herein petitioners. III of the Rules and Regulations of the Commission. Branch 32 in Civil Case No. Said petiton was granted in the Decision of the Court of Appeals promulagated on January 13. the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. In an Order of October 21. herein respondent Professional Regulation Commission (PRC) issued Resolution No. 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. . 86-37950 for want of jurisdiction over the subject matter thereof. in CA-G. all reviewees preparing to take the licensure examinations in accountancy schedule on October 25 and November 2 of the same year. conference or the like conducted by. 1 On October 16. Professional Regulation Commission.R. finding the petition meritorious the same is hereby GRANTED and the other dated October 21. or any review center or the like or any reviewer. or shall receive any hand-out. Not satisfied therewith. Branch XXXII. filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. 1986. filed on their own behalf of all others similarly situated like them. * declaring null and void the other dated Ocober 21. with the Regional Trial Court of Manila. The respondent court is further directed to dismiss with prejudice Civil Case No. et al. on November 10. 1986 issued by respondent court is declared null and void." The records shows the following undisputed facts: On or about October 6. SP No. review material. 1986." to all those applying for admission to take the licensure examinations in accountancy. instructor official or employee of any of the aforementioned or similars institutions during the three days immediately proceeding every examination day including examination day. a complaint for injuction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the abovementioned resolution and to declare the same unconstitution.of Appeals promulagated on January 13. The resolution embodied the following pertinent provisions: No examinee shall attend any review class.

the ruling was specifically limited to the Securities and Exchange Commission. stated as its basis its conclusion that the Professional Regulation Commission and the Regional Trial Court are coequal bodies. The respondent court erred when it place the Securities and Exchange Commission and the Professional Regulation Commsision in the same category. it was stressed that if an order of the Securities and Exchange Commission is erroneous. Upon the other hand. then. 902A. Lantin. Luna. In Pineda vs. 635. Thus it held — That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court is beyond question. On the contrary. 83 and Presidential Decree No. with respect to the Securities and Exchange Commission. the appropriate remedy take is first. We rule in favor of the petitioner. 83. 4 which cites Pineda vs. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. We explained that whenever a party is aggrieved by or disagree with an order or ruling of the Securities and Exchange Commission. After a close scrutiny of the facts and the record of this case. creating the . 3 To strenghten its position. the laws cited explicitly provide with the procedure that need be taken when one is aggrieved by its order or ruling.SO ORDERED. this petition. the Court of Appeals relied heavily on National Electrification Administration vs. Luna. there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No. Likewise. as amended by Republic Act No. Lantin 5 and Philippine Pacific Fishing. he cannot seek relief from courts of general jurisdiction since under the Rules of Court and Commonwealth Act No. Inc. 902-A. The Court of Appeals. As alraedy mentioned. 6 where this Court held that a Court of First Instance cannot interfere with the orders of the Securities and Exchange Commission. 2 Hence. Inc. Unlike Commonwealth Act No.. in Philippine Pacific Fishing Co. within the Commission itself. 223. It is glaringly apparent that the reason why this Court ruled that the Court of First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by the law. vs. creating and setting forth the powers and functions of the old Securities and Exchange Commission. the law creating the new Securities and Exchange Commission. 105. his remedy is to go the Supreme Court on a petition for review. The cases cited by respondent court are not in point. and co-equal bodies have no power to control each other or interfere with each other's acts. Mendoza. there is no provision in Presidential Decree No. vs. to the Supreme Court as mandated in Presidential Decree No. the two being co-equal bodies.

