ADMINISTRATIVE LAW blue sky and against the “sale of stock in fly-by-
PACU v Sec. of Education – Villa v Lazaro
(70) PACU v Sec. of Education
Facts: Sec. 1 of Act No. 2706 provides: “It shall
be the duty of the Secretary of Public Instruction
to maintain a general standard of efficiency in all
private schools and colleges of the Philippines so
that the same shall furnish adequate instruction
to the public… For this purpose, said Secretary
shall have authority to advise, inspect, and
regulate said schools and colleges in order to
determine the efficiency of instruction given in the
same.” Petitioners argue that nowhere in this Act
is there: (1) any description, either general or
specific, of what constitutes a general standard of
efficiency; (2) any indication of any basis or
condition to ascertain what is adequate
instruction to the public; (3) any statement of
conditions, acts, or factors which the said
Secretary must take into account to determine the
efficiency of instruction.
Held: Despite such alleged vagueness, the
Secretary of Education has fixed standards to
ensure adequate and efficient instruction, as
shown by the memoranda fixing or revising
curricula, the school calendars, entrance and final
examinations, admission and accreditation of
students, etc. Such show that the Legislature did,
and could validly rely upon the education,
experience and training of those in charge of the
Department of Education to ascertain and
formulate minimum requirements for adequate
instruction. Adequate and efficient instruction
should be considered sufficient as legislative
standards justifying delegation of authority to
regulate.
(71) People v Rosenthal & Osmeña
Facts: Act No. 2851 (Blue Sky Law) requires
every person, partnership or corporation to obtain
a certificate or permit from the Insular Treasurer
before offering for sale to the public speculative
securities. The Insular Treasurer, under the law,
is empowered to cancel or revoke a certificate or
permit previously issued by him. Appellants were
charged with having violated the Blue Sky Law;
however, they argued that the Act fixes no
standard or rule which can guide the Insular
Treasurer in determining the cases on which a
certificate or permit ought to issue.
Held: In view of the intention and purpose of Act
No. 2851 to protect the public against schemes
which have no more basis than so many feet of
night concerns, visionary oil wells, distant gold
mines, and other like fraudulent exploitations” –
“public interest” in this case is sufficient standard
pertaining to the issuance or cancellation of
certificates or permits. The term “public interest”
is not without a settled meaning.
(72) Cervantes v Auditor General
Facts: Petitioner was the manager of National
Abaca & Other Fibers Corporation (NAFCO). By
a resolution of the Board of Directors, he was
granted quarters allowance of not exceeding
PHP400 a month. Such resolution was
disapproved by the Government Enterprises
Council. The Council was created by the
President under EO No. 93, pursuant to RA No.
51, authorizing the President to effect reforms
and changes in GOCCs for the purpose of
promoting “simplicity, economy and efficiency” in
their operation. Petitioner challenged the action of
the Council, contending that EO No. 93 was an
undue delegation of power.
Held: So long as the legislature lays down a policy
and a standard is established by the statute, there
is no undue delegation of power. RA No. 51, in
authorizing the President, among others, to make
reforms and changes in GOCCs, lays down a
standard policy that the purpose shall be to meet
the exigencies attendant upon the establishment
of the free and independent Government of the
Philippines and to promote simplicity, economy
and efficiency in their operation.
(73) People v Jollife
Facts: Jollife was convicted for violating RA No.
265. When he was about to board a plane, 4
pieces of gold bullion were found in his body.
There was also found $100,000 traveller’s check
in his possession. Sec. 74 of said law conferred
upon the Monetary Board and the President the
power to subject to licensing all transactions in
gold and foreign exchange “in order to protect the
international reserve of the Central Bank during
an exchange crisis and to give the Monetary
Board and the Government time in which to take
constructive measures to combat such crisis.”
The Board is likewise authorized to take such
remedial measures as are appropriate to protect
the international stability of the peso. These
powers must be construed and exercised in
relation to the objectives of the law creating the
Central Bank, which are, among others, “to
maintain monetary stability and income in the
Philippines.”

