Administrative Law No.
2 Page |1
No. L-75697. June 18, 1987.*
VALENTIN TIO doing business under the name and style of OMI
ENTERPRISES, petitioner, vs. VIDEOGRAM REGULATORY BOARD,
MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR
and CITY TREASURER OF MANILA, respondents.
Constitutional Law; Constitutional requirement that “every bill shall embrace
only one subject which shall be expressed in the title thereof’ is sufficiently
complied with if the title be comprehensive enough to include the general
purpose it seeks to achieve and if all the parts of the statute are related and
germane to the subject matter expressed in the title or as long as they are
not inconsistent with or foreign to the general subject and title.—The
Constitutional requirement that “every bill shall embrace only one subject
which shall be expressed in the title thereof” is sufficiently complied with if the
title be comprehensive enough to include the general purpose which a
statute seeks to achieve. It is not necessary that the title express each and
every end that the statute wishes to accomplish. The requirement is satisfied
if all the parts of the statute are related, and are germane to the subject
matter expressed in the title, or as long as they are not inconsistent with or
foreign to the general subject and title. An act having a single general
subject, indicated in the title, may contain any number of provisions, no
matter how diverse they may be, so long as they are not inconsistent with or
foreign to the general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the general
object.” The rule also is that the constitutional requirement as to the title of a
bill should not be so narrowly construed as to cripple or impede the power of
legislation. It should be given a practical rather than technical construction.
Same; Same; Section 10 PD 1987 otherwise known as Videogram
Regulatory Board is not a Rider.—Section 10. Tax on Sale, Lease or
Disposition of Videograms. Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent (30%) of the
purchase price or rental rate, as the case may be, for every sale, lease or
disposition of a videogram containing a reproduction of any motion picture or
audiovisual program. Fifty percent (50%) of the proceeds of the tax collected
shall accrue to the province, and the other fifty percent (50%) shall accrue to
the municipality where the tax is collected; PROVIDED, That in Metropolitan
Manila, the tax shall be shared equally by the City/Municipality and the
Metropolitan Manila Commission. x x x x” The foregoing provision is allied
and germane to, and is reasonably necessary for the accomplishment of, the
general object of the DECREE, which is the regulation of the video industry
through the Videogram Regulatory Board as expressed in its title. The tax
provision is not inconsistent with, nor foreign to that general subject and title.
As a tool for regulation it is simply one of the regulatory and control
mechanisms scattered throughout the DECREE. The express purpose of the
DECREE to include taxation of the video industry in order to regulate and
rationalize the heretofore uncontrolled distribution of videograms is evident
from Preambles 2 and 5, supra. Those preambles explain the motives of the
lawmaker in presenting the measure. The title of the DECREE, which is the
creation of the Videogram Regulatory Board, is comprehensive enough to
include the purposes expressed in its Preamble and reasonably covers all its
provisions. It is unnecessary to express all those objectives in the title or that
the latter be an index to the body of the DECREE,
Same; Same; Same; Tax imposed under the Decree is not harsh;
oppressive, confiscatory and in restraint of trade but regulatory and a
revenue measure; The levy is for a public purpose.—Petitioner also submits
that the thirty percent (30%) tax imposed is harsh and oppressive,
confiscatory, and in restraint of trade. However, it is beyond serious question
that a tax does not cease to be valid merely because it regulates,
discourages, or even definitely deters the activities taxed. The power to
impose taxes is one so unlimited in force and so searching in extent, that the
courts scarcely venture to declare that it is subject to any restrictions
whatever, except such as rest in the discretion of the authority which
exercises it. In imposing a tax, the legislature acts upon its constituents. This
is, in general, a sufficient security against erroneous and oppressive taxation.
The tax imposed by the DECREE is not only a regulatory but also a revenue
measure prompted by the realization that earnings of videogram
establishments of around P600 million per annum have not been subjected
to tax, thereby depriving the Government of an additional source of revenue.
It is an end-user tax, imposed on retailers for every videogram they make
available for public viewing, It is similar to the 30% amusement tax imposed
or borne by the movie industry which the theater-owners pay to the
government, but which is passed on to the entire cost of the admission ticket,
thus shifting the tax burden on the buying or the viewing public. It is a tax that
is imposed uniformly on all videogram operators. The levy of the 30% tax is
for a public purpose. It was imposed primarily to answer the need for
regulating the video industry, particularly because of the rampant film piracy,
the flagrant violation of intellectual property rights, and the proliferation of
pornographic video tapes. And while it was also an objective of the DECREE
to protect the movie industry, the tax remains a valid imposition.

Same; Same; Same; Same; PD 1987 not an undue delegation of legislative
power.—Neither can it be successfully argued that the DECREE contains an
undue delegation of legislative power. The grant in Section 11 of the
DECREE of authority to the BOARD to “solicit the direct assistance of other
agencies and Units of the government and deputize, for a fixed and limited
period, the heads or personnel of such agencies and units to perform
enforcement functions for the Board” is not a delegation of the power to
legislate but merely a conferment of authority or discretion as to its
execution, enforcement, and implementation. “The true distinction is between
the delegation of power to make the law, which necessarily involves a
discretion as to what it shall be, and conferring authority or discretion as to its
execution to be exercised under and in pursuance of the law. The first cannot
be done; to the latter, no valid objection can be made.” Besides, in the very
language of the decree, the authority of the BOARD to solicit such assistance
is for a “fixed and limited period” with the deputized agencies concerned
being “subject to the direction and control of the BOARD.” That the grant of
such authority might be the source of graft and corruption would not
stigmatize the DECREE as unconstitutional. Should the eventuality occur,
the aggrieved parties will not be without adequate remedy in law.
PETITION to review the decision of the Metro Manila Commission.
The facts are stated in the opinion of the Court.
Nelson Y. Ng for petitioner.
The City Legal Officer for respondents City Mayor and City Treasurer.
MELENCIO-HERRERA, J.:
This petition was filed on September 1, 1986 by petitioner on his own behalf
and purportedly on behalf of other videogram operators adversely affected. It
assails the constitutionality of Presidential Decree No. 1987 entitled "An Act
Creating the Videogram Regulatory Board" with broad powers to regulate
and supervise the videogram industry (hereinafter briefly referred to as the
BOARD). The Decree was promulgated on October 5, 1985 and took effect
on April 10, 1986, fifteen (15) days after completion of its publication in the
Official Gazette.
On November 5, 1985, a month after the promulgation of the
abovementioned decree, Presidential Decree No. 1994 amended the
National Internal Revenue Code providing, inter alia:
Administrative Law No. 2 Page |2
SEC. 134. Video Tapes. — There shall be collected on each
processed video-tape cassette, ready for playback, regardless of
length, an annual tax of five pesos; Provided, That locally
manufactured or imported blank video tapes shall be subject to sales
tax.
On October 23, 1986, the Greater Manila Theaters Association, Integrated
Movie Producers, Importers and Distributors Association of the Philippines,
and Philippine Motion Pictures Producers Association, hereinafter collectively
referred to as the Intervenors, were permitted by the Court to intervene in the
case, over petitioner's opposition, upon the allegations that intervention was
necessary for the complete protection of their rights and that their "survival
and very existence is threatened by the unregulated proliferation of film
piracy." The Intervenors were thereafter allowed to file their Comment in
Intervention.
The rationale behind the enactment of the DECREE, is set out in its
preambular clauses as follows:
1. WHEREAS, the proliferation and unregulated circulation of
videograms including, among others, videotapes, discs, cassettes or
any technical improvement or variation thereof, have greatly
prejudiced the operations of moviehouses and theaters, and have
caused a sharp decline in theatrical attendance by at least forty
percent (40%) and a tremendous drop in the collection of sales,
contractor's specific, amusement and other taxes, thereby resulting
in substantial losses estimated at P450 Million annually in
government revenues;
2. WHEREAS, videogram(s) establishments collectively earn around
P600 Million per annum from rentals, sales and disposition of
videograms, and such earnings have not been subjected to tax,
thereby depriving the Government of approximately P180 Million in
taxes each year;
3. WHEREAS, the unregulated activities of videogram
establishments have also affected the viability of the movie industry,
particularly the more than 1,200 movie houses and theaters
throughout the country, and occasioned industry-wide displacement
and unemployment due to the shutdown of numerous moviehouses
and theaters;

4. "WHEREAS, in order to ensure national economic recovery, it is
imperative for the Government to create an environment conducive
to growth and development of all business industries, including the
movie industry which has an accumulated investment of about P3
Billion;
5. WHEREAS, proper taxation of the activities of videogram
establishments will not only alleviate the dire financial condition of
the movie industry upon which more than 75,000 families and
500,000 workers depend for their livelihood, but also provide an
additional source of revenue for the Government, and at the same
time rationalize the heretofore uncontrolled distribution of
videograms;
6. WHEREAS, the rampant and unregulated showing of obscene
videogram features constitutes a clear and present danger to the
moral and spiritual well-being of the youth, and impairs the mandate
of the Constitution for the State to support the rearing of the youth for
civic efficiency and the development of moral character and promote
their physical, intellectual, and social well-being;
7. WHEREAS, civic-minded citizens and groups have called for
remedial measures to curb these blatant malpractices which have
flaunted our censorship and copyright laws;
8. WHEREAS, in the face of these grave emergencies corroding the
moral values of the people and betraying the national economic
recovery program, bold emergency measures must be adopted with
dispatch; ... (Numbering of paragraphs supplied).
Petitioner's attack on the constitutionality of the DECREE rests on the
following grounds:
1. Section 10 thereof, which imposes a tax of 30% on the gross
receipts payable to the local government is a RIDER and the same is
not germane to the subject matter thereof;
2. The tax imposed is harsh, confiscatory, oppressive and/or in
unlawful restraint of trade in violation of the due process clause of
the Constitution;
Administrative Law No. 2 Page |3
3. There is no factual nor legal basis for the exercise by the
President of the vast powers conferred upon him by Amendment No.
6;
4. There is undue delegation of power and authority;
5. The Decree is an ex-post facto law; and
6. There is over regulation of the video industry as if it were a
nuisance, which it is not.
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only one
subject which shall be expressed in the title thereof" 1 is sufficiently complied
with if the title be comprehensive enough to include the general purpose
which a statute seeks to achieve. It is not necessary that the title express
each and every end that the statute wishes to accomplish. The requirement
is satisfied if all the parts of the statute are related, and are germane to the
subject matter expressed in the title, or as long as they are not inconsistent
with or foreign to the general subject and title. 2 An act having a single
general subject, indicated in the title, may contain any number of provisions,
no matter how diverse they may be, so long as they are not inconsistent with
or foreign to the general subject, and may be considered in furtherance of
such subject by providing for the method and means of carrying out the
general object." 3 The rule also is that the constitutional requirement as to the
title of a bill should not be so narrowly construed as to cripple or impede the
power of legislation. 4 It should be given practical rather than technical
construction. 5
Tested by the foregoing criteria, petitioner's contention that the tax provision
of the DECREE is a rider is without merit. That section reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of Videograms. —
Notwithstanding any provision of law to the contrary, the province
shall collect a tax of thirty percent (30%) of the purchase price or
rental rate, as the case may be, for every sale, lease or disposition of
a videogram containing a reproduction of any motion picture or
audiovisual program. Fifty percent (50%) of the proceeds of the tax
collected shall accrue to the province, and the other fifty percent
(50%) shall acrrue to the municipality where the tax is collected;
PROVIDED, That in Metropolitan Manila, the tax shall be shared

equally by the City/Municipality and the Metropolitan Manila
Commission.
xxx xxx xxx
The foregoing provision is allied and germane to, and is reasonably
necessary for the accomplishment of, the general object of the DECREE,
which is the regulation of the video industry through the Videogram
Regulatory Board as expressed in its title. The tax provision is not
inconsistent with, nor foreign to that general subject and title. As a tool for
regulation 6 it is simply one of the regulatory and control mechanisms
scattered throughout the DECREE. The express purpose of the DECREE to
include taxation of the video industry in order to regulate and rationalize the
heretofore uncontrolled distribution of videograms is evident from Preambles
2 and 5, supra. Those preambles explain the motives of the lawmaker in
presenting the measure. The title of the DECREE, which is the creation of
the Videogram Regulatory Board, is comprehensive enough to include the
purposes expressed in its Preamble and reasonably covers all its provisions.
It is unnecessary to express all those objectives in the title or that the latter
be an index to the body of the DECREE. 7
2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh
and oppressive, confiscatory, and in restraint of trade. However, it is beyond
serious question that a tax does not cease to be valid merely because it
regulates, discourages, or even definitely deters the activities taxed. 8 The
power to impose taxes is one so unlimited in force and so searching in
extent, that the courts scarcely venture to declare that it is subject to any
restrictions whatever, except such as rest in the discretion of the authority
which exercises it. 9 In imposing a tax, the legislature acts upon its
constituents. This is, in general, a sufficient security against erroneous and
oppressive taxation. 10
The tax imposed by the DECREE is not only a regulatory but also a revenue
measure prompted by the realization that earnings of videogram
establishments of around P600 million per annum have not been subjected
to tax, thereby depriving the Government of an additional source of revenue.
It is an end-user tax, imposed on retailers for every videogram they make
available for public viewing. It is similar to the 30% amusement tax imposed
or borne by the movie industry which the theater-owners pay to the
government, but which is passed on to the entire cost of the admission ticket,
thus shifting the tax burden on the buying or the viewing public. It is a tax that
is imposed uniformly on all videogram operators.
Administrative Law No. 2 Page |4
The levy of the 30% tax is for a public purpose. It was imposed primarily to
answer the need for regulating the video industry, particularly because of the
rampant film piracy, the flagrant violation of intellectual property rights, and
the proliferation of pornographic video tapes. And while it was also an
objective of the DECREE to protect the movie industry, the tax remains a
valid imposition.
The public purpose of a tax may legally exist even if the motive which
impelled the legislature to impose the tax was to favor one industry
over another. 11
It is inherent in the power to tax that a state be free to select the
subjects of taxation, and it has been repeatedly held that "inequities
which result from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation". 12 Taxation has been
made the implement of the state's police power.13
At bottom, the rate of tax is a matter better addressed to the taxing
legislature.
3. Petitioner argues that there was no legal nor factual basis for the
promulgation of the DECREE by the former President under Amendment No.
6 of the 1973 Constitution providing that "whenever in the judgment of the
President ... , there exists a grave emergency or a threat or imminence
thereof, or whenever the interim Batasang Pambansa or the regular National
Assembly fails or is unable to act adequately on any matter for any reason
that in his judgment requires immediate action, he may, in order to meet the
exigency, issue the necessary decrees, orders, or letters of instructions,
which shall form part of the law of the land."
In refutation, the Intervenors and the Solicitor General's Office aver that the
8th "whereas" clause sufficiently summarizes the justification in that grave
emergencies corroding the moral values of the people and betraying the
national economic recovery program necessitated bold emergency measures
to be adopted with dispatch. Whatever the reasons "in the judgment" of the
then President, considering that the issue of the validity of the exercise of
legislative power under the said Amendment still pends resolution in several
other cases, we reserve resolution of the question raised at the proper time.
4. Neither can it be successfully argued that the DECREE contains an undue
delegation of legislative power. The grant in Section 11 of the DECREE of
authority to the BOARD to "solicit the direct assistance of other agencies and
units of the government and deputize, for a fixed and limited period, the

heads or personnel of such agencies and units to perform enforcement
functions for the Board" is not a delegation of the power to legislate but
merely a conferment of authority or discretion as to its execution,
enforcement, and implementation. "The true distinction is between the
delegation of power to make the law, which necessarily involves a discretion
as to what it shall be, and conferring authority or discretion as to its execution
to be exercised under and in pursuance of the law. The first cannot be done;
to the latter, no valid objection can be made." 14 Besides, in the very
language of the decree, the authority of the BOARD to solicit such assistance
is for a "fixed and limited period" with the deputized agencies concerned
being "subject to the direction and control of the BOARD." That the grant of
such authority might be the source of graft and corruption would not
stigmatize the DECREE as unconstitutional. Should the eventuality occur,
the aggrieved parties will not be without adequate remedy in law.
5. The DECREE is not violative of the ex post facto principle. An ex post
facto law is, among other categories, one which "alters the legal rules of
evidence, and authorizes conviction upon less or different testimony than the
law required at the time of the commission of the offense." It is petitioner's
position that Section 15 of the DECREE in providing that:
All videogram establishments in the Philippines are hereby given a
period of forty-five (45) days after the effectivity of this Decree within
which to register with and secure a permit from the BOARD to
engage in the videogram business and to register with the BOARD
all their inventories of videograms, including videotapes, discs,
cassettes or other technical improvements or variations thereof,
before they could be sold, leased, or otherwise disposed of.
Thereafter any videogram found in the possession of any person
engaged in the videogram business without the required proof of
registration by the BOARD, shall be prima facie evidence of violation
of the Decree, whether the possession of such videogram be for
private showing and/or public exhibition.
raises immediately a prima facie evidence of violation of the DECREE when
the required proof of registration of any videogram cannot be presented and
thus partakes of the nature of an ex post facto law.
The argument is untenable. As this Court held in the recent case of Vallarta
vs. Court of Appeals, et al. 15
... it is now well settled that "there is no constitutional objection to the
passage of a law providing that the presumption of innocence may
Administrative Law No. 2 Page |5
be overcome by a contrary presumption founded upon the
experience of human conduct, and enacting what evidence shall be
sufficient to overcome such presumption of innocence" (People vs.
Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A
TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641).
And the "legislature may enact that when certain facts have been
proved that they shall be prima facie evidence of the existence of the
guilt of the accused and shift the burden of proof provided there be a
rational connection between the facts proved and the ultimate facts
presumed so that the inference of the one from proof of the others is
not unreasonable and arbitrary because of lack of connection
between the two in common experience". 16
Applied to the challenged provision, there is no question that there is a
rational connection between the fact proved, which is non-registration, and
the ultimate fact presumed which is violation of the DECREE, besides the
fact that the prima facie presumption of violation of the DECREE attaches
only after a forty-five-day period counted from its effectivity and is, therefore,
neither retrospective in character.
6. We do not share petitioner's fears that the video industry is being over-
regulated and being eased out of existence as if it were a nuisance. Being a
relatively new industry, the need for its regulation was apparent. While the
underlying objective of the DECREE is to protect the moribund movie
industry, there is no question that public welfare is at bottom of its enactment,
considering "the unfair competition posed by rampant film piracy; the erosion
of the moral fiber of the viewing public brought about by the availability of
unclassified and unreviewed video tapes containing pornographic films and
films with brutally violent sequences; and losses in government revenues due
to the drop in theatrical attendance, not to mention the fact that the activities
of video establishments are virtually untaxed since mere payment of Mayor's
permit and municipal license fees are required to engage in business. 17
The enactment of the Decree since April 10, 1986 has not brought about the
"demise" of the video industry. On the contrary, video establishments are
seen to have proliferated in many places notwithstanding the 30% tax
imposed.
In the last analysis, what petitioner basically questions is the necessity,
wisdom and expediency of the DECREE. These considerations, however,
are primarily and exclusively a matter of legislative concern.
 Administrative Law No. 2 Page |6

Only congressional power or competence, not the wisdom of the

action taken, may be the basis for declaring a statute invalid. This is
as it ought to be. The principle of separation of powers has in the
main wisely allocated the respective authority of each department
and confined its jurisdiction to such a sphere. There would then be
intrusion not allowable under the Constitution if on a matter left to the
discretion of a coordinate branch, the judiciary would substitute its
own. If there be adherence to the rule of law, as there ought to be,
the last offender should be courts of justice, to which rightly litigants
submit their controversy precisely to maintain unimpaired the
supremacy of legal norms and prescriptions. The attack on the
validity of the challenged provision likewise insofar as there may be
objections, even if valid and cogent on its wisdom cannot be
sustained. 18

In fine, petitioner has not overcome the presumption of validity which

attaches to a challenged statute. We find no clear violation of the Constitution
which would justify us in pronouncing Presidential Decree No. 1987 as
unconstitutional and void.