the executives. the enforcement of the circular would impair some contracts already entered into by public school teachers. now the Regional Trial Court. a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because. that orders or resolutions of the Commission are appealable either to the Court of Appeals or to theSupreme Court. apply or implement it (the law). it is not to be implied therefrom that the Executive is being made subject and subordinate to the courts. Consequently." In resolving the issue. Br. 7 What is clear from Presidential Decree No. each supreme within its own assigned powers and duties. the separation of powers into three co-equal departments. A judicial review of the President's decision on a case of an employee decided by the Civil Service Board of Appeals should be viewed in this light and the bringing of the case to the Courts should be governed by the same principles as govern the jucucial review of all administrative acts of all administrative officers. The following rulings buttress this conclusion: The objection to a judicial review of a Presidential act arises from a failure to recognize the most important principle in our system of government. It was the contention of petitioner therein that "the Court of First Instance is not empowered to amend.. The legality of his acts are under judicial review. 86-37950. CFI of Lanao del Norte. As in this case. 8 Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court). 11 is another case in point. reverse and modify what is otherwise the clear and explicit provision of the memorandum circular issued by the Executive Office which has the force and effect of law. 93 under the authority of then Secretary of Education Juan Manuel. 9 this rule was thoroughly propounded on. Sayo. Here. should fall within the general jurisdiction of the Court of First Instance. and the courts seek only to interpret. allegedly. II. "the Executive Office"' of the Department of Education and Culture issued Memorandum Order No.e. not because the Executive is inferior to the courts.Professional Regulation Commission. there should be no question but that the power of judicial review should be upheld. Presiding Judge. to wit: In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service Commission and of the residential Executive Asssistant is concerned. We held: . i. In Medalla vs. 223 is that the Professional Regulation Commission is attached to the Office of the President for general direction and coordination. which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional. 10 Republic vs. the legislative and the judicial. When a presidential act is challenged before the courts of justice. but because the law is above the Chief Executive himself. Civil Case No.

cashiers and disbursing officers from honoring special powers of attorney executed by the payee employees. contends that under Section 9. 1968.P. 12 (Emphasis supplied.P. 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. should be exempted from the general jurisdiction of the Regional Trial Court. Blg. Courts of first Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation (Sec. In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9. there has to be a final order or ruling which resulted . Respondent PRC. 129. as amended). — The Intermediate Appellate Court shall exercise: xxx xxx xxx (3) Exclusive appellate jurisdiction over all final judgments. except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution. . or awards of Regional Trial Courts and quasi-judicial agencies. . the provisions of this Act.. orders. We find no cogent reason why Resolution No. it is the Court of Appeals which has jurisdiction over the case. dated February 5. 9. Republic Act 296. The said law provides: SEC. issued by the respondent Professional Regulation Commission.) In San Miguel Corporation vs.. Jurisdiction. resolutions. and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not contrary to law. in defense of a legal right (freedom to enter into contracts) . paragraph 3 of B. II-240 (8) because the plaintiff therein asked the lower court for relief. 105. 129. instrumentalities. decisions. 13 We ruled that a judge of the Court of First Instance has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had been rendered. 44. boards or commissions. 93. with certain exceptions. which might run the risk of being violated by the threatened implementation of Executive Office Memorandum Circular No.. in the form of injunction. In view of the foregoing. . We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. The contention is devoid of merit. . paragraph 3 of B. Avelino. which prohibits. on the other hand. Blg.

the said resolution may not be deemed as a "final order reviewable by . hold hearings. The above rule was adhered to in Filipinas Engineering and Machine Shop vs. To expound thereon. the issue presented was whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding a contract to a private party which originated from an invitation to bid. (Emphasis supplied. far from convinced that an order of the COMELEC awarding a contract to a private party. not the Court of First Instance. The said issue came about because under the laws then in force. quasi-judicial adjudication would mean a determination of rights. and to exercise discretion of a judicial nature. of public administrative officers or bodies required to investigate facts. judgments. In Black's Law Dictionary. Ferrer. and hence. orders. We said: We are however. as a basis for their official action. What is contemplated by the term "final orders. or rulings of the Commission on Elections relative to the conduct of elections and the enforcement of election laws. Hence. In short.. of the COMELEC reviewable by certiorari by the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. discretion. which has exclusive jurisdiction to review on certiorari final decisions. privileges and duties resulting in a decision or order which applies to a specific situation . the COMELEC resolution awarding the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an incident of its inherent administrative functions over the conduct of elections. it has been consistently held that "it is the Supreme Court. 15 In this case. etc. or ascertain the existence of facts." 16 As to whether or not the Court of First Instance had jurisdiction in saidcase. quasi-judicial is defined as a term applied to the action. final awards. as a result of its choice among various proposals submitted in response to its invitation to bid comes within the purview of a "final order" which is exclusively and directly appealable to this court on certiorari.) xxx xxx xxx We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an order rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented evidence after which the questioned order was issued.from proceedings wherein the administrative body involved exercised its quasijudicial functions. decisions or orders of the Commission on Elections fall within the exclusive jurisdiction of the Supreme Court by way of certiorari. rulings and decisions. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations. and that this order of the commission was issued pursuant to its authority to enter into contracts in relation to election purposes. 14 This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. and draw conclusions from them.