Held: The standards provided by RA No. 265 are
sufficiently concrete and definite to vest in the
delegated authority the character of
administrative details in the enforcement of the
law and to place the grant to said authority
beyond the category of a delegation of legislative
powers.
(74) Balbuena v Sec. of Education
Facts: Sec. 1 of RA No. 1265 requires all
educational institutions to observe daily flag
ceremony, which shall be simple and dignified
and shall include the playing or singing of the
Philippine National Anthem. By virtue of Sec. 2
thereof, the Secretary of Education issued DO
No. 8 prescribing compulsory flag ceremony in all
schools. Petitioners, members of the religious
sect “Jehovah’s Witnesses,” challenged the
constitutionality of the Act as an undue delegation
of legislative power.
Held: The requirements of simplicity and dignity
of the flag ceremony and the singing of the
national constitute an adequate standard. That
the legislature did not specify the details of the
flag ceremony is no objection to the validity of the
statute, for all that is required of it is the laying
down of standard and policy that will limit the
discretion of the regulatory agency.
(75) Int’l Hardwood & Veneer v Pangil Fed. of
Labor
Facts: Petitioner IHVC claims that if Sec. 4 of
Commonwealth Act No. 103 is held to empower
the Court of Industrial Relations (CIR) to
determine minimum wages in connection with an
industrial dispute, the section is unconstitutional
as constituting an undue delegation of legislative
power to the court, depriving the petitioner of the
equal protection of the laws. Said provision does
not indicate in what manner, by what standards,
or in accordance with what rules, the CIR shall
determine minimum wages under said section.
Held: The discretionary power thus conferred is
judicial in character and does not infringe upon
the principle of separation of powers, the
prohibition against the delegation of legislative
function, and the equal protection clause of the
Constitution. Also, Sec. 20 of said law furnishes a
sufficient standard by which the court will be
guided in exercising its discretion in the
determination of any question or controversy
before it: “the court shall act according to justice
and equity and substantial merits to the case,
without regard to technicalities or legal forms.”
(76) Tatad v. Sec. of Energy
Facts: Petitioners assail Sec. 15 of RA No. 8180
and EO No. 392 as: (1) Sec. 15 of said law
constitutes an undue delegation of legislative
power to the President and the Secretary of
Energy because it does not provide a determinate
or determinable standard to guide the Executive
Branch in determining when to implement the full
deregulation of the downstream oil industry; and
(2) said EO is arbitrary and unreasonable
because it was enacted due to the alleged
depletion of the OPSF fund – a condition not
found in RA No. 8180.
Held: Sec. 15 of RA No. 8180: (1) is complete as
full deregulation at the end of March 1997 is
mandatory and the Executive has no discretion to
postpone it for any purported reason; and (2) lays
down the standard to guide the judgment of the
President – he is to time it as far as practicable
when the prices of crude oil and petroleum
products in the world market are declining and
when the exchange rate of the peso in relation to
the US dollar is stable. However, the Executive
Department failed to follow faithfully the
standards of said law when it considered the
extraneous factor of depletion of the OPSF fund.
The Executive is bereft of any right to alter either
by subtraction or addition the standards set in RA
No. 8180 for it has no power to make laws.
(77) Syquio v Sta. Maria
Facts: Private respondent Alfredo Clemente
sought to enjoin and prohibit petitioners herein,
together with one Romeo Mendoza, from
enforcing the decision of the Secretary of Public
Works and Communications in Administrative
Case R.A. 2056, No. 3862, ordering said private
respondent to remove the encroachments
constructed on the bed of the Taliptip River in
Bulacan and to restore said portion of the river to
its original condition. It turns out that private
respondent had filed with the respondent court
(CFI) Registration Case No. 2454-M seeking to
register his title to the said portion of the river
which he reclaimed and on which he has
constructed his sari-sari store. The said
application was pending when the decision of
petitioner Secretary was rendered.
Held: Secretary of Public Works and
Communications has jurisdiction to consider and
decide the administrative case during the
pendency of the land registration case. The
pendency of the land registration proceedings is
no ground for the suspension of the exercise of
the powers of the Secretary. Once he has
determined after due hearing where the claimant
was given an opportunity to be heard and to
present his evidence that the reclaimed area in
question constitutes an obstruction to a navigable
stream, he can order its removal or destruction.