WHEREFORE, the instant Petition is hereby dismissed.

No costs.

SO ORDERED.

Teehankee, (C.J.), Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz, Paras,

Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

G.R. No. 111812. May 31, 1995.*
DIONISIO M. RABOR, petitioner, vs. CIVIL SERVICE COMMISSION,
respondent.
Civil Service Commission; Administrative Law; Test of a Valid Subordinate
Legislation; Statutory Construction; In subordinate, delegated rule-making by
administrative agencies, all that may be reasonably demanded is a showing
that the delegated legislation consisting of administrative regulations are
germane to the general purposes projected by the governing or enabling
statute.—Clearly, therefore, Cena when it required a considerably higher
degree of detail in the statute to be implemented, went against prevailing
doctrine. It seems clear that if the governing or enabling statute is quite
detailed and specific to begin with, there would be very little need (or
occasion) for implementing administrative regulations. It is, however,
precisely the inability of legislative bodies to anticipate all (or many) possible
detailed situations in respect of any relatively complex subject matter, that
makes subordinate, delegated rule-making by administrative agencies so
important and unavoidable. All that may be reasonably demanded is a
showing that the delegated legislation consisting of administrative regulations
are germane to the general purposes projected by the governing or enabling
statute. This is the test that is appropriately applied in respect of Civil Service
Memorandum Circular No. 27, Series of 1990, and to this test we now turn.
Same; Same; Retirement; The extension of service of government retirees
who have reached sixty-five years of age is an area that is covered by both
P.D. 1146 and the Administrative Code of 1987.—We consider that the
enabling statute that should appropriately be examined is the present Civil
Service law—found in Book V, Title I, Subtitle A, of Executive Order No. 292
dated 25 July 1987, otherwise known as the Administrative Code of 1987—
and not alone P.D. No. 1146, otherwise known as the “Revised Government
Service Insurance Act of 1977.” For the matter of extension of service of
retirees who have reached sixty-five (65) years of age is an area that is
covered by both statutes and not alone by Section 11 (b) of P.D. No. 1146.
This is crystal clear from examination of many provisions of the present civil
service law.
Same; Same; Same; The physiological and psychological processes
associated with ageing in human beings are in fact related to the efficiency
and quality of the service that may be expected from individual persons.—
We find it very difficult to suppose that the limitation of permissible
extensions of service after an employee has reached sixty-five (65) years of
Administrative Law No. 2 Page |7
age has no reasonable relationship or is not germane to the foregoing
provisions of the present Civil Service Law. The physiological and
psychological processes associated with ageing in human beings are in fact
related to the efficiency and quality of the service that may be expected from
individual persons.
Same; Same; Same; Civil Service Memorandum Circular No. 27, Series of
1990, more specifically par. 1 thereof, is valid and effective, and the doctrine
in Cena v. Civil Service Commission, 211 SCRA 179 (1992), is modified
accordingly.—Our conclusion is that the doctrine of Cena should be and is
hereby modified to this extent: that Civil Service Memorandum Circular No.
27, Series of 1990, more specifically paragraph (1) thereof, is hereby
declared valid and effective. Section 11 (b) of P.D. No. 1146 must,
accordingly, be read together with Memorandum Circular No. 27. We
reiterate, however, the holding in Cena that the head of the government
agency concerned is vested with discretionary authority to allow or disallow
extension of the service of an official or employee who has reached sixty-five
(65) years of age without completing fifteen (15) years of government
service; this discretion is, nevertheless, to be exercised conformably with the
provisions of Civil Service Memorandum Circular No. 27, Series of 1990.
PETITION for review of a decision of the Civil Service Commission.
The facts are stated in the opinion of the Court.
Public Attorney’s Office for petitioner.
FELICIANO, J.:
Petitioner Dionisio M. Rabor is a Utility Worker in the Office of the Mayor,
Davao City. He entered the government service as a Utility worker on 10
April 1978 at the age of 55 years.
Sometime in May 1991,1 Alma, D. Pagatpatan, an official in the Office of the
Mayor of Davao City, advised Dionisio M. Rabor to apply for retirement,
considering that he had already reached the age of sixty-eight (68) years and
seven (7) months, with thirteen (13) years and one (1) month of government
service. Rabor responded to this advice by exhibiting a "Certificate of
Membership"2 issued by the Government Service Insurance System ("GSIS")
and dated 12 May 1988. At the bottom of this "Certificate of Membership" is a
typewritten statement of the following tenor: "Service extended to comply 15
years service reqts." This statement is followed by a non-legible initial with
the following date "2/28/91."

Thereupon, the Davao City Government, through Ms. Pagatpatan, wrote to
the Regional Director of the Civil Service Commission, Region XI, Davao City
("CSRO-XI"), informing the latter of the foregoing and requesting advice "as
to what action [should] be taken on this matter."
In a letter dated 26 July 1991, Director Filemon B. Cawad of CSRO-XI
advised Davao City Mayor Rodrigo R. Duterte as follows:
Please be informed that the extension of services of Mr.
Rabor is contrary to M.C. No. 65 of the Office of the
President, the relevant portion of which is hereunder quoted:
Officials and employees who have reached
the compulsory retirement age of 65 years
shall not be retained the service, except for
extremely meritorious reasons in which case
the retention shall not exceed six (6)
months.
IN VIEW WHEREFORE, please be advised that the services
of Mr. Dominador [M.] Rabor as Utility Worker in that office,
is already non-extend[i]ble.3
Accordingly, on 8 August l991, Mayor Duterte furnished a copy of the 26 July
1991 letter of Director Cawad to Rabor and advised him "to stop reporting for
work effective August 16, 1991."4
Petitioner Rabor then sent to the Regional Director, CSRO-XI, a letter dated
14 August 1991, asking for extension of his services in the City Government
until he "shall have completed the fifteen (15) years service [requirement] in
the Government so that [he] could also avail of the benefits of the retirement
laws given to employees of the Government." The extension he was asking
for was about two (2) years. Asserting that he was "still in good health and
very able to perform the duties and functions of [his] position as Utility
Worker," Rabor sought "extension of [his] service as an exception to
Memorandum Circular No. 65 of the Office of the President."5 This request
was denied by Director Cawad on 15 August 1991.
Petitioner Rabor next wrote to the Office of the President on 29 January 1992
seeking reconsideration of the decision of Director Cawad, CSRO-XI. The
Office of the President referred Mr. Rabor's letter to the Chairman of the Civil
Service Commission on 5 March 1992.
Administrative Law No. 2 Page |8
In its Resolution No. 92-594, dated 28 April 1992, the Civil Service
Commission dismissed the appeal of Mr. Rabor and affirmed the action of
Director Cawad embodied in the latter's letter of 26 July 1991. This
Resolution stated in part:
In his appeal, Rabor requested that he be allowed to
continue rendering services as Utility Worker in order to
complete the fifteen (15) year service requirement under
P.D. 1146.
CSC Memorandum Circular No. 27, s. 1990 provides, in part:
1. Any request for extension of service of
compulsory retirees to complete the fifteen
years service requirement for retirement
shall be allowed only to permanent
appointees in the career service who are
regular members of the Government Service
Insurance System (GSIS) and shall be
granted for a period of not exceeding one (1)
year.
Considering that as early as October 18, 1988, Rabor was
already due for retirement, his request for further extension
of service cannot be given due course.6 (Emphasis in the
original)
On 28 October 1992, Mr. Rabor sought reconsideration of Resolution No. 92-
594 of the Civil Service Commission this time invoking the Decision of this
Court in Cena v. Civil Service Commission.7 Petitioner also asked for
reinstatement with back salaries and benefits, having been separated from
the government service effective 16 August 1991. Rabor's motion for
reconsideration was denied by the Commission.
Petitioner Rabor sent another letter dated 16 April 1993 to the Office of the
Mayor, Davao City, again requesting that he be allowed to continue
rendering service to the Davao City Government as Utility Worker in order to
complete the fifteen (15) years service requirement under P.D. No. 1146.
This request was once more denied by Mayor Duterte in a letter to petitioner
dated 19 May 1993. In this letter, Mayor Duterte pointed out that,
under Cena grant of the extension of service was discretionary on the part of
the City Mayor, but that he could not grant the extension requested. Mayor
Duterte's letter, in relevant part, read:

The matter was referred to the City Legal Office and the
Chairman of the Civil Service Commission, in the advent of
the decision of the Supreme Court in the Cena vs. CSC, et
al. (G.R. No. 97419 dated July 3, 1992), for legal opinion.
Both the City Legal Officer and the Chairman of the Civil
Service Commission are one in these opinion that extending
you an appointment in order that you may be able to
complete the fifteen-year service requirement is discretionary
[on the part of] the City Mayor.
Much as we desire to extend you an appointment but
circumstances are that we can no longer do so. As you are
already nearing your 70th birthday may no longer be able to
perform the duties attached to your position. Moreover, the
position you had vacated was already filled up.
We therefore regret to inform you that we cannot act
favorably on your request.8 (Emphases supplied)
At this point, Mr. Rabor decided to come to this Court. He filed a
Letter/Petition dated 6 July 1993 appealing from Civil Service Resolution No.
92-594 and from Mayor Duterte's letter of 10 May 1993.
The Court required petitioner Rabor to comply with the formal requirements
for instituting a special civil action of certiorari to review the assailed
Resolution of the Civil Service Commission. In turn, the Commission was
required to comment on petitioner's Letter/Petition.9 The Court subsequently
noted petitioner's Letter of 13 September 1993 relating to compliance with
the mentioned formal requirements and directed the Clerk of Court to advise
petitioner to engage the services of counsel or to ask for legal assistance
from the Public Attorney's Office (PAO). 10
The Civil Service Commission, through the Office of the Solicitor General,
filed its comment on 16 November 1993. The Court then resolved to give due
course to the Petition and required the parties to file memoranda. Both the
Commission and Mr. Rabor (the latter through PAO counsel) did so.
In this proceeding, petitioner Rabor contends that his claim falls squarely
within the ruling of this Court in Cena v. Civil Service Commission. 11
Upon the other hand, the Commission seeks to distinguish this case
from Cena. The Commission, through the Solicitor General, stressed that
in Cena, this Court had ruled that the employer agency, the Land
Administrative Law No. 2 Page |9
Registration Authority of the Department of Justice, was vested with
discretion to grant to Cena the extension requested by him. The Land
Registration Authority had chosen not to exercise its discretion to grant or
deny such extension. In contrast, in the instant case, the Davao City
Government did exercise its discretion on the matter and decided to deny the
extension sought by petitioner Rabor for legitimate reasons.
While the Cena decision is barely three (3) years old, the Court considers
that it must reexamine the doctrine of Cena and the theoretical and policy
underpinnings thereof. 12
We start by recalling the factual setting of Cena.
Gaudencio Cena was appointed Registrar of the Register of Deeds of
Malabon, Metropolitan Manila, on 16 July 1987. He reached the compulsory
retirement age of sixty-five (65) years on 22 January 1991. By the latter date,
his government service would have reached a total of eleven (11) years, nine
(9) months and six (6) days. Before reaching his 65th birthday, Cena
requested the Secretary of Justice, through the Administrator of the Land
Registration Authority ("LRA") that he be allowed to extend his service to
complete the fifteen-year service requirement to enable him to retire with the
full benefit of an Old-Age Pension under Section 11 (b) of P.D. No. 1146. If
Cena's request were granted, he would complete fifteen (15) years of
government service on 15 April 1994, at the age of sixty-eight (68) years.
The LRA Administrator sought a ruling from the Civil Service Commission on
whether or not Cena's request could be granted considering that Cena was
covered by Civil Service Memorandum No. 27, Series of 1990. On 17
October 1990, the Commission allowed Cena a one (1) year extension of his
service from 22 January 1991 to 22 January 1992 under its Memorandum
Circular No. 27. Dissatisfied, Cena moved for reconsideration, without
success. He then came to this Court, claiming that he was entitled to an
extension of three (3) years, three (3) months and twenty-four (24) days to
complete the fifteen-year service requirement for retirement with full benefits
under Section 11 (b) of P.D. No. 1146.
This Court granted Cena' s petition in its Decision of 3 July 1992. Speaking
through Mr. Justice Medialdea, the Court held that a government employee
who has reached the compulsory retirement age of sixty-five (65) years, but
at the same time has not yet completed fifteen (15) years of government
service required under Section 11 (b) of P.D. No. 1146 to qualify for the Old-
Age Pension Benefit, may be granted an extension of his government service
for such period of time as may be necessary to "fill up" or comply with the

fifteen (15)-year service requirement. The Court also held that the authority
to grant the extension was a discretionary one vested in the head of the
agency concerned. Thus the Court concluded:
Accordingly, the Petition is GRANTED. The Land
Registration Authority (LRA) and Department of Justice has
the discretion to allow petitioner Gaudencio Cena to extend
his 11 years, 9 months and 6 days of government to
complete the fifteen-year service so that he may retire with
full benefits under Section 11, paragraph (b) of P.D.
1146.13 (Emphases supplied)
The Court reached the above conclusion primarily on the basis of the "plain
and ordinary meaning" of Section 11 (b) of P.D. No. 1146. Section 11 may be
quoted in its entirety:
Sec. 11 Conditions for Old-Age Pension. — (a) Old-Age
Pension shall be paid to a member who
(1) has at least fifteen (15) years of service;
(2) is at least sixty (60) years of age; and
(3) is separated from the service.
(b) unless the service is extended by appropriate authorities,
retirement shall be compulsory for an employee at sixty-five-
(65) years of age with at least fifteen (15) years of service;
Provided, that if he has less than fifteen (15) years of
service, he shall he allowed to continue in the service to
completed the fifteen (15) years. (Emphases supplied)
The Court went on to rely upon the canon of liberal construction which has
often been invoked in respect of retirement statutes:
Being remedial in character, a statute granting a pension or
establishing [a] retirement plan should be liberally construed
and administered in favor of persons intended to be
benefitted thereby. The liberal approach aims to achieve the
humanitarian purposes of the law in order that efficiency,
security and well-being of government employees may be
enhanced.14 (Citations omitted)
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 10
While Section 11 (b) appeared cast in verbally unqualified terms, there were
(and still are) two (2) administrative issuances which prescribe limitations on
the extension of service that may be granted to an employee who has
reached sixty-five (65) years of age.
The first administrative issuance is Civil Service Commission Circular No. 27,
Series of 1990, which should be quoted in its entirety:
TO : ALL HEADS OF DEPARTMENTS, BUREAUS AND
AGENCIES OF THE NATIONAL/LOCAL GOVERNMENTS
INCLUDING GOVERNMENT- OWNED AND/OR
CONTROLLED CORPORATIONS WITH ORIGINAL
CHARTERS.
SUBJECT : Extension of Service of Compulsory Retiree to
Complete the Fifteen Years Service Requirement for
Retirement Purposes.
Pursuant to CSC Resolution No. 90-454 dated May 21,
1990, the Civil Service Commission hereby adopts and
promulgates the following policies and guidelines in the
extension of services of compulsory retirees to complete the
fifteen years service requirement for retirement purposes:
1. Any request for the extension of service of
compulsory retirees to complete the fifteen
(15) years service requirement for retirement
shall be allowed only to permanent
appointees in the career service who are
regular members of the Government Service
Insurance System (GSIS), and shall be
granted for a period not exceeding one (1)
year.
2. Any request for the extension of service of
compulsory retiree to complete the fifteen
(15) years service requirement for retirement
who entered the government service at 57
years of age or over upon prior grant of
authority to appoint him or her, shall no
longer be granted.