Any question arising from said order may be well taken in an ordinary civil action before the trial courts.. no contempt order may be imposed by the COMELEC from said order. it is only said Court. and no direct and exclusive appeal by certiorari to this Tribunal lie from such order. instructor. petitioner Central Bank. or any tip from any school. like respondent in this case. argued that under Section 9." However. We made the following pronouncement: The contention is utterly devoid of merit.) 17 One other case that should be mentioned in this regard is Salud vs. Although We have finally settled the issue of jurisdiction. Of course.. . paragraph 3 of B. 129. 19 Anent the posture of the Central Bank. or receive any hand-out. (Emphasis supplied. The IAC has no appellate jurisdiction over resolution or orders of the Monetary Board. it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period.certiorari by the Supreme Court. for the very first time. We find it imperative to decide once and for all the validity of Resolution No. collge or university. On its face. No law prescribes any mode of appeal from the Monetary Board to the IAC. 18 Here. Central Bank of the Philippines. . boards" whose judgments are within the exclusive appellate jurisdiction of the IAC. Blg. Thus: The Central Bank and its Liquidator also postulate." that may review the Monetary Board's resolutions. review material. 105 so as to provide the much awaited relief to those who are and will be affected by it. We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. or any review center or the like or any reviewer. official or employee of any of the aforementioned or similar institutions . briefing. it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class. conference or the like. 86-37950 and enjoin the respondent PRC from enforcing its resolution.. We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and purity of the licensure examinations. "to the exclusion of the Regional Trial Courts. lecturer. hence. 21 The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC.. 20 In view of the foregoing. Being non-judicial in character. orders of the Monetary Board are appealable only to the Intermediate Appellate Court. its good aim cannot be a cloak to conceal its constitutional infirmities. that the Monetary Board is among the "quasi-judicial .P. Furthermore.

the enforcement of Resolution No. 105 is that it violates the academic freedom of the schools concerned. and giv to them their highest enjoyment. or riddled with corruption. This constitutional provision is not to be construed in a niggardly manner or in a grudging fashion. It has a wide sphere of autonomy certainly extending to the choice of students. It would follow then that the school or college itself is possessed of such a right. to pursue such callings and vocations as may be most suitable to develop his capacities. 23 Another evident objection to Resolution No. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days-when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the tree to get ride of a rotten branch. Respondent PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full fledged public accountant. It decides for itself its aims and objectives and how best to attain them. 22 Resolution No. it also infringes on the examinees' right to liberty guaranteed by the Constitution. We call attention to Our pronouncement in Garcia vs. Unless the means or methods of instruction are clearly found to be inefficient.. To be valid. At this juncture. It means freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth.. It is free from outside coercion or interference save possibly when the overriding public welfare calls for some restraint. Loyola School of Theology. What is . then they must be held to be invalid. impractical. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. As defined in a decision of the United States Supreme Court: The term "liberty" means more than mere freedom from physical restraint or the bounds of a prison. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued. such rules and regulations must be reasonable and fairly adapted to the end in view. Needless to say. They have every right to make use of their faculties in attaining success in their endeavors. The Faculty Admission Committee. as his judgment may dictate for the promotion of his happiness. review schools and centers may not be stopped from helping out their students. 105 is not only unreasonable and arbitrary.It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. 24 regarding academic freedom to wit: . 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized.