(78) Lovina v Moreno
Facts: Numerous residents of Municipality of
Macabebe, Pampanga complained that
appellees had blocked the “Sapang Bulati,” a
navigable river, and asked that the obstructions
be ordered removed under the provisions of RA
No. 2056. After notice and hearing to the parties,
the Secretary of Public Works and
Communications ordered appellees to remove
the closures of “Sapang Bulati.” Appellees filed a
petition in the CFI, contending that the said law
constitutes an unlawful delegation of judicial
power to the said Secretary.
Held: Though the exercise of the Secretary’s
power under the said law necessarily involves the
determination of some questions of fact, such as
the existence of the stream and its previous
navigable character, these functions, whether
judicial or quasi-judicial, are merely incidental to
the exercise of the power granted by law to clear
navigable streams of unauthorized obstructions
or encroachments, and authorities are clear that
they are validly conferrable upon executive
officials provided the party affected is given notice
and opportunity to be heard.
(79) Miller v Mardo
Facts: G filed with the Regional Office No. 3 of the
Department of Labor a complaint against M,
alleging he was arbitrarily dismissed as driver
without being paid separation pay. M filed with the
CFI a petition praying for judgment prohibiting the
Chief Hearing Officer from proceeding with the
case for the reason that he had no jurisdiction to
hear and decide the subject matter of the
complaint. M questions the validity of
Reorganization Plan No. 20-A, prepared and
submitted by the Government Survey and
Reorganization Commission (GSRC) under the
authority of RA No. 997, as amended by RA No.
1241, insofar as it confers jurisdiction to the
Regional Offices of the Department of Labor
created in said Plan to decide claims of laborers
for wages, overtime and separation pay, etc.
Held: The “functions” referred to in RA No. 1241
which could thus be created, obviously refer
merely to administrative, not judicial functions.
For the GSRC was created to carry out the
reorganization of the Executive Branch of the
National Government which plainly did not
include the creation of courts. It may be conceded
that the legislature may confer on administrative
board or bodies quasi-judicial powers involving
the exercise of judgment and discretion, as
incident to the performance of administrative
functions. But in so doing, the legislative must
leave no doubt, as even such quasi-judicial
prerogatives must be limited, if they are to be
valid, only to those incidental to or in connection
with the performance of jurisdiction over the
matter exclusively vested in the court.
(80) Sta. Rosa Realty Dev’t Corp. v Amante
Facts: Private respondents Amante et al. alleged
that they are residents of Barangay Castile, the
area of which were occupied by their ancestors
since 1910. However, they claimed that SRRDC’s
security personnel illegally entered their
barangay, fenced the area, cut down the trees,
and burned their huts. As a result of these acts,
Amante et al. were deprived of the possession
and cultivation of their lands. SRRDC contends
the fact that DARAB has jurisdiction to pass upon
the issue of whether the properties in question are
subject to the CARP coverage, and that the
distribution of such properties to Amante et al. as
qualified beneficiaries is valid.
Held: There is no question that pursuant to Sec.
50 of RA 6657, the power to determine whether a
property is subject to the CARP coverage lies with
the DAR Secretary. The DAR’s jurisdiction under
said provision is two-fold: the first is essentially
executive and pertains to the enforcement and
administration of the laws, carrying them into
practical operation and enforcing their due
observe; the second is judicial and involves the
determination of rights and obligations of the
parties. Significantly, the DAR had already
determined that the properties are subject to
expropriation under the CARP and has distribute
the same to the farmer-beneficiaries.
(81) La Union Labor Union v PTFR
Facts: Petitioner LULU filed an action in the Court
of Industrial Relations (CIR) against the
respondent PTFR involving demands affecting
the improvement of the working conditions and
wages of its members employed by the PTFR.
The parties entered into an agreement which in a
way settled the labor dispute between them, but
with a proviso that all other points not covered by
the agreement (such as questions relating to
salary differentials and claims for overtime
compensation subsequent to the filing of the
petition) will be presented to the Wage
Administration Service (WAS) for adjudication.