3. Any request for the extension of service to
complete the fifteen (15) years service
requirement of retirement shall be filled not
later than three (3) years prior to the date of
compulsory retirement.
4. Any request for the extension of service of
a compulsory retiree who meets the
minimum number of years of service for
retirement purposes may be granted for six
(6) months only with no further extension.
This Memorandum Circular shall take effect immediately.
(Emphases supplied)
The second administrative issuance — Memorandum Circular No. 65 of the
Office of the President, dated 14 June 1988 — provides:
xxx xxx xxx
WHEREAS, this Office has been. receiving requests for
reinstatement and/or retention in the service of employees
who have reached the compulsory retirement age of 65
years, despite the strict conditions provided for in
Memorandum Circular No. 163, dated March 5, 1968, as
amended.
WHEREAS, the President has recently adopted a policy to
adhere more strictly to the law providing for compulsory
retirement age of 65 years and, in extremely meritorious
cases, to limit the service beyond the age of 65 years to six
(6) months only.
WHEREFORE, the pertinent provision of Memorandum
Circular No. 163 or on the retention in the service of officials
or employees who have reached the compulsory retirement
age of 65 years, is hereby amended to read as follows:
Officials or employees who have reached
the compulsory retirement age of 65
years shall not be retained in the
service, except for extremely meritorious
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 11
reasons in which case the retention shall not
exceed six (6) months.
All heads of departments, bureaus, offices and
instrumentalities of the government including government-
owned or controlled corporations, are hereby enjoined to
require their respective offices to strictly comply with this
circular.
This Circular shall take effect immediately.
Manila, June 14, 1988.15 (Emphasis supplied)
Medialdea, J. resolved the challenges posed by the above two (2)
administrative regulations by, firstly, considering as invalid Civil Service
Memorandum No. 27 and, secondly, by interpreting the Office of the
President's Memorandum Circular No. 65 as inapplicable to the case of
Gaudencio T. Cena.
We turn first to the Civil Service Commission's Memorandum Circular No. 27.
Medialdea, J. wrote:
The Civil Service Commission Memorandum Circular No. 27
being in the nature of an administrative regulation, must be
governed by the principle that 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 (People v. Maceren, G.R. No. L-32166,
October 18, 1977, 79 SCRA 450; Teoxon v. Members of the
Board of Administrators, L-25619, June 30, 1970, 33 SCRA
585; Manuel v. General Auditing Office, L-28952, December
29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August
29, 1969, 29 SCRA 350). . . . . The rule on limiting to one the
year the extension of service of an employee who has
reached the compulsory retirement age of sixty-five (65)
years, but has less than fifteen (15) years of service under
Civil Service Memorandum Circular No. 27, S. 1990,
cannot likewise be accorded validity because it has no
relationship or connection with any provision of P.D. 1146
supposed to be carried into effect. The rule was an addition
to or extension of the law, not merely a mode of carrying it
into effect. The Civil Service Commission has no power to

supply perceived omissions in P.D. 1146. 16 (Emphasis
supplied)
It will be seen that Cena, in striking down Civil Service Commission
Memorandum No. 27, took a very narrow view on the question of what
subordinate rule-making by an administrative agency is permissible and
valid. That restrictive view must be contrasted with this Court's earlier ruling
in People v. Exconde, 17 where Mr. Justice J.B.L. Reyes said:
It is well established in this jurisdiction that, while the making
of laws is a non-delegable activity that corresponds
exclusively to Congress, nevertheless, the latter may
constitutionally delegate authority and promulgate rules and
regulations to implement a given legislation and effectuate its
policies, for the reason that the legislature often finds it
impracticable (if not impossible) to anticipate and provide for
the multifarious and complex situations that may be met in
carrying the law into effect. All that is required is that the
regulation should be germane to the objects and purposes of
the law; that the regulation be not in contradiction with it, but
conform to standards that the law prescribes.18 (Emphasis
supplied)
In Tablarin v. Gutierrez, 19 the Court, in sustaining the validity of a MECS
Order which established passing a uniform admission test called the National
Medical Admission Test (NMAT) as a prerequisite for eligibility for admission
into medical schools in the Philippines, said:
The standards set for subordinate legislation in the exercise
of rule making authority by an administrative agency like the
Board of Medical Education are necessarily broad and highly
abstract. As explained by then Mr. Justice Fernando in Edu
v. Ericta (35 SCRA 481 [1970]) —
The standards may be either
expressed or implied. If the former, the non-
delegation objection is easily met. The
Standard though does not have to be
spelled out specifically. It could be implied
from the policy and purpose of the act
considered as a whole. In the Reflector Law,
clearly the legislative objective is public
safety. What is sought to be attained
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 12
in Calalang v. William is "safe transit upon
the roads."
We believe and so hold that the necessary standards are set
forth in Section 1 of the 1959 Medical Act: "the
standardization and regulation of medical education" and in
Section 5 (a) and 7 of the same Act, the body of the statute
itself, and that these considered together are sufficient
compliance with the requirements of the non-delegation
principle.20 (Citations omitted; emphasis partly in the original
and partly supplied)
In Edu v. Ericta, 21 then Mr. Justice Fernando stressed the abstract and very
general nature of the standards which our Court has in prior case law upheld
as sufficient for purposes of compliance with the requirements for validity of
subordinate or administrative rule-making:
This Court has considered as sufficient standards, "public
welfare," (Municipality of Cardona v. Municipality of
Binangonan, 36 Phil. 547 [1917]); "necessary in the interest
of law and order," (Rubi v. Provincial Board, 39 Phil. 660
[1919]); "public interest," (People v. Rosenthal, 68 Phil. 328
[1939]); and "justice and equity and substantial merits of the
case," (International Hardwood v. Pangil Federation of
Labor, 17 Phil. 602 [1940]). 22 (Emphasis supplied)
Clearly, therefore, Cena when it required a considerably higher degree of
detail in the statute to be implemented, went against prevailing doctrine. It
seems clear that if the governing or enabling statute is quite detailed and
specific to begin with, there would be very little need (or occasion) for
implementing administrative regulations. It is, however, precisely the inability
of legislative bodies to anticipate all (or many) possible detailed situations in
respect of any relatively complex subject matter, that makes subordinate,
delegated rule-making by administrative agencies so important and
unavoidable. All that may be reasonably; demanded is a showing that the
delegated legislation consisting of administrative regulations are germane to
the general purposes projected by the governing or enabling statute. This is
the test that is appropriately applied in respect of Civil Service Memorandum
Circular No. 27, Series of 1990, and to this test we now turn.
We consider that the enabling statute that should appropriately be examined
is the present Civil Service law — found in Book V, Title I, Subtitle A, of
Executive Order No. 292 dated 25 July 1987, otherwise known as the

Administrative Code of 1987 — and not alone P.D. No. 1146, otherwise
known as the "Revised Government Service Insurance Act of 1977." For the
matter of extension of service of retirees who have reached sixty-five (65)
years of age is an area that is covered by both statutes and not alone by
Section 11 (b) of P.D. 1146. This is crystal clear from examination of many
provisions of the present civil service law.
Section 12 of the present Civil Service law set out in the 1987 Administrative
Code provides, in relevant part, as follows:
Sec. 12 Powers and Functions. — The [Civil Service]
Commission shall have the following powers and functions:
xxx xxx xxx
(2) Prescribe, amend and enforce rules and regulations
for carrying into effect the provisions of the Civil Service
Law and other pertinent laws;
(3) Promulgate policies, standards and guidelines for the
Civil Service and adopt plans and programs to
promote economical, efficient and effective personnel
administration in the government;
xxx xxx xxx
(10) Formulate, administer and evaluate programs relative to
the development and retention of a qualified and competent
work force in the public service;
xxx xxx xxx
(14) Take appropriate action on all appointments and other
personnel matters in the Civil Service including extension of
service beyond retirement age;
xxx xxx xxx
(17) Administer the retirement program for government
officials and employees, and accredit government services
and evaluate qualifications for retirement;
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 13
xxx xxx xxx
(19) Perform all functions properly belonging to a central
personnel agency and such other functions as may be
provided by law. (Emphasis supplied)
It was on the bases of the above quoted provisions of the 1987
Administrative Code that the Civil Service Commission promulgated its
Memorandum Circular No. 27. In doing so, the Commission was acting as
"the central personnel agency of the government empowered to promulgate
policies, standards and guidelines for efficient, responsive and effective
personnel administration in the government." 23 It was also discharging its
function of "administering the retirement program for government officials and
employees" and of "evaluat[ing] qualifications for retirement."
In addition, the Civil Service Commission is charged by the 1987
Administrative Code with providing leadership and assistance "in
the development and retention of qualified and efficient work force in the Civil
Service" (Section 16 [10]) and with the "enforcement of the constitutional
and statutory provisions, relative to retirement and the regulation for
the effective implementation of the retirement of government officials and
employees" (Section 16 [14]).
We find it very difficult to suppose that the limitation of permissible
extensions of service after an employee has reached sixty-five (65) years of
age has no reasonable relationship or is not germane to the foregoing
provisions of the present Civil Service Law. The physiological and
psychological processes associated with ageing in human beings are in fact
related to the efficiency and quality of the service that may be expected from
individual persons. The policy considerations which guided the Civil Service
Commission in limiting the maximum extension of service allowable for
compulsory retirees, were summarized by Griño-Aquino, J. in her dissenting
opinion in Cena:
Worth pondering also are the points raised by the Civil
Service Commission that extending the service of
compulsory retirees for longer than one (1) year would: (1)
give a premium to late-comers in the government service
and in effect discriminate against those who enter the
service at a younger age; (2) delay the promotion of the
latter and of next-in-rank employees; and (3) prejudice the
chances for employment of qualified young civil service
applicants who have already passed the various government

examination but must wait for jobs to be vacated by
"extendees" who have long passed the mandatory retirement
age but are enjoying extension of their government service
to complete 15 years so they may qualify for old-age
pension. 24 (Emphasis supplied).
Cena laid heavy stress on the interest of retirees or would be retirees,
something that is, in itself, quite appropriate. At the same time, however, we
are bound to note that there should be countervailing stress on the interests
of the employer agency and of other government employees as a whole. The
results flowing from the striking down of the limitation established in Civil
Service Memorandum Circular No. 27 may well be "absurd and inequitable,"
as suggested by Mme. Justice Griño-Aquino in her dissenting opinion. An
employee who has rendered only three (3) years of government service at
age sixty-five (65) can have his service extended for twelve (12) years and
finally retire at the age of seventy-seven (77). This reduces the significance
of the general principle of compulsory retirement at age sixty-five (65) very
close to the vanishing point.
The very real difficulties posed by the Cena doctrine for rational personnel
administration and management in the Civil Service, are aggravated
when Cena is considered together with the case of Toledo v. Civil Service
Commission. 25 Toledo involved the provisions of Rule III, Section 22, of the
Civil Service Rules on Personnel Action and Policies (CSRPAP) which
prohibited the appointment of persons fifty-seven (57) years old or above in
government service without prior approval of the Civil Service Commission.
Civil Service Memorandum Circular No. 5, Series of 1983 provided that a
person fifty-seven (57) years of age may be appointed to the Civil Service
provided that the exigencies of the government service so required and
provided that the appointee possesses special qualifications not possessed
by other officers or employees in the Civil Service and that the vacancy
cannot be filled by promotion of qualified officers or employees of the Civil
Service. Petitioner Toledo was appointed Manager of the Education and
Information Division of the Commission on Elections when he was almost
fifty-nine (59) years old. No authority for such appointment had been
obtained either from the President of the Philippines or from the Civil Service
Commission and the Commission found that the other conditions laid down in
Section 22 of Rule III, CSRPAP, did not exist. The Court nevertheless struck
down Section 22, Rule III on the same exceedingly restrictive view of
permissible administrative legislation that Cena relied on.26
When one combines the doctrine of Toledo with the ruling in Cena, very
strange results follow. Under these combined doctrines, a person sixty-four
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 14
(64) years of age may be appointed to the government service and one (1)
year later may demand extension of his service for the next fourteen (14)
years; he would retire at age seventy-nine (79). The net effect is thus that the
general statutory policy of compulsory retirement at sixty-five (65) years is
heavily eroded and effectively becomes unenforceable. That general
statutory policy may be seen to embody the notion that there should be a
certain minimum turn-over in the government service and that opportunities
for government service should be distributed as broadly as possible,
specially to younger people, considering that the bulk of our population is
below thirty (30) years of age. That same general policy also reflects the life
expectancy of our people which is still significantly lower than the life
expectancy of, e.g., people in Northern and Western Europe, North America
and Japan.
Our conclusion is that the doctrine of Cena should be and is hereby modified
to this extent: that Civil Service Memorandum Circular No. 27, Series of
1990, more specifically paragraph (1) thereof, is hereby declared valid and
effective. Section 11 (b) of P.D. No. 1146 must, accordingly, be read together
with Memorandum Circular No. 27. We reiterate, however, the holding
in Cena that the head of the government agency concerned is vested with
discretionary authority to allow or disallow extension of the service of an
official or employee who has reached sixty-five (65) years of age without
completing fifteen (15) years of government service; this discretion is,
nevertheless, to be exercised conformably with the provisions of Civil Service
Memorandum Circular No. 27, Series of 1990.
We do not believe it necessary to deal specifically with Memorandum
Circular No. 65 of the Office of the President dated 14 June 1988. It will be
noted from the text quoted supra (pp. 11-12) that the text itself of
Memorandum Circular No. 65 (and for that matter, that of Memorandum
Circular No. 163, also of the Office of the President, dated 5 March
1968) 27 does not purport to apply only to officers or employees who have
reached the age of sixty-five (65) years and who have at least fifteen (l5)
years of government service. We noted earlier that Cena interpreted
Memorandum Circular No. 65 as referring only to officers and employees
who have both reached the compulsory retirement age of sixty-five (65) and
completed the fifteen (15) years of government service. Cena so interpreted
this Memorandum Circular precisely because Cena had reached the
conclusion that employees who have reached sixty-five (65) years of age, but
who have less than fifteen (15) years of government service, may be allowed
such extension of service as may be needed to complete fifteen (15) years of
service. In other words, Cena read Memorandum Circular No. 65 in such a
way as to comfort with Cena's own conclusion reached without regard to that
 A d m i n i s t r a t i v e L a w N o . 2 P a g e | 15

Memorandum Circular. In view of the conclusion that we today reached in the

instant case, this last ruling of Cena is properly regarded as merely orbiter.

We also do not believe it necessary to determine whether Civil Service

Memorandum Circular No. 27 is fully compatible with Office of the President's
Memorandum Circular No. 65; this question must be reserved for detailed
analysis in some future justiciable case.

Applying now the results of our reexamination of Cena to the instant case,
we believe and so hold that Civil Service Resolution No. 92-594 dated 28
April 1992 dismissing the appeal of petitioner Rabor and affirming the action
of CSRO-XI Director Cawad dated 26 July 1991, must be upheld and
affirmed.

ACCORDINGLY, for all the foregoing, the Petition for Certiorari is hereby
DISMISSED for lack of merit. No pronouncement as to costs.

SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza and Francisco, JJ., concur.

Quiason, J., is on leave.


G.R. No. 119528. March 26, 1997.*
PHILIPPINE AIRLINES, INC., petitioner, vs. CIVIL AERONAUTICS
BOARD and GRAND INTERNATIONAL AIRWAYS, INC., respondents.
Public Utilities; Transportation; Air Transportation; Franchises; Civil
Aeronautics Board; The Civil Aeronautics Board is expressly authorized by
Republic Act No. 776 to issue a temporary operating permit or Certificate of
Public Convenience and Necessity, and nothing contained in the said law
negates the power to issue said permit before the completion of the
applicant’s evidence and that of the oppositor thereto on the main petition.—
The Civil Aeronautics Board has jurisdiction over GrandAir’s Application for a
Temporary Operating Permit. This rule has been established in the case of
Philippine Air Lines Inc., vs. Civil Aeronautics Board, promulgated on June
13, 1968. The Board is expressly authorized by Republic Act No. 776 to
issue a temporary operating permit or Certificate of Public Convenience and
Necessity, and nothing contained in the said law negates the power to issue
said permit before the completion of the applicant’s evidence and that of the
oppositor thereto on the main petition. Indeed, the CAB’s authority to grant a
temporary permit “upon its own initiative” strongly suggests the power to
exercise said authority, even before the presentation of said evidence has
begun. Assuming arguendo that a legislative franchise is prerequisite to the
issuance of a permit, the absence of the same does not affect the jurisdiction
of the Board to hear the application, but tolls only upon the ultimate issuance
of the requested permit.
Same; Same; Same; Same; Words and Phrases; “Franchise,” Explained;
The power to authorize and control the operation of a public utility is
admittedly a prerogative of the legislature, since Congress is that branch of
government vested with plenary powers of legislation.—The power to
authorize and control the operation of a public utility is admittedly a
prerogative of the legislature, since Congress is that branch of government
vested with plenary powers of legislation. “The franchise is a legislative grant,
whether made directly by the legislature itself, or by any one of its properly
constituted instrumentalities. The grant, when made, binds the public, and is,
directly or indirectly, the act of the state.”
Same; Same; Same; Same; Delegation of Powers; Administrative Law; It is
generally recognized that a franchise may be derived indirectly from the state
through a duly designated agency, and to this extent, the power to grant
franchises has frequently been delegated, even to agencies other than those
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 16
of a legislative nature.—Congress has granted certain administrative
agencies the power to grant licenses for, or to authorize the operation of,
certain public utilities. With the growing complexity of modern life, the
multiplication of the subjects of governmental regulation, and the increased
difficulty of administering the laws, there is a constantly growing tendency
towards the delegation of greater powers by the legislature, and towards the
approval of the practice by the courts. It is generally recognized that a
franchise may be derived indirectly from the state through a duly designated
agency, and to this extent, the power to grant franchises has frequently been
delegated, even to agencies other than those of a legislative nature. In
pursuance of this, it has been held that privileges conferred by grant by local
authorities as agents for the state constitute as much a legislative franchise
as though the grant had been made by an act of the Legislature.
Same; Same; Same; Same; Same; The trend of modern legislation is to vest
the Public Service Commissioner with the power to regulate and control the
operation of public services under reasonable rules and regulations.—The
trend of modern legislation is to vest the Public Service Commissioner with
the power to regulate and control the operation of public services under
reasonable rules and regulations, and as a general rule, courts will not
interfere with the exercise of that discretion when it is just and reasonable
and founded upon a legal right.
Same; Same; Same; Same; Same; The Civil Aeronautics Board has the
authority to issue a Certificate of Public Convenience and Necessity, or
Temporary Operating Permit to a domestic air transport operator, who,
though not possessing a legislative franchise, meets all the other
requirements prescribed by law.—Given the foregoing postulates, we find
that the Civil Aeronautics Board has the authority to issue a Certificate of
Public Convenience and Necessity, or Temporary Operating Permit to a
domestic air transport operator, who, though not possessing a legislative
franchise, meets all the other requirements prescribed by the law. Such
requirements were enumerated in Section 21 of R.A. No. 776.
Same; Same; Same; Same; Same; There is nothing in the law nor in the
Constitution, which indicates that a legislative franchise is an indispensable
requirement for an entity to operate as a domestic air transport operator.—
There is nothing in the law nor in the Constitution, which indicates that a
legislative franchise is an indispensable requirement for an entity to operate
as a domestic air transport operator. Although Section 11 of Article XII
recognizes Congress’ control over any franchise, certificate or authority to
operate a public utility, it does not mean Congress has exclusive authority to