needed to be done by the respondent is to find out the source of such leakages and stop it right there. This decision is immediately executory. Inc. seeks to declare the nullity of Memorandum Circular No. petitioners. Petitioner Taxicab Operators of Metro Manila. 10591 and another judgment is hereby rendered declaring Resolution No. 1980. SO ORDERED. In the light of the above. Fixers or swindlers should be flushed out. each being an operator and grantee of such certificate of public convenience. If corrupt officials or personnel should be terminated from their loss. TAXICAB OPERATORS OF METRO MANILA. 105 null and void and of no force and effect for being unconstitutional. 1977. MELENCIO-HERRERA. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI. FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION. who are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to vehicular traffic. (TOMMI) is a domestic corporation composed of taxicab operators. J. INC. the decision of the Court of Appeals in CA-G. 1977. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed. Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila. of the Board of Transportation. Felicisimo Cabigao and Ace Transportation. 52. then so be it. SP No. then licenses should be suspended or revoked. respondent Board of Transportation (BOT) issued Memorandum Circular No.: This Petition for "Certiorari. 7742. and Memorandum Circular No.. dated October 10. 77-42 which reads: SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis . 223.. of the Bureau of Land Transportation.respondents. dated August 15. vs. These are all within the powers of the respondent commission as provided for in Presidential Decree No. Inc. No costs. We hereby REVERSE and SET ASIDE. On October 10. THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION.R. Strict guidelines to be observed by examiners should be set up and if violations are committed.

the latter believes that in six years of operation. a taxi operator has not only covered the cost of his taxis. it is the policy of the government to insure that only safe and comfortable units are used as public conveyances. As of December 31. 2. WHEREAS. 1978. Its implementation outside Metro. complained against. NOW. time and again. has. only taxis of Model 1973 and later shall be accepted for registration and allowed for operation. particularly in Metro-Manila. and condemned. In the registration of cards for 1978. the riding public. a program of phasing out of old and dilapidated taxis should be adopted. For an orderly implementation of this Memorandum Circular. 1977. in order that the commuting public may be assured of comfort. etc. WHEREAS. All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission. and in implementation of the same hereby promulgates the following rules and regulations: 1. all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. convenience. and safety. only taxis of Model 1972 and later shall be accepted for registration and allowed for operation. In the registration of cars for 1979. there shall be a six-year lifetime of taxi. 1 . the rules herein shall immediately be effective in Metro-Manila. after studies and inquiries made by the Board of Transportation. WHEREAS. the continued operation of old and dilapidated taxis. to wit: 1980 — Model 1974 1981 — Model 1975.Manila shall be carried out only after the project has been implemented in Metro-Manila and only after the date has been determined by the Board. pursuant to this policy. all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. and every year thereafter.WHEREAS. but has made reasonable profit for his investments. the Board hereby declares that no car beyond six years shall be operated as taxi. As of December 31. THEREFORE.

in 1981. The following schedule of phaseout is herewith prescribed for the guidance of all concerned: Year Model Automatic Phase-Out Year 1980 1974 1975 1976 1977 etc. those of model 1972.Pursuant to the above BOT circular. do not require any further dropping order from the BOT. On January 27. . seeking to nullify MC No. respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. at the time of registration. all within the National Capitol Region. dated August 15. To quote said Circular: Pursuant to BOT Memo-Circular No. and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. 1981. instructing the Regional Director. praying for an early hearing of their petition. etc. As such the units involved should be considered as automatically dropped as public utilities and. 77-42 or to stop its implementation. to implement said Circular. 1981. 77-42. docketed as Case No. those of model 1973. 2 In accordance therewith. as well as those of earlier models which were phased-out. therefore. the MV Registrars and other personnel of BLT. they are roadworthy and fit for operation. 1980. petitioners filed a Petition with the BOT. 52. provided that. 80-7553. in 1979. The case was heard on February 20. in 1980. and those of model 1974. taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974. On February 16. petitioners filed before the BOT a "Manifestation and Urgent Motion". Henceforth. 1981. taxi units with year models over six (6) years old are now banned from operating as public utilities in Metro Manila. cabs of model 1971 were phase-out in registration year 1978. 1981 1982 1983 Strict compliance here is desired.