Held: The ordinary function of the WAS is to hear
complaints or claims for wages and conciliate the
parties, if possible, and if they are willing to submit
their case for arbitration, to have said parties
enter into a written agreement that they submit
the case for arbitration and decision, and that they
would abide by the result of said arbitration;
otherwise, all that WAS could do, if it found the
claims for wages meritorious, is to file the
corresponding complaint in a competent court.
The agreement of the parties before the CIR,
particularly the proviso, was insufficient to confer
power and jurisdiction on the WAS to decide the
case.
(82) Feliciano v Director of Patents
Facts: An application for patent was filed with the
Patent Office. Pending examination of the
application, M filed a motion to intervene claiming
that the applicant inventors had sold and/or
bartered and assigned to him their right to
contract or deal with the sale of their invention to
or through the Corporation that they were then
organizing under his direction, and praying that
applicant-inventors acknowledge it and another
contract before a notary public, to have both
contracts recorded in the Patent Office and in the
office of the Register of Deeds, and that the
patent for the invention be issued in his (M’s)
name and in the name of the inventors. The
motion was denied on the ground that under the
provisions of the Patent Law, the Director of
Patents has no jurisdiction or power to decide the
question submitted to him.
Held: The case involves contractual obligations:
the alleged assignment is not of the invention but
it is an agreement whereby M is to act as selling
agent for the inventors of the patent (if granted)
and of the invention covered thereby, and to
receive compensation therefor. Under the
provisions of the Patent Law, the Director of
Patents has no power and authority to compel the
applicant-inventors to do what the appellant is
asking them to perform. What the appellant asked
the Director of Patents to do for him is essentially
a judicial function which would require the
determination or finding by a court of competent
jurisdiction as to whether there was a meeting of
the minds between the contracting parties.
(83) Roxas v Sayoc
Facts: The Collector of Customs declared certain
belongings forfeited to the Government. His
decision was affirmed by the Commissioner of
Customs. Subsequently, RA No. 650 (Import
Control Law) expired. Roxas contended that upon
the expiration of the said law, the Commissioner
of Customs lost jurisdiction over the case and,
therefore, his decision was null and void.
Held: It is a settled rule that a court, be it judicial
or administrative, that has acquired jurisdiction
over a case, retains it even after the expiration of
the law governing the case. The case at bar is
concerned with the expiration of a law, not with
the abrogation of law. The Commissioner of
Customs having acquired jurisdiction over the
case, the mere expiration of RA No. 650 did not
affect such jurisdiction.
(84) PNOC v PNB
Facts: Private respondent Savellano informed the
BIR that PNB had failed to withhold the 15% final
tax on interest earnings and/or yields from the
money placements of PNOC with the said bank,
in violation of PD No. 1931, which withdrew all tax
exemptions of GOCCs. PNOC proposed a
compromise by paying 30% of the basic tax, in
accordance with EO No. 44. The BIR
Commissioner accepted the
compromise. Savellano wrote the BIR to demand
payment of the balance of his informer’s reward,
to which the BIR Commissioner replied that
Savellano was already fully paid the informer’s
reward equivalent to 15% of the amount of tax
actually collected by the BIR pursuant to its
compromise agreement with PNOC. Savellano
sought a reconsideration of the decision,
questioning the legality of the compromise
agreement between the BIR and PNOC.
Held: The compromise agreement between
PNOC and BIR is void for being contrary to law
and public policy. PNOC could not apply for a
compromise under EO No. 44 because its tax
liability was not a delinquent account or a
disputed assessment. PNOC’s tax liability could
not be considered a delinquent account because
it was not self-assessed as the BIR conducted an
investigation after receiving information from
Savellano. Nor is there a deficiency assessment
present. Neither PNOC or PNB conducted self-
assessment, and neither was there any tax
assessment issued by the BIR against them.
PNOC and PNB were both silent about their tax
liabilities until they were assessed thereon.
Savellano is entitled to additional informer’s
award since the BIR had already collected the full
amount of the tax assessment against PNB,
pursuant to Sec. 316(1) of the 1977 NIRC.