issue the same. Franchises issued by Congress are not required before each
and every public utility may operate. In many instances, Congress has seen
it fit to delegate this function to government agencies, specialized particularly
in their respective areas of public service.
Same; Same; Same; Same; Same; Words and Phrases; “Convenience and
Necessity,” Explained; The terms “convenience and necessity,” if used
together in a statute, are usually held not to be separable, but are construed
together—both words modify each other.—Many and varied are the
definitions of certificates of public convenience which courts and legal writers
have drafted. Some statutes use the terms “convenience and necessity”
while others use only the words “public convenience.” The terms
“convenience and necessity,” if used together in a statute, are usually held
not to be separable, but are construed together. Both words modify each
other and must be construed together. The word ‘necessity’ is so connected,
not as an additional requirement but to modify and qualify what might
otherwise be taken as the strict significance of the word necessity. Public
convenience and necessity exists when the proposed facility will meet a
reasonable want of the public and supply a need which the existing facilities
do not adequately afford. It does not mean or require an actual physical
necessity or an indispensable thing. “The terms ‘convenience’ and ‘necessity’
are to be construed together, although they are not synonymous, and effect
must be given both. The convenience of the public must not be
circumscribed by according to the word ‘necessity’ its strict meaning or an
essential requisites.”
Same; Same; Same; Same; Same; Congress, by giving the CAB the power
to issue permits for the operation of domestic transport services, has
delegated to the said body the authority to determine the capability and
competence of a prospective domestic air transport operator to engage in
such venture.—Congress, by giving the respondent Board the power to issue
permits for the operation of domestic transport services, has delegated to the
said body the authority to determine the capability and competence of a
prospective domestic air transport operator to engage in such venture. This
is not an instance of transforming the respondent Board into a minilegislative
body, with unbridled authority to choose who should be given authority to
operate domestic air transport services.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Estelito P. Mendoza and Alberto E. Valenzuela, Jr. for petitioner.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 17
Belo, Gozon, Elma, Parel, Asuncion & Lucila for private respondent.
TORRES, JR., J.:
This Special Civil Action for Certiorari and Prohibition under Rule 65 of the
Rules of Court seeks to prohibit respondent Civil Aeronautics Board from
exercising jurisdiction over private respondent's Application for the issuance
of a Certificate of Public Convenience and Necessity, and to annul and set
aside a temporary operating permit issued by the Civil Aeronautics Board in
favor of Grand International Airways (GrandAir, for brevity) allowing the same
to engage in scheduled domestic air transportation services, particularly the
Manila-Cebu, Manila-Davao, and converse routes.
The main reason submitted by petitioner Philippine Airlines, Inc. (PAL) to
support its petition is the fact that GrandAir does not possess a legislative
franchise authorizing it to engage in air transportation service within the
Philippines or elsewhere. Such franchise is, allegedly, a requisite for the
issuance of a Certificate of Public Convenience or Necessity by the
respondent Board, as mandated under Section 11, Article XII of the
Constitution.
Respondent GrandAir, on the other hand, posits that a legislative franchise is
no longer a requirement for the issuance of a Certificate of Public
Convenience and Necessity or a Temporary Operating Permit, following the
Court's pronouncements in the case of Albano vs. Reyes,1 as restated by
the Court of Appeals in Avia Filipinas International vs. Civil Aeronautics
Board2 and Silangan Airways, Inc. vs. Grand International Airways, Inc., and
the Hon. Civil Aeronautics Board.3
On November 24, 1994, private respondent GrandAir applied for a Certificate
of Public Convenience and Necessity with the Board, which application was
docketed as CAB Case No. EP-12711.4 Accordingly, the Chief Hearing
Officer of the CAB issued a Notice of Hearing setting the application for initial
hearing on December 16, 1994, and directing GrandAir to serve a copy of the
application and corresponding notice to all scheduled Philippine Domestic
operators. On December 14, 1994, GrandAir filed its Compliance, and
requested for the issuance of a Temporary Operating Permit. Petitioner, itself
the holder of a legislative franchise to operate air transport services, filed an
Opposition to the application for a Certificate of Public Convenience and
Necessity on December 16, 1995 on the following grounds:

A. The CAB has no jurisdiction to hear the petitioner's
application until the latter has first obtained a franchise to
operate from Congress.
B. The petitioner's application is deficient in form and
substance in that:
1. The application does not indicate a route
structure including a computation of
trunkline, secondary and rural available seat
kilometers (ASK) which shall always be
maintained at a monthly level at least 5%
and 20% of the ASK offered into and out of
the proposed base of operations for rural
and secondary, respectively.
2. It does not contain a project/feasibility
study, projected profit and loss statements,
projected balance sheet, insurance
coverage, list of personnel, list of spare
parts inventory, tariff structure, documents
supportive of financial capacity, route flight
schedule, contracts on facilities (hangars,
maintenance, lot) etc.
C. Approval of petitioner's application would violate the equal
protection clause of the constitution.
D. There is no urgent need and demand for the services
applied for.
E. To grant petitioner's application would only result in
ruinous competition contrary to Section 4(d) of R.A. 776. 5
At the initial hearing for the application, petitioner raised the issue of lack of
jurisdiction of the Board to hear the application because GrandAir did not
possess a legislative franchise.
On December 20, 1994, the Chief Hearing Officer of CAB issued an Order
denying petitioner's Opposition. Pertinent portions of the Order read:
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 18
PAL alleges that the CAB has no jurisdiction to hear the
petitioner's application until the latter has first obtained a
franchise to operate from Congress.
The Civil Aeronautics Board has jurisdiction to hear and
resolve the application. In Avia Filipina vs. CAB, CA G.R. No.
23365, it has been ruled that under Section 10 (c) (I) of R.A.
776, the Board possesses this specific power and duty.
In view thereof, the opposition of PAL on this ground is
hereby denied.
SO ORDERED.
Meantime, on December 22, 1994, petitioner this time, opposed private
respondent's application for a temporary permit maintaining that:
1. The applicant does not possess the required fitness and
capability of operating the services applied for under RA 776;
and,
2. Applicant has failed to prove that there is clear and urgent
public need for the services applied for.6
On December 23, 1994, the Board promulgated Resolution No. 119(92)
approving the issuance of a Temporary Operating Permit in favor of Grand
Air 7 for a period of three months, i.e., from December 22, 1994 to March 22,
1994. Petitioner moved for the reconsideration of the issuance of the
Temporary Operating Permit on January 11, 1995, but the same was denied
in CAB Resolution No. 02 (95) on February 2, 1995. 8 In the said Resolution,
the Board justified its assumption of jurisdiction over GrandAir's application.
WHEREAS , the CAB is specifically authorized under
Section 10-C (1) of Republic Act No. 776 as follows:
(c) The Board shall have the following specific powers and
duties:
(1) In accordance with the provision of Chapter IV of this Act,
to issue, deny, amend revise, alter, modify, cancel, suspend
or revoke, in whole or in part, upon petitioner-complaint, or
upon its own initiative, any temporary operating permit or

Certificate of Public Convenience and Necessity; Provided,
however; that in the case of foreign air carriers, the permit
shall be issued with the approval of the President of the
Republic of the Philippines.
WHEREAS, such authority was affirmed in PAL vs. CAB, (23
SCRA 992), wherein the Supreme Court held that the CAB
can even on its own initiative, grant a TOP even before the
presentation of evidence;
WHEREAS, more recently, Avia Filipinas vs. CAB, (CA-GR
No. 23365), promulgated on October 30, 1991, held that in
accordance with its mandate, the CAB can issue not only a
TOP but also a Certificate of Public Convenience and
Necessity (CPCN) to a qualified applicant therefor in the
absence of a legislative franchise, citing therein as basis the
decision of Albano vs. Reyes (175 SCRA 264) which
provides (inter alia) that:
a) Franchises by Congress are not required before each and
every public utility may operate when the law has granted
certain administrative agencies the power to grant licenses
for or to authorize the operation of certain public utilities;
b) The Constitutional provision in Article XII, Section 11 that
the issuance of a franchise, certificate or other form of
authorization for the operation of a public utility does not
necessarily imply that only Congress has the power to grant
such authorization since our statute books are replete with
laws granting specified agencies in the Executive Branch the
power to issue such authorization for certain classes of
public utilities.
WHEREAS, Executive Order No. 219 which took effect on
22 January 1995, provides in Section 2.1 that a minimum of
two (2) operators in each route/link shall be encouraged and
that routes/links presently serviced by only one (1) operator
shall be open for entry to additional operators.
RESOLVED, (T)HEREFORE, that the Motion for
Reconsideration filed by Philippine Airlines on January 05,
1995 on the Grant by this Board of a Temporary Operating
Permit (TOP) to Grand International Airways, Inc. alleging
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 19
among others that the CAB has no such jurisdiction, is
hereby DENIED, as it hereby denied, in view of the foregoing
and considering that the grounds relied upon by the movant
are not indubitable.
On March 21, 1995, upon motion by private respondent, the temporary
permit was extended for a period of six (6) months or up to September 22,
1995.
Hence this petition, filed on April 3, 1995.
Petitioners argue that the respondent Board acted beyond its powers and
jurisdiction in taking cognizance of GrandAir's application for the issuance of
a Certificate of Public Convenience and Necessity, and in issuing a
temporary operating permit in the meantime, since GrandAir has not been
granted and does not possess a legislative franchise to engage in scheduled
domestic air transportation. A legislative franchise is necessary before
anyone may engage in air transport services, and a franchise may only be
granted by Congress. This is the meaning given by the petitioner upon a
reading of Section 11, Article XII,9 and Section 1, Article VI, 10 of the
Constitution.
To support its theory, PAL submits Opinion No. 163, S. 1989 of the
Department of Justice, which reads:
Dr. Arturo C. Corona
Executive Director
Civil Aeronautics Board
PPL Building, 1000 U.N. Avenue
Ermita, Manila
Sir:
This has reference to your request for opinion on the
necessity of a legislative franchise before the Civil
Aeronautics Board ("CAB") may issue a Certificate of Public
Convenience and Necessity and/or permit to engage in air
commerce or air transportation to an individual or entity.
You state that during the hearing on the application of Cebu
Air for a congressional franchise, the House Committee on
Corporations and Franchises contended that under the

present Constitution, the CAB may not issue the abovestated
certificate or permit, unless the individual or entity concerned
possesses a legislative franchise. You believe otherwise,
however, for the reason that under R.A. No. 776, as
amended, the CAB is explicitly empowered to issue
operating permits or certificates of public convenience and
necessity and that this statutory provision is not inconsistent
with the current charter.
We concur with the view expressed by the House Committee
on Corporations and Franchises. In an opinion rendered in
favor of your predecessor-in-office, this Department
observed that, —
. . . it is useful to note the distinction between the franchise to
operate and a permit to commence operation. The former is
sovereign and legislative in nature; it can be conferred only
by the lawmaking authority (17 W and P, pp. 691-697). The
latter is administrative and regulatory in character (In re
Application of Fort Crook-Bellevue Boulevard Line, 283 NW
223); it is granted by an administrative agency, such as the
Public Service Commission [now Board of Transportation], in
the case of land transportation, and the Civil Aeronautics
Board, in case of air services. While a legislative franchise is
a pre-requisite to a grant of a certificate of public
convenience and necessity to an airline company, such
franchise alone cannot constitute the authority to commence
operations, inasmuch as there are still matters relevant to
such operations which are not determined in the franchise,
like rates, schedules and routes, and which matters are
resolved in the process of issuance of permit by the
administrative. (Secretary of Justice opn No. 45, s. 1981)
Indeed, authorities are agreed that a certificate of public
convenience and necessity is an authorization issued by the
appropriate governmental agency for the operation of public
services for which a franchise is required by law (Almario,
Transportation and Public Service Law, 1977 Ed., p. 293;
Agbayani, Commercial Law of the Phil., Vol. 4, 1979 Ed., pp.
380-381).
Based on the foregoing, it is clear that a franchise is the
legislative authorization to engage in a business activity or
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 20
enterprise of a public nature, whereas a certificate of public
convenience and necessity is a regulatory measure which
constitutes the franchise's authority to commence
operations. It is thus logical that the grant of the former
should precede the latter.
Please be guided accordingly.
Respondent GrandAir, on the other hand, relies on its interpretation of the
provisions of Republic Act 776, which follows the pronouncements of the
Court of Appeals in the cases of Avia Filipinas vs. Civil Aeronautics Board,
and Silangan Airways, Inc. vs. Grand International Airways (supra).
In both cases, the issue resolved was whether or not the Civil Aeronautics
Board can issue the Certificate of Public Convenience and Necessity or
Temporary Operating Permit to a prospective domestic air transport operator
who does not possess a legislative franchise to operate as such. Relying on
the Court's pronouncement in Albano vs. Reyes (supra), the Court of
Appeals upheld the authority of the Board to issue such authority, even in the
absence of a legislative franchise, which authority is derived from Section 10
of Republic Act 776, as amended by P.D. 1462. 11
The Civil Aeronautics Board has jurisdiction over GrandAir's Application for a
Temporary Operating Permit. This rule has been established in the case
of Philippine Air Lines Inc., vs. Civil Aeronautics Board, promulgated on June
13, 1968. 12 The Board is expressly authorized by Republic Act 776 to issue
a temporary operating permit or Certificate of Public Convenience and
Necessity, and nothing contained in the said law negates the power to issue
said permit before the completion of the applicant's evidence and that of the
oppositor thereto on the main petition. Indeed, the CAB's authority to grant a
temporary permit "upon its own initiative" strongly suggests the power to
exercise said authority, even before the presentation of said evidence has
begun. Assuming arguendo that a legislative franchise is prerequisite to the
issuance of a permit, the absence of the same does not affect the jurisdiction
of the Board to hear the application, but tolls only upon the ultimate issuance
of the requested permit.
The power to authorize and control the operation of a public utility is
admittedly a prerogative of the legislature, since Congress is that branch of
government vested with plenary powers of legislation.
The franchise is a legislative grant, whether made directly by
the legislature itself, or by any one of its properly constituted

instrumentalities. The grant, when made, binds the public,
and is, directly or indirectly, the act of the state. 13
The issue in this petition is whether or not Congress, in enacting Republic
Act 776, has delegated the authority to authorize the operation of domestic
air transport services to the respondent Board, such that Congressional
mandate for the approval of such authority is no longer necessary.
Congress has granted certain administrative agencies the power to grant
licenses for, or to authorize the operation of certain public utilities. With the
growing complexity of modern life, the multiplication of the subjects of
governmental regulation, and the increased difficulty of administering the
laws, there is a constantly growing tendency towards the delegation of
greater powers by the legislature, and towards the approval of the practice by
the courts. 14 It is generally recognized that a franchise may be derived
indirectly from the state through a duly designated agency, and to this extent,
the power to grant franchises has frequently been delegated, even to
agencies other than those of a legislative nature. 15 In pursuance of this, it
has been held that privileges conferred by grant by local authorities as
agents for the state constitute as much a legislative franchise as though the
grant had been made by an act of the Legislature. 16
The trend of modern legislation is to vest the Public Service Commissioner
with the power to regulate and control the operation of public services under
reasonable rules and regulations, and as a general rule, courts will not
interfere with the exercise of that discretion when it is just and reasonable
and founded upon a legal right. 17
It is this policy which was pursued by the Court in Albano vs. Reyes. Thus, a
reading of the pertinent issuances governing the Philippine Ports
Authority, 18 proves that the PPA is empowered to undertake by itself the
operation and management of the Manila International Container Terminal,
or to authorize its operation and management by another by contract or other
means, at its option. The latter power having been delegated to the to PPA, a
franchise from Congress to authorize an entity other than the PPA to operate
and manage the MICP becomes unnecessary.
Given the foregoing postulates, we find that the Civil Aeronautics Board has
the authority to issue a Certificate of Public Convenience and Necessity, or
Temporary Operating Permit to a domestic air transport operator, who,
though not possessing a legislative franchise, meets all the other
requirements prescribed by the law. Such requirements were enumerated in
Section 21 of R.A. 776.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 21
There is nothing in the law nor in the Constitution, which indicates that a
legislative franchise is an indispensable requirement for an entity to operate
as a domestic air transport operator. Although Section 11 of Article XII
recognizes Congress' control over any franchise, certificate or authority to
operate a public utility, it does not mean Congress has exclusive authority to
issue the same. Franchises issued by Congress are not required before each
and every public utility may operate. 19 In many instances, Congress has
seen it fit to delegate this function to government agencies, specialized
particularly in their respective areas of public service.
A reading of Section 10 of the same reveals the clear intent of Congress to
delegate the authority to regulate the issuance of a license to operate
domestic air transport services:
Sec. 10. Powers and Duties of the Board. (A) Except as
otherwise provided herein, the Board shall have the power to
regulate the economic aspect of air transportation, and shall
have general supervision and regulation of, the jurisdiction
and control over air carriers, general sales agents, cargo
sales agents, and air freight forwarders as well as their
property rights, equipment, facilities and franchise, insofar as
may be necessary for the purpose of carrying out the
provision of this Act.
In support of the Board's authority as stated above, it is given the following
specific powers and duties:
(C) The Board shall have the following specific powers and
duties:
(1) In accordance with the provisions of Chapter IV of this
Act, to issue, deny, amend, revise, alter, modify, cancel,
suspend or revoke in whole or in part upon petition or
complaint or upon its own initiative any Temporary Operating
Permit or Certificate of Public Convenience and Necessity:
Provided however, That in the case of foreign air carriers,
the permit shall be issued with the approval of the President
of the Republic of the Philippines.
Petitioner argues that since R.A. 776 gives the Board the authority to issue
"Certificates of Public Convenience and Necessity", this, according to
petitioner, means that a legislative franchise is an absolute requirement. It
cites a number of authorities supporting the view that a Certificate of Public