" 3 On November 28. Granting. classification. allegedly made personal follow-ups of the case. On December 29. 101. Petitioners. or service to be furnished. through its President. Presentation of Additional Evidence and Submission of the Case for Resolution. 1981 to enable them. thereby safeguarding the petitioners' constitutional right to procedural due process? B. practices. imposed. and manifested that they would submit additional documentary proofs. measurements. regulations. 1982. petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10. offered the same. 1981. To fix just and reasonable standards. and (3) Protection against arbitrary and unreasonable classification and standard? On Procedural and Substantive Due Process: Presidential Decree No. to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model cabs are phased-out on January 1. but was later informed that the records of the case could not be located. 1981. "Manifestation. and followed by operators of public utility motor vehicles. observed. in case of denial. 1981 attached to petitioners' pleading entitled. Said proofs were submitted on March 27. 101. would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to.Petitioners presented testimonial and documentary evidence. 101 grants to the Board of Transportation the power 4. Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers: . Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. (1) Equal protection of the law. (2) Substantive due process. arguendo. the present Petition was instituted wherein the following queries were posed for consideration by this Court: A. that respondents did comply with the procedural requirements imposed by Presidential Decree No.

the Board shag proceed promptly along the method of legislative inquiry. that they were deprived of procedural due process. It is clear from the provision aforequoted. As held in Central Bank vs. the support agencies within the Department of Public Works. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. Apart from its own investigation and studies. in its discretion. as well as of liberty. In support of their submission that they were denied procedural due process. Hon. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected. The Board may also can conferences. are constitutionally required for the protection of life or vested property rights. plan or program in the implementation of this Decree. Cloribel and Banco Filipino. (Emphasis supplied) .Sec. nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular. Exercise of powers. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. unless the law provides otherwise. Petitioners cannot justifiably claim. information. 44 SCRA 307 (1972): Pevious notice and hearing as elements of due process. particularly the Highway Patrol Group. therefore. or data by operators or other persons that may be affected by the implementation of this Decree. the Philippine Constabulary. 2. Transportation and Communications. — In the exercise of the powers granted in the preceding section. require the submission of position papers or other documents. petitioners contend that they were not caged upon to submit their position papers. or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy. the Board. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. or employ any other suitable means of inquiry. however. plan or program. this being only one of the options open to the Board. may require the cooperation and assistance of the Bureau of Transportation. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises. when its limitation or loss takes place in consequence of a judicial or quasijudicial proceeding. generally dependent upon a past act or event which has to be established or ascertained. which is given wide discretionary authority. that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy.

safety and welfare of society. Considering that traffic conditions are not the same in every city. the requirement of due process has been met. however. A reasonable standard must be adopted to apply to an vehicles affected uniformly. To repeat the pertinent portion: For an orderly implementation of this Memorandum Circular. and justly. The product of experience shows that by that time taxis have fully depreciated. it is impractical to subject every taxicab to constant and recurring evaluation. their cost recovered. a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed. their actual physical condition should be taken into consideration at the time of registration. morals. and. Fernando "the necessities imposed . They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. 4 In fact. possible collusion. the rules herein shall immediately be effective in Metro Manila. therefore. peace. fairly. safety and general welfare of the people. 77-42. with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and only after the date has been determined by the Board. As enunciated in the preambular clauses of the challenged BOT Circular. and a fair return on investment obtained. of its police power. 5 It may also regulate property rights. the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. compared to those of other places. good order. can prescribe regulations to promote the health. At the outset it should be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. This is of common knowledge. The span of six years supplies that reasonable standard.Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected. It can prohibit all things hurtful to comfort. are subjected to heavier traffic pressure and more constant use. With that standard of reasonableness and absence of arbitrariness. 6 In the language of Chief Justice Enrique M. and even graft and corruption. not to speak of the fact that it can open the door to the adoption of multiple standards. As public contend. On Equal Protection of the Law: Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city. in the exercise. it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected. The State.

categorical and undeniable. the infringement of constitutional right must be clear. which make for real differences. To declare a law unconstitutional. It applies to things or persons Identically or similarly situated.by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". and that it must apply equally to each member of the class. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction. it need only be recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. the Writs prayed for are denied and this Petition is hereby dismissed. 7 In so far as the non-application of the assailed Circulars to other transportation services is concerned.10 WHEREFORE. 9 The challenged Circulars satisfy the foregoing criteria. No costs. SO ORDERED. Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. 8 What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege conferred and the liabilities imposed. .