(85) National Sugar Trading v PNB
Facts: The Philippine Sugar Commission
(PHILSUCOM) was created to be the sole buying
and selling agent of sugar on the quedan permit
level. Philippine Exchange Company, Inc.
(PHILEXCHANGE) was also created to serve as
the marketing agent of PHILSUCOM.
Subsequently, PHILEXCHANGE and/or PNB
(Philippine National Bank) were constituted as
the exclusive sugar trading agencies of the
government for buying sugar from planters or
millers, and selling or exporting them. The
NASUTRA replaced PHILEXCHANGE as the
marketing agent of PHILSUCOM. However, no
physical inventory of the sugar covered by the
quedans was made. NASUTRA and
PHILSUCOM failed to pay the sugar stocks
covered by quedan to PHILEXCHANGE
amounting to PHP498,828,845.03. When
NASUTRA still failed to pay it obligations, then
President Marcos dissolved NASUTRA.
President Aquino, during her term, created the
Sugar Regulatory Administration (SRA)
abolishing PHILSUCOM. Foreign banks gave
remittances on the proceeds of NASUTRA
amounting to PHP696 million. It should be
applied to the unpaid accounts of
NASURTA/PHILSUCOM with PNB and
PHILEXCHANGE. PNB applied it with the
accounts of PHILSUCOM with PHILEXCHANGE
which in turn, applied it with PHILEXCHANGE
with PNB.
Held: The relationship between NASUTRA/SRA
and PNB when the former constituted the latter
as its attorney-in-fact is not a simple
agency. NASUTRA/SRA has assigned and
practically surrendered its rights in favor of PNB
for a substantial consideration. To reiterate,
NASUTRA/SRA executed promissory notes in
favor of PNB every time it availed of the credit
line. The agency established between the parties
is one coupled with interest which cannot be
revoked or cancelled at will by any of the parties.
There exist clear indications that insofar as sugar
trading was concerned, PHILEXCHANGE and
PNB were treated as one entity. Purchases of
sugar of PHILEXCHANGE as the exclusive sugar
trading arm of PHILSUCOM were financed by
PNB pursuant to PD 579. More importantly, PNB,
a wholly owned bank of the government at that
time, in turn wholly owned and controlled
PHILEXCHANGE.
(86) Villa v Lazaro
Facts: AV received a “Show Cause” Order signed
by one M of the Human Settlement Regulatory
Commission (HSRC), requiring her to show
cause why a fine should not be imposed on her
or a cease-and-desist order issued against her for
her failure to show proof of locational clearance.
Appeal to the Commission Proper, and then to the
OP, was denied. Noteworthy are the following: (1)
neither J nor HSRC ever made know the
complaint of J to AV until much later, after HSRC
has rendered several adverse rulings against her;
(2) the orders of HSRC made no reference
whatever to the required documents AV had
already sent by registered mail; and (3) the
resolutions of OP likewise omitted to refer to the
telegrams and documents sent by J.
Held: These facts present a picture of official
incompetence or gross negligence and
abdication of duty, if not active bias and partiality
that is most reprehensible. While HSRC took
cognizance of the complaint and by telegram
required AV to submit a locational clearance,
HSRC did not then or at any time before issuance
of the order and writ of execution complained of
bother to put AV on notice, formally or otherwise,
of J’s complaint. It was therefore wholly natural
for AV to assume that no formal adversarial
inquiry was underway and that the telegram was
what it purported to be on its face: a routinary
request, issued moto proprio, to submit proof of
compliance with locational requirements. The
mischief done by HSRC’s baffling failure (or
obdurate refusal) even to acknowledge the
existence of the required documents furnished by
AV was perpetuated by the Commissioner Proper
and OP who threw out AV’s appeals with no
reference whatsoever thereto and thereby kept in
limbo evidence that would have been decisive. All
of the foregoing translate to a denial of due
process against which the defense of failure to
take timely appeal will not avail. The very informal
character of the so-called administrative
proceedings militates against imposing strict
observance of the limiting periods applicable to
proceedings otherwise properly initiated and
regularly conducted.