Convenience and Necessity is issued to a public service for which a
franchise is required by law, as distinguished from a "Certificate of Public
Convenience" which is an authorization issued for the operation of public
services for which no franchise, either municipal or legislative, is required by
law. 20
This submission relies on the premise that the authority to issue a certificate
of public convenience and necessity is a regulatory measure separate and
distinct from the authority to grant a franchise for the operation of the public
utility subject of this particular case, which is exclusively lodged by petitioner
in Congress.
We do not agree with the petitioner.
Many and varied are the definitions of certificates of public convenience
which courts and legal writers have drafted. Some statutes use the terms
"convenience and necessity" while others use only the words "public
convenience." The terms "convenience and necessity", if used together in a
statute, are usually held not to be separable, but are construed together.
Both words modify each other and must be construed together. The word
'necessity' is so connected, not as an additional requirement but to modify
and qualify what might otherwise be taken as the strict significance of the
word necessity. Public convenience and necessity exists when the proposed
facility will meet a reasonable want of the public and supply a need which the
existing facilities do not adequately afford. It does not mean or require an
actual physical necessity or an indispensable thing. 21
The terms "convenience" and "necessity" are to be
construed together, although they are not synonymous, and
effect must be given both. The convenience of the public
must not be circumscribed by according to the word
"necessity" its strict meaning or an essential requisites. 22
The use of the word "necessity", in conjunction with "public convenience" in a
certificate of authorization to a public service entity to operate, does not in
any way modify the nature of such certification, or the requirements for the
issuance of the same. It is the law which determines the requisites for the
issuance of such certification, and not the title indicating the certificate.
Congress, by giving the respondent Board the power to issue permits for the
operation of domestic transport services, has delegated to the said body the
authority to determine the capability and competence of a prospective
domestic air transport operator to engage in such venture. This is not an
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 22
instance of transforming the respondent Board into a mini-legislative body,
with unbridled authority to choose who should be given authority to operate
domestic air transport services.
To be valid, the delegation itself must be circumscribed by
legislative restrictions, not a "roving commission" that will
give the delegate unlimited legislative authority. It must not
be a delegation "running riot" and "not canalized with banks
that keep it from overflowing." Otherwise, the delegation is in
legal effect an abdication of legislative authority, a total
surrender by the legislature of its prerogatives in favor of the
delegate. 23
Congress, in this instance, has set specific limitations on how such authority
should be exercised.
Firstly, Section 4 of R.A. No. 776, as amended, sets out the following
guidelines or policies:
Sec. 4. Declaration of policies. In the exercise and
performance of its powers and duties under this Act, the Civil
Aeronautics Board and the Civil Aeronautics Administrator
shall consider the following, among other things, as being in
the public interest, and in accordance with the public
convenience and necessity:
(a) The development and utilization of the air potential of the
Philippines;
(b) The encouragement and development of an air
transportation system properly adapted to the present and
future of foreign and domestic commerce of the Philippines,
of the Postal Service and of the National Defense;
(c) The regulation of air transportation in such manner as to
recognize and preserve the inherent advantages of, assure
the highest degree of safety in, and foster sound economic
condition in, such transportation, and to improve the relations
between, and coordinate transportation by, air carriers;
(d) The promotion of adequate, economical and efficient
service by air carriers at reasonable charges, without unjust
 A d m i n i s t r a t i v e L a w N o . 2 P a g e | 23

discriminations, undue preferences or advantages, or unfair Convenience and Necessity, there being no legal obstacle to the exercise of
or destructive competitive practices; its jurisdiction.

(e) Competition between air carriers to the extent necessary
to assure the sound development of an air transportation
system properly adapted to the need of the foreign and
domestic commerce of the Philippines, of the Postal Service,
and of the National Defense;
ACCORDINGLY, in view of the foregoing considerations, the Court
RESOLVED to DISMISS the instant petition for lack of merit. The respondent
Civil Aeronautics Board is hereby DIRECTED to CONTINUE hearing the
application of respondent Grand International Airways, Inc. for the issuance
of a Certificate of Public Convenience and Necessity.

(f) To promote safety of flight in air commerce in the SO ORDERED.

Philippines; and,
Regalado and Puno, JJ., concur.
(g) The encouragement and development of civil
aeronautics. Romero and Mendoza JJ., took no part.

More importantly, the said law has enumerated the requirements to

determine the competency of a prospective operator to engage in the public
service of air transportation.

Sec. 12. Citizenship requirement. Except as otherwise

provided in the Constitution and existing treaty or treaties, a
permit authorizing a person to engage in domestic air
commerce and/or air transportation shall be issued only to
citizens of the Philippines 24

Sec. 21. Issuance of permit. The Board shall issue a permit

authorizing the whole or any part of the service covered by
the application, if it finds: (1) that the applicant is fit, willing
and able to perform such service properly in conformity with
the provisions of this Act and the rules, regulations, and
requirements issued thereunder; and (2) that such service is
required by the public convenience and necessity; otherwise
the application shall be denied.

Furthermore, the procedure for the processing of the application of a

Certificate of Public Convenience and Necessity had been established to
ensure the weeding out of those entities that are not deserving of public
service. 25

In sum, respondent Board should now be allowed to continue hearing the

application of GrandAir for the issuance of a Certificate of Public

[No. 17122. February 27, 1922]
THE UNITED STATES, plaintiff and appellee, vs. ANG TANG Ho,
defendant and appellant.
1.ORGANIC LAW.—By the organic law of the Philippine Islands and the
Constitution of the United States, all powers are. vested in the Legislature,
Executive, and Judiciary. It is the duty of the Legislature to make the law; of
the Executive to execute; and of the Judiciary to construe the law. The
Legislature has no authority to execute or construe the law; the Executive
has no authority to make or construe the law; and the Judiciary has no power
to make or execute the law.
2.POWER.—Subject to the Constitution only, the power of each branch is
supreme within its own jurisdiction, and it is for the Judiciary only to say when
any Act of the Legislature is or is not constitutional.
3.THE POWER TO DELEGATE.—The Legislature cannot delegate
legislative power to enact any law. If Act No. 2868 is a law unto itself and
within itself, and it does nothing mor£ than to authorize the Governor-General
to make rules and regulations to carry it into effect, then the Legislature
created the law. There is no delegation of power and it is valid. On the other
hand, if the act within itself does not define a crime and is not complete, and
some legislative act remains to be done to make it a law or a crime, the doing
of which is vested in the Governor-Geheral, the act is a delegation of
legislative power, is unconstitutional and void.
4.No CRIME TO SELL.—After the passage of Act No. 2868, and without any
rules and regulations of the Governor-General, a dealer in rice could sell it at,
any price and he would not commit a crime. There was no legislative act
which made it a crime to sell rice at any price.
5.CRIME BY PROCLAMATION.—When Act No. 2868 is analyzed, it is the
violation of the Proclamatlon of the Governor-General which constitutes the
crime. The alleged sale was made a crime, if at all, because of the
Proclamation by the Governor-General.
6.UNCONSTITUTIONAL.—In so far as Act No. 2868 undertakes to authorize
the Governor-General, in his discretion, to issue a proclamation fixing the
price of rice and to make the sale of it in violation of the proclamation a
crime, it is unconstitutional and void.
7.CONSTITUTION.—The Constitution is something solid, permanent and
substantial. Its stability protects the rights, liberty, and property rights of the
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 24
rich and the poor alike, and its construction ought not to change with
emergencies or conditions.
8.PRIVATE RIGHTS.—In the instant case, the law was not dealing with
Government property. It was dealing with private property and private rights
which are sacred under the Constitution.
9.PRIVATE PROPERTY.—In the instant case, the rice was the personal,
private property of the defendant. The Government had not bought it, did not
claim to own it, or have any interest in it at the time the defendant sold it to
one of his customers.
10.POWER VESTED IN THE LEGISLATURE.—By the organic act and
subject only to constitutional limitations, the power to legislate and enact laws
is vested exclusively in the Legislature, which is elected by a direct vote of
the people of the Philippine Islands.
11.OPINION LIMITED.—This opinion is confined to the right of the Governor-
General to issue a proclamation fixing the maximum price at which rice
should be sold, and to make it a crime to sell it at a higher price, and to that
extent holds that it is an unconstitutional delegation of legislative power. It
does not decide or undertake to construe the constitutionality of any of the
remaining portions of Act No. 2868.
APPEAL from a judgment of the Court of First Instance of Manila.
Concepcion, J.
The facts are stated in the opinion of the court.
Williams & Ferrier for appellant.
Acting Attorney-General Tuason for appellee.
JOHNS, J.:
At its special session of 1919, the Philippine Legislature passed Act No.
2868, entitled "An Act penalizing the monopoly and holding of, and
speculation in, palay, rice, and corn under extraordinary circumstances,
regulating the distribution and sale thereof, and authorizing the Governor-
General, with the consent of the Council of State, to issue the necessary
rules and regulations therefor, and making an appropriation for this purpose,"
the material provisions of which are as follows:

Section 1. The Governor-General is hereby authorized, whenever,
for any cause, conditions arise resulting in an extraordinary rise in
the price of palay, rice or corn, to issue and promulgate, with the
consent of the Council of State, temporary rules and emergency
measures for carrying out the purpose of this Act, to wit:
(a) To prevent the monopoly and hoarding of, and speculation in,
palay, rice or corn.
(b) To establish and maintain a government control of the distribution
or sale of the commodities referred to or have such distribution or
sale made by the Government itself.
(c) To fix, from time to time the quantities of palay rice, or corn that a
company or individual may acquire, and the maximum sale price that
the industrial or merchant may demand.
(d) . . .
SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other
manner obstruct the production or milling of palay, rice or corn for the
purpose of raising the prices thereof; to corner or hoard said
products as defined in section three of this Act; . . .
Section 3 defines what shall constitute a monopoly or hoarding of palay, rice
or corn within the meaning of this Act, but does not specify the price of rice or
define any basic for fixing the price.
SEC. 4. The violations of any of the provisions of this Act or of the
regulations, orders and decrees promulgated in accordance
therewith shall be punished by a fine of not more than five thousands
pesos, or by imprisonment for not more than two years, or both, in
the discretion of the court: Provided, That in the case of companies
or corporations the manager or administrator shall be criminally
liable.
SEC. 7. At any time that the Governor-General, with the consent of
the Council of State, shall consider that the public interest requires
the application of the provisions of this Act, he shall so declare by
proclamation, and any provisions of other laws inconsistent herewith
shall from then on be temporarily suspended.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 25
Upon the cessation of the reasons for which such proclamation was
issued, the Governor-General, with the consent of the Council of
State, shall declare the application of this Act to have likewise
terminated, and all laws temporarily suspended by virtue of the same
shall again take effect, but such termination shall not prevent the
prosecution of any proceedings or cause begun prior to such
termination, nor the filing of any proceedings for an offense
committed during the period covered by the Governor-General's
proclamation.
August 1, 1919, the Governor-General issued a proclamation fixing the price
at which rice should be sold.
August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho,
charging him with the sale of rice at an excessive price as follows:
The undersigned accuses Ang Tang Ho of a violation of Executive
Order No. 53 of the Governor-General of the Philippines, dated the
1st of August, 1919, in relation with the provisions of sections 1, 2
and 4 of Act No. 2868, committed as follows:
That on or about the 6th day of August, 1919, in the city of Manila,
Philippine Islands, the said Ang Tang Ho, voluntarily, illegally and
criminally sold to Pedro Trinidad, one ganta of rice at the price of
eighty centavos (P.80), which is a price greater than that fixed by
Executive Order No. 53 of the Governor-General of the Philippines,
dated the 1st of August, 1919, under the authority of section 1 of Act
No. 2868. Contrary to law.
Upon this charge, he was tried, found guilty and sentenced to five months'
imprisonment and to pay a fine of P500, from which he appealed to this
court, claiming that the lower court erred in finding Executive Order No. 53 of
1919, to be of any force and effect, in finding the accused guilty of the
offense charged, and in imposing the sentence.
The official records show that the Act was to take effect on its approval; that
it was approved July 30, 1919; that the Governor-General issued his
proclamation on the 1st of August, 1919; and that the law was first published
on the 13th of August, 1919; and that the proclamation itself was first
published on the 20th of August, 1919.
The question here involves an analysis and construction of Act No. 2868, in
so far as it authorizes the Governor-General to fix the price at which rice

should be sold. It will be noted that section 1 authorizes the Governor-
General, with the consent of the Council of State, for any cause resulting in
an extraordinary rise in the price of palay, rice or corn, to issue and
promulgate temporary rules and emergency measures for carrying out the
purposes of the Act. By its very terms, the promulgation of temporary rules
and emergency measures is left to the discretion of the Governor-General.
The Legislature does not undertake to specify or define under what
conditions or for what reasons the Governor-General shall issue the
proclamation, but says that it may be issued "for any cause," and leaves the
question as to what is "any cause" to the discretion of the Governor-General.
The Act also says: "For any cause, conditions arise resulting in an
extraordinary rise in the price of palay, rice or corn." The Legislature does not
specify or define what is "an extraordinary rise." That is also left to the
discretion of the Governor-General. The Act also says that the Governor-
General, "with the consent of the Council of State," is authorized to issue and
promulgate "temporary rules and emergency measures for carrying out the
purposes of this Act." It does not specify or define what is a temporary rule or
an emergency measure, or how long such temporary rules or emergency
measures shall remain in force and effect, or when they shall take effect.
That is to say, the Legislature itself has not in any manner specified or
defined any basis for the order, but has left it to the sole judgement and
discretion of the Governor-General to say what is or what is not "a cause,"
and what is or what is not "an extraordinary rise in the price of rice," and as to
what is a temporary rule or an emergency measure for the carrying out the
purposes of the Act. Under this state of facts, if the law is valid and the
Governor-General issues a proclamation fixing the minimum price at which
rice should be sold, any dealer who, with or without notice, sells rice at a
higher price, is a criminal. There may not have been any cause, and the price
may not have been extraordinary, and there may not have been an
emergency, but, if the Governor-General found the existence of such facts
and issued a proclamation, and rice is sold at any higher price, the seller
commits a crime.
By the organic law of the Philippine Islands and the Constitution of the United
States all powers are vested in the Legislative, Executive and Judiciary. It is
the duty of the Legislature to make the law; of the Executive to execute the
law; and of the Judiciary to construe the law. The Legislature has no
authority to execute or construe the law, the Executive has no authority to
make or construe the law, and the Judiciary has no power to make or
execute the law. Subject to the Constitution only, the power of each branch is
supreme within its own jurisdiction, and it is for the Judiciary only to say when
any Act of the Legislature is or is not constitutional. Assuming, without
deciding, that the Legislature itself has the power to fix the price at which rice
is to be sold, can it delegate that power to another, and, if so, was that power
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 26
legally delegated by Act No. 2868? In other words, does the Act delegate
legislative power to the Governor-General? By the Organic Law, all
Legislative power is vested in the Legislature, and the power conferred upon
the Legislature to make laws cannot be delegated to the Governor-General,
or any one else. The Legislature cannot delegate the legislative power to
enact any law. If Act no 2868 is a law unto itself and within itself, and it does
nothing more than to authorize the Governor-General to make rules and
regulations to carry the law into effect, then the Legislature itself created the
law. There is no delegation of power and it is valid. On the other hand, if the
Act within itself does not define crime, and is not a law, and some legislative
act remains to be done to make it a law or a crime, the doing of which is
vested in the Governor-General, then the Act is a delegation of legislative
power, is unconstitutional and void.
The Supreme Court of the United States in what is known as the Granger
Cases (94 U.S., 183-187; 24 L. ed., 94), first laid down the rule:
Railroad companies are engaged in a public employment affecting
the public interest and, under the decision in Munn vs. Ill., ante, 77,
are subject to legislative control as to their rates of fare and freight
unless protected by their charters.
The Illinois statute of Mar. 23, 1874, to establish reasonable
maximum rates of charges for the transportation of freights and
passengers on the different railroads of the State is not void as being
repugnant to the Constitution of the United States or to that of the
State.
It was there for the first time held in substance that a railroad was a public
utility, and that, being a public utility, the State had power to establish
reasonable maximum freight and passenger rates. This was followed by the
State of Minnesota in enacting a similar law, providing for, and empowering,
a railroad commission to hear and determine what was a just and reasonable
rate. The constitutionality of this law was attacked and upheld by the
Supreme Court of Minnesota in a learned and exhaustive opinion by Justice
Mitchell, in the case of State vs. Chicago, Milwaukee & St. Paul ry. Co. (38
Minn., 281), in which the court held:
Regulations of railway tariffs — Conclusiveness of commission's
tariffs. — Under Laws 1887, c. 10, sec. 8, the determination of the
railroad and warehouse commission as to what are equal and
reasonable fares and rates for the transportation of persons and
property by a railway company is conclusive, and, in proceedings

by mandamus to compel compliance with the tariff of rates
recommended and published by them, no issue can be raised or
inquiry had on that question.
Same — constitution — Delegation of power to commission. — The
authority thus given to the commission to determine, in the exercise
of their discretion and judgement, what are equal and reasonable
rates, is not a delegation of legislative power.
It will be noted that the law creating the railroad commission expressly
provides —
That all charges by any common carrier for the transportation of
passengers and property shall be equal and reasonable.
With that as a basis for the law, power is then given to the railroad
commission to investigate all the facts, to hear and determine what is a just
and reasonable rate. Even then that law does not make the violation of the
order of the commission a crime. The only remedy is a civil proceeding. It
was there held —
That the legislative itself has the power to regulate railroad charges
is now too well settled to require either argument or citation of
authority.
The difference between the power to say what the law shall be, and
the power to adopt rules and regulations, or to investigate and
determine the facts, in order to carry into effect a law already passed,
is apparent. The true distinction is between the delegation of power
to make the law, which necessarily involves a discretion as to what it
shall be, and the conferring an authority or discretion to be exercised
under and in pursuance of the law.
The legislature enacts that all freights rates and passenger fares
should be just and reasonable. It had the undoubted power to fix
these rates at whatever it deemed equal and reasonable.
They have not delegated to the commission any authority or
discretion as to what the law shall be, — which would not be
allowable, — but have merely conferred upon it an authority and
discretion, to be exercised in the execution of the law, and under and
in pursuance of it, which is entirely permissible. The legislature itself
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 27
has passed upon the expediency of the law, and what is shall be.
The commission is intrusted with no authority or discretion upon
these questions. It can neither make nor unmake a single provision
of law. It is merely charged with the administration of the law, and
with no other power.
The delegation of legislative power was before the Supreme Court of
Wisconsin in Dowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion
says:
"The true distinction is between the delegation of power to make the
law, which necessarily involves a discretion as to what it shall be,
and conferring authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be
done; to the latter no valid objection can be made."
The act, in our judgment, wholly fails to provide definitely and clearly what
the standard policy should contain, so that it could be put in use as a uniform
policy required to take the place of all others, without the determination of the
insurance commissioner in respect to maters involving the exercise of a
legislative discretion that could not be delegated, and without which the act
could not possibly be put in use as an act in confirmity to which all fire
insurance policies were required to be issued.
The result of all the cases on this subject is that a law must be complete, in
all its terms and provisions, when it leaves the legislative branch of the
government, and nothing must be left to the judgement of the electors or
other appointee or delegate of the legislature, so that, in form and substance,
it is a law in all its details in presenti, but which may be left to take effect in
futuro, if necessary, upon the ascertainment of any prescribed fact or event.
The delegation of legislative power was before the Supreme Court in United
States vs. Grimaud (220 U.S., 506; 55 L. ed., 563), where it was held that the
rules and regulations of the Secretary of Agriculture as to a trespass on
government land in a forest reserve were valid constitutional. The Act there
provided that the Secretary of Agriculture ". . . may make such rules and
regulations and establish such service as will insure the object of such
reservations; namely, to regulate their occupancy and use, and to preserve
the forests thereon from destruction; and any violation of the provisions of
this act or such rules and regulations shall be punished, . . ."
The brief of the United States Solicitor-General says:

In refusing permits to use a forest reservation for stock grazing,
except upon stated terms or in stated ways, the Secretary of
Agriculture merely assert and enforces the proprietary right of the
United States over land which it owns. The regulation of the
Secretary, therefore, is not an exercise of legislative, or even of
administrative, power; but is an ordinary and legitimate refusal of the
landowner's authorized agent to allow person having no right in the
land to use it as they will. The right of proprietary control is altogether
different from governmental authority.
The opinion says:
From the beginning of the government, various acts have been
passed conferring upon executive officers power to make rules and
regulations, — not for the government of their departments, but for
administering the laws which did govern. None of these statutes
could confer legislative power. But when Congress had legislated
power. But when Congress had legislated and indicated its will, it
could give to those who were to act under such general provisions
"power to fill up the details" by the establishment of administrative
rules and regulations, the violation of which could be punished by
fine or imprisonment fixed by Congress, or by penalties fixed by
Congress, or measured by the injury done.
That "Congress cannot delegate legislative power is a principle
universally recognized as vital to the integrity and maintenance of the
system of government ordained by the Constitution."
If, after the passage of the act and the promulgation of the rule, the
defendants drove and grazed their sheep upon the reserve, in
violation of the regulations, they were making an unlawful use of the
government's property. In doing so they thereby made themselves
liable to the penalty imposed by Congress.
The subjects as to which the Secretary can regulate are defined. The lands
are set apart as a forest reserve. He is required to make provisions to protect
them from depredations and from harmful uses. He is authorized 'to regulate
the occupancy and use and to preserve the forests from destruction.' A
violation of reasonable rules regulating the use and occupancy of the
property is made a crime, not by the Secretary, but by Congress."
The above are leading cases in the United States on the question of
delegating legislative power. It will be noted that in the "Granger Cases," it
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 28
was held that a railroad company was a public corporation, and that a
railroad was a public utility, and that, for such reasons, the legislature had the
power to fix and determine just and reasonable rates for freight and
passengers.
The Minnesota case held that, so long as the rates were just and reasonable,
the legislature could delegate the power to ascertain the facts and determine
from the facts what were just and reasonable rates,. and that in vesting the
commission with such power was not a delegation of legislative power.
The Wisconsin case was a civil action founded upon a "Wisconsin standard
policy of fire insurance," and the court held that "the act, . . . wholly fails to
provide definitely and clearly what the standard policy should contain, so that
it could be put in use as a uniform policy required to take the place of all
others, without the determination of the insurance commissioner in respect to
matters involving the exercise of a legislative discretion that could not be
delegated."
The case of the United States Supreme Court, supra dealt with rules and
regulations which were promulgated by the Secretary of Agriculture for
Government land in the forest reserve.
These decisions hold that the legislative only can enact a law, and that it
cannot delegate it legislative authority.
The line of cleavage between what is and what is not a delegation of
legislative power is pointed out and clearly defined. As the Supreme Court of
Wisconsin says:
That no part of the legislative power can be delegated by the
legislature to any other department of the government, executive or
judicial, is a fundamental principle in constitutional law, essential to
the integrity and maintenance of the system of government
established by the constitution.
Where an act is clothed with all the forms of law, and is complete in
and of itself, it may be provided that it shall become operative only
upon some certain act or event, or, in like manner, that its operation
shall be suspended.
The legislature cannot delegate its power to make a law, but it can
make a law to delegate a power to determine some fact or state of

things upon which the law makes, or intends to make, its own action
to depend.
The Village of Little Chute enacted an ordinance which provides:
All saloons in said village shall be closed at 11 o'clock P.M. each day
and remain closed until 5 o'clock on the following morning, unless by
special permission of the president.
Construing it in 136 Wis., 526; 128 A. S. R., 1100,1 the Supreme Court of that
State says:
We regard the ordinance as void for two reasons; First, because it
attempts to confer arbitrary power upon an executive officer, and
allows him, in executing the ordinance, to make unjust and
groundless discriminations among persons similarly situated;
second, because the power to regulate saloons is a law-making
power vested in the village board, which cannot be delegated. A
legislative body cannot delegate to a mere administrative officer
power to make a law, but it can make a law with provisions that it
shall go into effect or be suspended in its operations upon the
ascertainment of a fact or state of facts by an administrative officer or
board. In the present case the ordinance by its terms gives power to
the president to decide arbitrary, and in the exercise of his own
discretion, when a saloon shall close. This is an attempt to vest
legislative discretion in him, and cannot be sustained.
The legal principle involved there is squarely in point here.
It must be conceded that, after the passage of act No. 2868, and before any
rules and regulations were promulgated by the Governor-General, a dealer in
rice could sell it at any price, even at a peso per "ganta," and that he would
not commit a crime, because there would be no law fixing the price of rice,
and the sale of it at any price would not be a crime. That is to say, in the
absence of a proclamation, it was not a crime to sell rice at any price. Hence,
it must follow that, if the defendant committed a crime, it was because the
Governor-General issued the proclamation. There was no act of the
Legislature making it a crime to sell rice at any price, and without the
proclamation, the sale of it at any price was to a crime.
The Executive order2 provides:
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 29
(5) The maximum selling price of palay, rice or corn is hereby fixed,
for the time being as follows:
In Manila —
Palay at P6.75 per sack of 57½ kilos, or 29 centavos per ganta.
Rice at P15 per sack of 57½ kilos, or 63 centavos per ganta.
Corn at P8 per sack of 57½ kilos, or 34 centavos per ganta.
In the provinces producing palay, rice and corn, the maximum price
shall be the Manila price less the cost of transportation from the
source of supply and necessary handling expenses to the place of
sale, to be determined by the provincial treasurers or their deputies.
In provinces, obtaining their supplies from Manila or other producing
provinces, the maximum price shall be the authorized price at the
place of supply or the Manila price as the case may be, plus the
transportation cost, from the place of supply and the necessary
handling expenses, to the place of sale, to be determined by the
provincial treasurers or their deputies.
(6) Provincial treasurers and their deputies are hereby directed to
communicate with, and execute all instructions emanating from the
Director of Commerce and Industry, for the most effective and proper
enforcement of the above regulations in their respective localities.
The law says that the Governor-General may fix "the maximum sale price
that the industrial or merchant may demand." The law is a general law and
not a local or special law.
The proclamation undertakes to fix one price for rice in Manila and other and
different prices in other and different provinces in the Philippine Islands, and
delegates the power to determine the other and different prices to provincial
treasurers and their deputies. Here, then, you would have a delegation of
legislative power to the Governor-General, and a delegation by him of that
power to provincial treasurers and their deputies, who "are hereby directed to
communicate with, and execute all instructions emanating from the Director
of Commerce and Industry, for the most effective and proper enforcement of
the above regulations in their respective localities." The issuance of the

proclamation by the Governor-General was the exercise of the delegation of
a delegated power, and was even a sub delegation of that power.
Assuming that it is valid, Act No. 2868 is a general law and does not
authorize the Governor-General to fix one price of rice in Manila and another
price in Iloilo. It only purports to authorize him to fix the price of rice in the
Philippine Islands under a law, which is General and uniform, and not local or
special. Under the terms of the law, the price of rice fixed in the proclamation
must be the same all over the Islands. There cannot be one price at Manila
and another at Iloilo. Again, it is a mater of common knowledge, and of which
this court will take judicial notice, that there are many kinds of rice with
different and corresponding market values, and that there is a wide range in
the price, which varies with the grade and quality. Act No. 2868 makes no
distinction in price for the grade or quality of the rice, and the proclamation,
upon which the defendant was tried and convicted, fixes the selling price of
rice in Manila "at P15 per sack of 57½ kilos, or 63 centavos per ganta," and
is uniform as to all grades of rice, and says nothing about grade or quality.
Again, it will be noted that the law is confined to palay, rice and corn. They
are products of the Philippine Islands. Hemp, tobacco, coconut, chickens,
eggs, and many other things are also products. Any law which single out
palay, rice or corn from the numerous other products of the Islands is not
general or uniform, but is a local or special law. If such a law is valid, then by
the same principle, the Governor-General could be authorized by
proclamation to fix the price of meat, eggs, chickens, coconut, hemp, and
tobacco, or any other product of the Islands. In the very nature of things, all
of that class of laws should be general and uniform. Otherwise, there would
be an unjust discrimination of property rights, which, under the law, must be
equal and inform. Act No. 2868 is nothing more than a floating law, which, in
the discretion and by a proclamation of the Governor-General, makes it a
floating crime to sell rice at a price in excess of the proclamation, without
regard to grade or quality.
When Act No. 2868 is analyzed, it is the violation of the proclamation of the
Governor-General which constitutes the crime. Without that proclamation, it
was no crime to sell rice at any price. In other words, the Legislature left it to
the sole discretion of the Governor-General to say what was and what was
not "any cause" for enforcing the act, and what was and what was not "an
extraordinary rise in the price of palay, rice or corn," and under certain
undefined conditions to fix the price at which rice should be sold, without
regard to grade or quality, also to say whether a proclamation should be
issued, if so, when, and whether or not the law should be enforced, how long
it should be enforced, and when the law should be suspended. The
Legislature did not specify or define what was "any cause," or what was "an
extraordinary rise in the price of rice, palay or corn," Neither did it specify or
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 30
define the conditions upon which the proclamation should be issued. In the
absence of the proclamation no crime was committed. The alleged sale was
made a crime, if at all, because the Governor-General issued the
proclamation. The act or proclamation does not say anything about the
different grades or qualities of rice, and the defendant is charged with the
sale "of one ganta of rice at the price of eighty centavos (P0.80) which is a
price greater than that fixed by Executive order No. 53."
We are clearly of the opinion and hold that Act No. 2868, in so far as it
undertakes to authorized the Governor-General in his discretion to issue a
proclamation, fixing the price of rice, and to make the sale of rice in violation
of the price of rice, and to make the sale of rice in violation of the
proclamation a crime, is unconstitutional and void.
It may be urged that there was an extraordinary rise in the price of rice and
profiteering, which worked a severe hardship on the poorer classes, and that
an emergency existed, but the question here presented is the
constitutionality of a particular portion of a statute, and none of such matters
is an argument for, or against, its constitutionality.
The Constitution is something solid, permanent an substantial. Its stability
protects the life, liberty and property rights of the rich and the poor alike, and
that protection ought not to change with the wind or any emergency
condition. The fundamental question involved in this case is the right of the
people of the Philippine Islands to be and live under a republican form of
government. We make the broad statement that no state or nation, living
under republican form of government, under the terms and conditions
specified in Act No. 2868, has ever enacted a law delegating the power to
any one, to fix the price at which rice should be sold. That power can never
be delegated under a republican form of government.
In the fixing of the price at which the defendant should sell his rice, the law
was not dealing with government property. It was dealing with private
property and private rights, which are sacred under the Constitution. If this
law should be sustained, upon the same principle and for the same reason,
the Legislature could authorize the Governor-General to fix the price of every
product or commodity in the Philippine Islands, and empower him to make it
a crime to sell any product at any other or different price.
It may be said that this was a war measure, and that for such reason the
provision of the Constitution should be suspended. But the Stubborn fact
remains that at all times the judicial power was in full force and effect, and
that while that power was in force and effect, such a provision of the

Constitution could not be, and was not, suspended even in times of war. It
may be claimed that during the war, the United States Government
undertook to, and did, fix the price at which wheat and flour should be bought
and sold, and that is true. There, the United States had declared war, and at
the time was at war with other nations, and it was a war measure, but it is
also true that in doing so, and as a part of the same act, the United States
commandeered all the wheat and flour, and took possession of it, either
actual or constructive, and the government itself became the owner of the
wheat and flour, and fixed the price to be paid for it. That is not this case.
Here the rice sold was the personal and private property of the defendant,
who sold it to one of his customers. The government had not bought and did
not claim to own the rice, or have any interest in it, and at the time of the
alleged sale, it was the personal, private property of the defendant. It may be
that the law was passed in the interest of the public, but the members of this
court have taken on solemn oath to uphold and defend the Constitution, and
it ought not to be construed to meet the changing winds or emergency
conditions. Again, we say that no state or nation under a republican form of
government ever enacted a law authorizing any executive, under the
conditions states, to fix the price at which a price person would sell his own
rice, and make the broad statement that no decision of any court, on principle
or by analogy, will ever be found which sustains the constitutionality of the
particular portion of Act No. 2868 here in question. By the terms of the
Organic Act, subject only to constitutional limitations, the power to legislate
and enact laws is vested exclusively in the Legislative, which is elected by a
direct vote of the people of the Philippine Islands. As to the question here
involved, the authority of the Governor-General to fix the maximum price at
which palay, rice and corn may be sold in the manner power in violation of
the organic law.
This opinion is confined to the particular question here involved, which is the
right of the Governor-General, upon the terms and conditions stated in the
Act, to fix the price of rice and make it a crime to sell it at a higher price, and
which holds that portions of the Act unconstitutional. It does not decide or
undertake to construe the constitutionality of any of the remaining portions of
the Act.
The judgment of the lower court is reversed, and the defendant discharged.
So ordered.
Araullo, C.J., Johnson, Street and Ostrand, JJ., concur.
Romualdez, J., concurs in the result.
Separate Opinions
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 31
MALCOLM, J., concurring:
I concur in the result for reasons which reach both the facts and the law. In
the first place, as to the facts, — one cannot be convicted ex post facto of a
violation of a law and of an executive order issued pursuant to the law, when
the alleged violation thereof occurred on August 6, 1919, while the Act of the
Legislature in question was not published until August 13, 1919, and the
order was not published until August 20, 1919. In the second place, as to the
law, — one cannot be convicted of a violation of a law or of an order issued
pursuant to the law when both the law and the order fail to set up an
ascertainable standard of guilt. (U.S. vs. Cohen Grocery Company [1921],
255 U.S., 81, holding section 4 of the Federal Food Control Act of August 10,
1917, as amended, invalid.)
In order that there may not be any misunderstanding of our position, I would
respectfully invite attention to the decision of the United States Supreme
Court in German Alliance Ins. Co. vs. Lewis ([1914, 233 U.S., 389),
concerning the legislative regulation of the prices charged by business
affected with a public interest, and to another decision of the United States
Supreme Court, that of Marshall Field & Co. vs. Clark ([1892], 143 U.S.,
649), which adopts as its own the principles laid down in the case of Locke's
Appeal ([1873], 72 Pa. St., 491), namely; "The Legislature cannot delegate
its power to make a law; but it can make a law to delegate a power to
determine some fact or state of things upon which the law makes, or intends
to make, its own action depend. To deny this would be to stop the wheels of
government. There are many things upon which wise and useful legislation
must depend which cannot be known to the law-making power, and must,
therefore, be a subject of inquiry and determination outside of the halls of
legislation."
Avanceña and Villamor, JJ., concur.
Footnotes
1Village of Little Chute vs. Van Camp.
2Executive Order No. 53, series of 1919.

No. L-74457. March 20,1987.*
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT,
THE STATION COMMANDER, INTEGRATED NATIONAL POLICE,
BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU
OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.
Constitutional Law; Jurisdiction; Lower courts have authority to resolve the
issue of constitutionality of legislative measures.—This Court has declared
that while lower courts should observe a becoming modesty in examining
constitutional questions, they are nonetheless not prevented from resolving
the same whenever warranted, subject only to review by the highest tribunal.
We have jurisdiction under the Constitution to "review, revise, reverse,
modify or affirm on appeal or certiorari, as the law or rules of court may
provide," final judgments and orders of lower courts in, among others, all
cases involving the constitutionality of certain measures. This simply means
that the resolution of such cases may be made in the first instance by these
lower courts.
Same; Due Process; Judgments must be based on the sporting idea of fair
play.—The closed mind has no place in the open society. It is part of the
sporting idea of fair play to hear "the other side" before an opinion is formed
or a decision is made by those who sit in judgment. Obviously, one side is
only one-half of the question; the other half must also be considered if an
impartial verdict is to be reached based on an informed appreciation of the
issues in contention. It is indispensable that the two sides complement each
other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but in
its totality. A judgment based on less that this full appraisal, on the pretext
that a hearing is unnecessary or useless, is tainted with the vice of bias or
intolerance or ignorance, or worst of all, in repressive regimes, the insolence
of power.
Same; Same; The ban on slaughter of carabaos is directly related to public
welfare.—In the light of the tests mentioned above, we hold with the Toribio
Case that the carabao, as the poor man's tractor, so to speak, has a direct
relevance to the public welfare and so is a lawful subject of Executive Order
No. 626. The method chosen in the basic measure is also reasonably
necessary for the purpose sought to be achieved and not unduly oppressive
upon individuals, again following the above-cited doctrine. There is no doubt
that by banning the slaughter of these animals except where they are at least
seven years old if male and eleven years old if female upon issuance of the
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 32
necessary permit, the executive order will be conserving those still fit for farm
work or breeding and preventing their improvident depletion.
Same; Same; The ban on the transportation of carabaos from one province
to another (E.O. 626-A), their confiscation and disposal without a prior court
hearing is violative of due process for lack of reasonable connection between
the means employed and the purpose to be achieved and for being
confiscatory.—But while conceding that the amendatory measure has the
same lawful subject as the original executive order, we cannot say with equal
certainty that it complies with the second requirement, viz., that there be a
lawful method. We note that to strengthen the original measure, Executive
Order No. 626-A imposes an absolute ban not on the slaughter of the
carabaos but on their movement, providing that "no carabao regardless of
age, sex, physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the prohibition
escapes us. The reasonable connection between the means employed and
the purpose sought to be achieved by the questioned measure is missing.
Same; Same; Same.—Even if a reasonable relation between the means and
the end were to be assumed, we would still have to reckon with the sanction
that the measure applies for violation of the prohibition. The penalty is
outright confiscation of the carabao or carabeef being transported, to be
meted out by the executive authorities, usually the police only. In the Toribio
Case, the statute was sustained because the penalty prescribed was fine
and imprisonment, to be imposed by the court after trial and conviction of the
accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately impounded by
the police and declared, by the measure itself, as forfeited to the
government.
Same; Same; Same.—We also mark, on top of all this, the questionable
manner of the disposition of the confiscated property as prescribed in the
questioned executive order. It is there authorized that the seized property
shall "be distributed to charitable institutions and other similar institutions as
the Chairman of the National Meat Inspection Commission may see fit, in the
case of carabeef, and to deserving farmers through dispersal as the Director
of Animal Industry may see fit, in the case of carabaos." (Emphasis
supplied.) The phrase "may see fit" is an extremely generous and dangerous
condition, if condition it is. It is laden with perilous opportunities for partiality
and abuse, and even corruption. One searches in vain for the usual standard
and the reasonable guidelines, or better still, the limitations that the said
officers must observe when they make their distribution. There is none. Their

options are apparently boundless. Who shall be the fortunate beneficiaries of
their generosity and by what criteria shall they be chosen? Only the officers
named can supply the answer, they and they alone may choose the grantee
as they see fit, and in their own exclusive discretion. Definitely, there is here
a "roving commission," a wide and sweeping authority that is not "canalized
within banks that keep it from overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers.
Same; Same; Same.—To sum up then, we find that the challenged measure
is an invalid exercise of the police power because the method employed to
conserve the carabaos is not reasonably necessary to the purpose of the law
and, worse, is unduly oppressive. Due process is violated because the owner
of the property conf iscated is denied the right to be heard in his defense and
is immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the supposed
offender is a clear encroachment on judicial functions and militates against
the doctrine of separation of powers. There is, finally, also an invalid
delegation of legislative powers to the of ficers mentioned therein who are
granted unlimited discretion in the distribution of the properties arbitrarily
taken.
Same; Same; Omission of right to a prior hearing can be justified only where
a problem needs immediate and urgent correction.—It has already been
remarked that there are occasions when notice and hearing may be validly
dispensed with notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action may be
validly taken in administrative proceedings as procedural due process is not
necessarily judicial only. In the exceptional cases accepted, however, there
is a justification for the omission of the right to a previous hearing, to wit, the
immediacy of the problem sought to be corrected and the urgency of the
need to correct it. In the case before us, there was no such pressure of time
or action calling for the petitioner's peremptory treatment. The properties
involved were not even inimical per se as to require their instant destruction.
There certainly was no reason why the offense prohibited by the executive
order should not have been proved first in a court of justice, with the accused
being accorded all the rights safeguarded to him under the Constitution.
Considering that, as we held in Pesigan v. Angeles, Executive Order No.
626-A is penal in nature, the violation thereof should have been pronounced
not by the police only but by a court of justice, which alone would have had
the authority to impose the prescribed penalty, and only after trial and
conviction of the accused.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 33
Same; Same; Damages; A police officer who confiscated carabaos being
transported in violation of E.O. 626-A is not liable for damages even if said
Executive Order were later declared unconstitutional.—We agree with the
respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing
the executive order in accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the police, to
enforce it. It would have been impertinent of him, being a mere subordinate
of the President, to declare the executive order unconstitutional and, on his
own responsibility alone, refuse to execute it. Even the trial court, in fact, and
the Court of Appeals itself did not feel they had the competence, for all their
superior authority, to question the order we now annul.
PETITION for certiorari to review the decision of the Intermediate Appellate
Court.
The facts are stated in the opinion of the Court.
Ramon A. Gonzales for petitioner.
CRUZ, J..
The essence of due process is distilled in the immortal cry of Themistocles
to Alcibiades "Strike — but hear me first!" It is this cry that the petitioner in
effect repeats here as he challenges the constitutionality of Executive Order
No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders prohibiting the
interprovincial movement of carabaos and the slaughtering
of carabaos not complying with the requirements of
Executive Order No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders
the violators still manage to circumvent the prohibition
against inter-provincial movement of carabaos by
transporting carabeef instead; and
WHEREAS, in order to achieve the purposes and objectives
of Executive Order No. 626 and the prohibition against

interprovincial movement of carabaos, it is necessary to
strengthen the said Executive Order and provide for the
disposition of the carabaos and carabeef subject of the
violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers vested in
me by the Constitution, do hereby promulgate the following:
SECTION 1. Executive Order No. 626 is hereby amended
such that henceforth, no carabao regardless of age, sex,
physical condition or purpose and no carabeef shall be
transported from one province to another. The carabao or
carabeef transported in violation of this Executive Order as
amended shall be subject to confiscation and forfeiture by
the government, to be distributed to charitable institutions
and other similar institutions as the Chairman of the National
Meat Inspection Commission may ay see fit, in the case of
carabeef, and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of
carabaos.
SECTION 2. This Executive Order shall take effect
immediately.
Done in the City of Manila, this 25th day of October, in the
year of Our Lord, nineteen hundred and eighty.
The petitioner had transported six carabaos in a pump boat from Masbate to
Iloilo on January 13, 1984, when they were confiscated by the police station
commander of Barotac Nuevo, Iloilo, for violation of the above
measure. 1 The petitioner sued for recovery, and the Regional Trial Court of
Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of
P12,000.00. After considering the merits of the case, the court sustained the
confiscation of the carabaos and, since they could no longer be produced,
ordered the confiscation of the bond. The court also declined to rule on the
constitutionality of the executive order, as raise by the petitioner, for lack of
authority and also for its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate
Court,* 3 which upheld the trial court, ** and he has now come before us in
this petition for review on certiorari.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 34
The thrust of his petition is that the executive order is unconstitutional insofar
as it authorizes outright confiscation of the carabao or carabeef being
transported across provincial boundaries. His claim is that the penalty is
invalid because it is imposed without according the owner a right to be heard
before a competent and impartial court as guaranteed by due process. He
complains that the measure should not have been presumed, and so
sustained, as constitutional. There is also a challenge to the improper
exercise of the legislative power by the former President under Amendment
No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v.
Angeles 5 is not applicable here. The question raised there was the necessity
of the previous publication of the measure in the Official Gazette before it
could be considered enforceable. We imposed the requirement then on the
basis of due process of law. In doing so, however, this Court did not, as
contended by the Solicitor General, impliedly affirm the constitutionality of
Executive Order No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a becoming
modesty in examining constitutional questions, they are nonetheless not
prevented from resolving the same whenever warranted, subject only to
review by the highest tribunal. 6 We have jurisdiction under the Constitution
to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law
or rules of court may provide," final judgments and orders of lower courts in,
among others, all cases involving the constitutionality of certain
measures. 7 This simply means that the resolution of such cases may be
made in the first instance by these lower courts.
And while it is true that laws are presumed to be constitutional, that
presumption is not by any means conclusive and in fact may be rebutted.
Indeed, if there be a clear showing of their invalidity, and of the need to
declare them so, then "will be the time to make the hammer fall, and
heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise,
courts should not follow the path of least resistance by simply presuming the
constitutionality of a law when it is questioned. On the contrary, they should
probe the issue more deeply, to relieve the abscess, paraphrasing another
distinguished jurist, 9 and so heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise is demanded, there
should be no shirking of the task for fear of retaliation, or loss of favor, or
popular censure, or any other similar inhibition unworthy of the bench,
especially this Court.

The challenged measure is denominated an executive order but it is really
presidential decree, promulgating a new rule instead of merely implementing
an existing law. It was issued by President Marcos not for the purpose of
taking care that the laws were faithfully executed but in the exercise of his
legislative authority under Amendment No. 6. It was provided thereunder that
whenever in his judgment there existed a grave emergency or a threat or
imminence thereof or whenever the legislature failed or was unable to act
adequately on any matter that in his judgment required immediate action, he
could, in order to meet the exigency, issue decrees, orders or letters of
instruction that were to have the force and effect of law. As there is no
showing of any exigency to justify the exercise of that extraordinary power
then, the petitioner has reason, indeed, to question the validity of the
executive order. Nevertheless, since the determination of the grounds was
supposed to have been made by the President "in his judgment, " a phrase
that will lead to protracted discussion not really necessary at this time, we
reserve resolution of this matter until a more appropriate occasion. For the
nonce, we confine ourselves to the more fundamental question of due
process.
It is part of the art of constitution-making that the provisions of the charter be
cast in precise and unmistakable language to avoid controversies that might
arise on their correct interpretation. That is the Ideal. In the case of the due
process clause, however, this rule was deliberately not followed and the
wording was purposely kept ambiguous. In fact, a proposal to delineate it
more clearly was submitted in the Constitutional Convention of 1934, but it
was rejected by Delegate Jose P. Laurel, Chairman of the Committee on the
Bill of Rights, who forcefully argued against it. He was sustained by the
body. 10
The due process clause was kept intentionally vague so it would remain also
conveniently resilient. This was felt necessary because due process is not,
like some provisions of the fundamental law, an "iron rule" laying down an
implacable and immutable command for all seasons and all persons.
Flexibility must be the best virtue of the guaranty. The very elasticity of the
due process clause was meant to make it adapt easily to every situation,
enlarging or constricting its protection as the changing times and
circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific
description of due process lest they confine themselves in a legal straitjacket
that will deprive them of the elbow room they may need to vary the meaning
of the clause whenever indicated. Instead, they have preferred to leave the
import of the protection open-ended, as it were, to be "gradually ascertained
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 35
by the process of inclusion and exclusion in the course of the decision of
cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme
Court, for example, would go no farther than to define due process — and in
so doing sums it all up — as nothing more and nothing less than "the
embodiment of the sporting Idea of fair play." 12
When the barons of England extracted from their sovereign liege the
reluctant promise that that Crown would thenceforth not proceed against the
life liberty or property of any of its subjects except by the lawful judgment of
his peers or the law of the land, they thereby won for themselves and their
progeny that splendid guaranty of fairness that is now the hallmark of the free
society. The solemn vow that King John made at Runnymede in 1215 has
since then resounded through the ages, as a ringing reminder to all rulers,
benevolent or base, that every person, when confronted by the stern visage
of the law, is entitled to have his say in a fair and open hearing of his cause.
The closed mind has no place in the open society. It is part of the sporting
Idea of fair play to hear "the other side" before an opinion is formed or a
decision is made by those who sit in judgment. Obviously, one side is only
one-half of the question; the other half must also be considered if an impartial
verdict is to be reached based on an informed appreciation of the issues in
contention. It is indispensable that the two sides complement each other, as
unto the bow the arrow, in leading to the correct ruling after examination of
the problem not from one or the other perspective only but in its totality. A
judgment based on less that this full appraisal, on the pretext that a hearing
is unnecessary or useless, is tainted with the vice of bias or intolerance or
ignorance, or worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing 13 which,
generally speaking, may not be dispensed with because they are intended as
a safeguard against official arbitrariness. It is a gratifying commentary on our
judicial system that the jurisprudence of this country is rich with applications
of this guaranty as proof of our fealty to the rule of law and the ancient
rudiments of fair play. We have consistently declared that every person,
faced by the awesome power of the State, is entitled to "the law of the land,"
which Daniel Webster described almost two hundred years ago in the
famous Dartmouth College Case, 14 as "the law which hears before it
condemns, which proceeds upon inquiry and renders judgment only after
trial." It has to be so if the rights of every person are to be secured beyond
the reach of officials who, out of mistaken zeal or plain arrogance, would
degrade the due process clause into a worn and empty catchword.

This is not to say that notice and hearing are imperative in every case for, to
be sure, there are a number of admitted exceptions. The conclusive
presumption, for example, bars the admission of contrary evidence as long
as such presumption is based on human experience or there is a rational
connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditions action will
justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight
because of the immediate danger it poses to the safety and lives of the
people. Pornographic materials, contaminated meat and narcotic drugs are
inherently pernicious and may be summarily destroyed. The passport of a
person sought for a criminal offense may be cancelled without hearing, to
compel his return to the country he has fled. 16 Filthy restaurants may be
summarily padlocked in the interest of the public health and bawdy houses to
protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the
property involved or the urgency of the need to protect the general welfare
from a clear and present danger.
The protection of the general welfare is the particular function of the police
power which both restraints and is restrained by due process. The police
power is simply defined as the power inherent in the State to regulate liberty
and property for the promotion of the general welfare. 18 By reason of its
function, it extends to all the great public needs and is described as the most
pervasive, the least limitable and the most demanding of the three inherent
powers of the State, far outpacing taxation and eminent domain. The
individual, as a member of society, is hemmed in by the police power, which
affects him even before he is born and follows him still after he is dead —
from the womb to beyond the tomb — in practically everything he does or
owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome
intrusion. Even so, as long as the activity or the property has some relevance
to the public welfare, its regulation under the police power is not only proper
but necessary. And the justification is found in the venerable Latin
maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non
laedas, which call for the subordination of individual interests to the benefit of
the greater number.
It is this power that is now invoked by the government to justify Executive
Order No. 626-A, amending the basic rule in Executive Order No. 626,
prohibiting the slaughter of carabaos except under certain conditions. The
original measure was issued for the reason, as expressed in one of its
Whereases, that "present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small farmers who rely on them
for energy needs." We affirm at the outset the need for such a measure. In
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 36
the face of the worsening energy crisis and the increased dependence of our
farms on these traditional beasts of burden, the government would have
been remiss, indeed, if it had not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a
law regulating the registration, branding and slaughter of large cattle was
claimed to be a deprivation of property without due process of law. The
defendant had been convicted thereunder for having slaughtered his own
carabao without the required permit, and he appealed to the Supreme Court.
The conviction was affirmed. The law was sustained as a valid police
measure to prevent the indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken many of these animals
and the reduction of their number had resulted in an acute decline in
agricultural output, which in turn had caused an incipient famine.
Furthermore, because of the scarcity of the animals and the consequent
increase in their price, cattle-rustling had spread alarmingly, necessitating
more effective measures for the registration and branding of these animals.
The Court held that the questioned statute was a valid exercise of the police
power and declared in part as follows:
To justify the State in thus interposing its authority in behalf
of the public, it must appear, first, that the interests of the
public generally, as distinguished from those of a particular
class, require such interference; and second, that the means
are reasonably necessary for the accomplishment of the
purpose, and not unduly oppressive upon individuals. ...
From what has been said, we think it is clear that the
enactment of the provisions of the statute under
consideration was required by "the interests of the public
generally, as distinguished from those of a particular class"
and that the prohibition of the slaughter of carabaos for
human consumption, so long as these animals are fit for
agricultural work or draft purposes was a "reasonably
necessary" limitation on private ownership, to protect the
community from the loss of the services of such animals by
their slaughter by improvident owners, tempted either by
greed of momentary gain, or by a desire to enjoy the luxury
of animal food, even when by so doing the productive power
of the community may be measurably and dangerously
affected.

In the light of the tests mentioned above, we hold with the Toribio Case that
the carabao, as the poor man's tractor, so to speak, has a direct relevance to
the public welfare and so is a lawful subject of Executive Order No. 626. The
method chosen in the basic measure is also reasonably necessary for the
purpose sought to be achieved and not unduly oppressive upon individuals,
again following the above-cited doctrine. There is no doubt that by banning
the slaughter of these animals except where they are at least seven years
old if male and eleven years old if female upon issuance of the necessary
permit, the executive order will be conserving those still fit for farm work or
breeding and preventing their improvident depletion.
But while conceding that the amendatory measure has the same lawful
subject as the original executive order, we cannot say with equal certainty
that it complies with the second requirement, viz., that there be a lawful
method. We note that to strengthen the original measure, Executive Order
No. 626-A imposes an absolute ban not on the slaughter of the carabaos but
on their movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be transported from
one province to another." The object of the prohibition escapes us. The
reasonable connection between the means employed and the purpose
sought to be achieved by the questioned measure is missing
We do not see how the prohibition of the inter-provincial transport of
carabaos can prevent their indiscriminate slaughter, considering that they
can be killed anywhere, with no less difficulty in one province than in another.
Obviously, retaining the carabaos in one province will not prevent their
slaughter there, any more than moving them to another province will make it
easier to kill them there. As for the carabeef, the prohibition is made to apply
to it as otherwise, so says executive order, it could be easily circumvented by
simply killing the animal. Perhaps so. However, if the movement of the live
animals for the purpose of preventing their slaughter cannot be prohibited, it
should follow that there is no reason either to prohibit their transfer as, not to
be flippant dead meat.
Even if a reasonable relation between the means and the end were to be
assumed, we would still have to reckon with the sanction that the measure
applies for violation of the prohibition. The penalty is outright confiscation of
the carabao or carabeef being transported, to be meted out by the executive
authorities, usually the police only. In the Toribio Case, the statute was
sustained because the penalty prescribed was fine and imprisonment, to be
imposed by the court after trial and conviction of the accused. Under the
challenged measure, significantly, no such trial is prescribed, and the
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 37
property being transported is immediately impounded by the police and
declared, by the measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police
station commander, were returned to the petitioner only after he had filed a
complaint for recovery and given a supersedeas bond of P12,000.00, which
was ordered confiscated upon his failure to produce the carabaos when
ordered by the trial court. The executive order defined the prohibition,
convicted the petitioner and immediately imposed punishment, which was
carried out forthright. The measure struck at once and pounced upon the
petitioner without giving him a chance to be heard, thus denying him the
centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and
hearing may be validly dispensed with notwithstanding the usual requirement
for these minimum guarantees of due process. It is also conceded that
summary action may be validly taken in administrative proceedings as
procedural due process is not necessarily judicial only. 20 In the exceptional
cases accepted, however. there is a justification for the omission of the right
to a previous hearing, to wit, the immediacy of the problem sought to be
corrected and the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling for
the petitioner's peremptory treatment. The properties involved were not even
inimical per se as to require their instant destruction. There certainly was no
reason why the offense prohibited by the executive order should not have
been proved first in a court of justice, with the accused being accorded all the
rights safeguarded to him under the Constitution. Considering that, as we
held in Pesigan v. Angeles, 21 Executive Order No. 626-A is penal in nature,
the violation thereof should have been pronounced not by the police only but
by a court of justice, which alone would have had the authority to impose the
prescribed penalty, and only after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the disposition of
the confiscated property as prescribed in the questioned executive order. It is
there authorized that the seized property shall "be distributed to charitable
institutions and other similar institutions as the Chairman of the National
Meat Inspection Commission may see fit, in the case of carabeef, and to
deserving farmers through dispersal as the Director of Animal Industry may
see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see
fit" is an extremely generous and dangerous condition, if condition it is. It is
laden with perilous opportunities for partiality and abuse, and even
corruption. One searches in vain for the usual standard and the reasonable
 A d m i n i s t r a t i v e L a w N o . 2 P a g e | 38

guidelines, or better still, the limitations that the said officers must observe
when they make their distribution. There is none. Their options are
apparently boundless. Who shall be the fortunate beneficiaries of their
generosity and by what criteria shall they be chosen? Only the officers
named can supply the answer, they and they alone may choose the grantee
as they see fit, and in their own exclusive discretion. Definitely, there is here
a "roving commission," a wide and sweeping authority that is not "canalized
within banks that keep it from overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of
the police power because the method employed to conserve the carabaos is
not reasonably necessary to the purpose of the law and, worse, is unduly
oppressive. Due process is violated because the owner of the property
confiscated is denied the right to be heard in his defense and is immediately
condemned and punished. The conferment on the administrative authorities
of the power to adjudge the guilt of the supposed offender is a clear
encroachment on judicial functions and militates against the doctrine of
separation of powers. There is, finally, also an invalid delegation of legislative
powers to the officers mentioned therein who are granted unlimited discretion
in the distribution of the properties arbitrarily taken. For these reasons, we
hereby declare Executive Order No. 626-A unconstitutional.
The strength of democracy lies not in the rights it guarantees but in the
courage of the people to invoke them whenever they are ignored or violated.
Rights are but weapons on the wall if, like expensive tapestry, all they do is
embellish and impress. Rights, as weapons, must be a promise of protection.
They become truly meaningful, and fulfill the role assigned to them in the free
society, if they are kept bright and sharp with use by those who are not afraid
to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared
unconstitutional. Except as affirmed above, the decision of the Court of
Appeals is reversed. The supersedeas bond is cancelled and the amount
thereof is ordered restored to the petitioner. No costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco,
Padilla Bidin Sarmiento and Cortes, JJ., concur.
Melencio-Herrera and Feliciano, JJ., are on leave.

We agree with the respondent court, however, that the police station
commander who confiscated the petitioner's carabaos is not liable in
damages for enforcing the executive order in accordance with its mandate.
The law was at that time presumptively valid, and it was his obligation, as a
member of the police, to enforce it. It would have been impertinent of him,
being a mere subordinate of the President, to declare the executive order
unconstitutional and, on his own responsibility alone, refuse to execute it.
Even the trial court, in fact, and the Court of Appeals itself did not feel they
had the competence, for all their superior authority, to question the order we
now annul.

The Court notes that if the petitioner had not seen fit to assert and protect his
rights as he saw them, this case would never have reached us and the taking
of his property under the challenged measure would have become
a fait accompli despite its invalidity. We commend him for his spirit. Without
the present challenge, the matter would have ended in that pump boat in
Masbate and another violation of the Constitution, for all its obviousness,
would have been perpetrated, allowed without protest, and soon forgotten in
the limbo of relinquished rights.

No. L-23825. December 24, 1965.
EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL,
respondent.
Administrative law; Power of President to create municipalities.—Since
January 1, 1960, when Republic Act No. 2370 became effective, barrios may
"not be created or their boundaries altered nor their names changed" except
by Act of Congress or of the corresponding" provincial board "upon petition of
a majority of the voters in the areas affected" and the "recommendation of
the council of the municipality or municipalities in which the proposed barrio
is situated." This statutory denial of the presidential authority to create a new
barrio implies a negation of the bigger power to create municipalities, each of
which consists of several barrios.
Same; Same; Nature of power to create municipalities.—Whereas the power
to f ix a common boundary, in order to avoid or settle conflicts of jurisdiction
between adjoining municipalities, may partake of an administrative nature—
involving, as it does, the adoption of means and ways to carry into effect the
law creating" said municipalities—the authority to create municipal
corporations is essentially legislative in nature,
Same; Same; Same; Requisites for valid delegation of power.—Although
Congress may delegate to another branch of the government the power to fill
in the details in the execution, enforcement or administration of a law, it is
essential that said law: (a) be complete in itself, setting forth therein the
policy to be executed, carried out or implemented by the delegate; and (b) fix
a standard—the limits of which are sufficiently determinate or determinable—
to which the delegate must conform in the performance of his functions.
Same; Same; Same; Same; Requirements of due delegation of power not
met by Section 68 of Revised Administrative Code.—Section 68 of the
Revised Administrative Code, insofar as it grants to the President the power
to create municipalities, does not meet the well-settled requirements for a
valid delegation of the power to fix the details in the enforcement of a law. It
does not enunciate any policy to be carried out or implemented by the
President.
Same; Same; Same; Same; Same; Abdication of powers of Congress in
favor of the Executive.—If the validity of said delegation of powers, made in
Section 68 of the Revised Administrative Code, were upheld. there would no
longer be any legal impediment to a statutory grant of authority to the
President to do anything which, in his opinion, may be required by public
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 39
welfare or public interest. Such grant of authority would be a virtual
abdication of the powers of Congress in favor of the Executive, and would
bring about a total collapse of the democratic system established by the
Constitution.
Same; Same; Same; Nature of powers dealt with in Section 68 of the
Revised Administrative Code.—It is true that in Calalang vs. WiIliams (70
Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld
"public welfare" and "public interest," respectively, as sufficient standards for
a valid delegation of the authority to execute the law. But the doctrine laid
down in these cases must be construed in relation to the specific facts and
Issues involved therein, outside of which they do not constitute precedents
and have no binding effect. Both cases involved grants to administrative
officers of powers related to the exercise of their administrative functions,
calling for the determination of questions of fact. Such is not the nature of the
powers dealt with in Section 68 of the Revised Administrative Code. The
creation of municipalities being essentially and eminently legislative in
character, the question whether or not "public interest" demands the exercise
of such power is not one of fact It is purely a legislative question (Carolina-
Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-
313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349).
Same; Same; Same; Same; Proof that issuance of Executive Orders in
question enteils exercise of purely legislative functions.—The fact that
Executive Orders Nos. 93 to 121, 124 and 128 to 129, creating thirty-three
municipalities, were issued after the legislative bills for the creation of the
said municipalities had failed to pass Congress, is the best proof that their
issuance entails the exercise of purely legislative functions.
Same; Same; Same; Power of control over local governments.—The power
of control under Section 10 (a) of Article X of the Constitution implies the right
of the President to interfere in the exercise of such discretion as may be
vested by law in the officers of the executive departments, bureaus or offices
of the national government, as well as to act in lieu of such officers. This
power is denied by the Constitution to the Executive, insofar as local
governments are concerned. With respect to the latter, the fundamental law
permits him to wield no more authority than that of checking whether said
local governments or the officers thereof perform their duties as provided by
statutory enactments. Hence, the President cannot interfere with local
governments, so long as the same or its officers act within the scope of their
authority. He may not, for instance, suspend an elective official of a regular
municipality or take any disciplinary action against him, 'except on appeal

from a decision of the corresponding provincial board. If, on the other hand,
the President could create a municipality, he could, in effect, remove any of'
its officials, by creating a new municipality and including therein the barrio in
which the official concerned resides, for his office would thereby become
vacant (Section 2179, Revised Administrative Code). Thus, by merely
brandishing the power to create a new municipality, without actually creating
it, he could compel local officials to submit to his dictation; thereby, in effect,
exercising over them the power of control denied to him by the Constitution.
Same; Same; Same; Same; Section 68, Revised Administrative Code
repealed by the Constitution.—The power of control of the President over
executive departments, bureaus or offices under Section 10(a) of Article X of
the Constitution implies no more than the authority to assume directly the
functions thereof or to interfere in the exercise of discretion by its officials.
Manifestly, such control does not include the authority either to abolish an
executive department or bureau, or to create a new one. As a consequence,
the alleged power of the President to create municipal corporations would
necessarily connote the 'exercise by him of an authority even greater than
that of control which he has over the executive departments, bureaus or
offices, Instead of giving the President less power over local governments
than that vested in him over the executive departments, bureaus or offices, it
reverses the process and does the exact opposite, by conferring upon him
more power over municipal corporations than that which he has over
executive departments, bureaus or offices. Even if, therefore, it did not entail
an undue delegation of legislative powers, as it certainly does, said Section
68, as part of the Revised Administrative Code, approved on March 10,
1967, must be deemed repealed by the subsequent adoption of the
Constitution in 1935, which is utterly incompatible and inconsistent with said
statutory enactment. (De los Santos vs. Mallare, 87 Phil. 289, 298299.)
Same; Same; Same; Municipal officials concerned duly represented in
present case.—lt is contended that not all the proper parties have been
impleaded in the present case. Suffice it to say that the records do not show,
and the parties do not claim, that the officers of any of the municipalities
concerned have been appointed or elected and have assumed office. At any
rate, the Solicitor General, who has appeared on behalf of respondent
Auditor General, is the officer authorized by law "to act and represent the
Government of the Philippines, its offices and agents, in any official
investigation, proceeding or matter requiring the services of a lawyer"
(Section 1661, Revised Administrative Code), and, in connection with the
creation of the municipalities involved in this case, which involves a political,
not proprietary function. said local officials, if any, are mere agents or
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 40
representatives of the national government. Their interest in the case has
accordingly been duly represented. (Mangubat vs. Osmeña, Jr., G.R. No. L-
12837, April 30, 1959; City of Cebu vs. Judge Piccio, G.R. Nos L-13012 &
14876. December 81, 1960.)
Same; Same; Action not premature.—The present action cannot be said to
be premature simply because respondent Auditor General has not yet acted
on any of the executive orders in question and has not intimated how he
would act in connection therewith. It is a matter of common knowledge that
the President has for many years issued executive orders creating municipal
corporations and that the same have been organized and are in actual
operation, thus indicating without peradventure or doubt, that the
expenditures incidental thereto have been sanctioned, approved or passed in
audit by the General Auditing Office and its officials. There is no reason to
believe that respondent would adopt a different policy as regards the new
municipalities involved in this case, in the absence of an allegation to such
effect, and none has been made by him.
ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary
injunction.
The facts are stated in the opinion of the Court.
Zulueta, Gonzales, Paculdo & Associates for petitioner.
Solicitor General for respondent.
CONCEPCION, J.:
During the period from September 4 to October 29, 1964 the President of the
Philippines, purporting to act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126
to 129; creating thirty-three (33) municipalities enumerated in the
margin.1 Soon after the date last mentioned, or on November 10, 1964
petitioner Emmanuel Pelaez, as Vice President of the Philippines and as
taxpayer, instituted the present special civil action, for a writ of prohibition
with preliminary injunction, against the Auditor General, to restrain him, as
well as his representatives and agents, from passing in audit any expenditure
of public funds in implementation of said executive orders and/or any
disbursement by said municipalities.
Petitioner alleges that said executive orders are null and void, upon the
ground that said Section 68 has been impliedly repealed by Republic Act No.

2370 and constitutes an undue delegation of legislative power. Respondent
maintains the contrary view and avers that the present action is premature
and that not all proper parties — referring to the officials of the new political
subdivisions in question — have been impleaded. Subsequently, the mayors
of several municipalities adversely affected by the aforementioned executive
orders — because the latter have taken away from the former the barrios
composing the new political subdivisions — intervened in the case.
Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando
were allowed to and did appear as amici curiae.
The third paragraph of Section 3 of Republic Act No. 2370, reads:
Barrios shall not be created or their boundaries altered nor their
names changed except under the provisions of this Act or by Act of
Congress.
Pursuant to the first two (2) paragraphs of the same Section 3:
All barrios existing at the time of the passage of this Act shall come
under the provisions hereof.
Upon petition of a majority of the voters in the areas affected, a new
barrio may be created or the name of an existing one may be
changed by the provincial board of the province, upon
recommendation of the council of the municipality or municipalities in
which the proposed barrio is stipulated. The recommendation of the
municipal council shall be embodied in a resolution approved by at
least two-thirds of the entire membership of the said council:
Provided, however, That no new barrio may be created if its
population is less than five hundred persons.
Hence, since January 1, 1960, when Republic Act No. 2370 became
effective, barrios may "not be created or their boundaries altered nor their
names changed" except by Act of Congress or of the corresponding
provincial board "upon petition of a majority of the voters in the areas
affected" and the "recommendation of the council of the municipality or
municipalities in which the proposed barrio is situated." Petitioner argues,
accordingly: "If the President, under this new law, cannot even create a
barrio, can he create a municipality which is composed of several barrios,
since barrios are units of municipalities?"
Respondent answers in the affirmative, upon the theory that a new
municipality can be created without creating new barrios, such as, by placing
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 41
old barrios under the jurisdiction of the new municipality. This theory
overlooks, however, the main import of the petitioner's argument, which is
that the statutory denial of the presidential authority to create a new barrio
implies a negation of the bigger power to create municipalities, each of which
consists of several barrios. The cogency and force of this argument is too
obvious to be denied or even questioned. Founded upon logic and
experience, it cannot be offset except by a clear manifestation of the intent of
Congress to the contrary, and no such manifestation, subsequent to the
passage of Republic Act No. 2379, has been brought to our attention.
Moreover, section 68 of the Revised Administrative Code, upon which the
disputed executive orders are based, provides:
The (Governor-General) President of the Philippines may by
executive order define the boundary, or boundaries, of any province,
subprovince, municipality, [township] municipal district, or other
political subdivision, and increase or diminish the territory comprised
therein, may divide any province into one or more subprovinces,
separate any political division other than a province, into such
portions as may be required, merge any of such subdivisions or
portions with another, name any new subdivision so created, and
may change the seat of government within any subdivision to such
place therein as the public welfare may require: Provided, That the
authorization of the (Philippine Legislature) Congress of the
Philippines shall first be obtained whenever the boundary of any
province or subprovince is to be defined or any province is to be
divided into one or more subprovinces. When action by the
(Governor-General) President of the Philippines in accordance
herewith makes necessary a change of the territory under the
jurisdiction of any administrative officer or any judicial officer, the
(Governor-General) President of the Philippines, with the
recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the
several officers affected and assign such officers to the new districts
so formed.
Upon the changing of the limits of political divisions in pursuance of
the foregoing authority, an equitable distribution of the funds and
obligations of the divisions thereby affected shall be made in such
manner as may be recommended by the (Insular Auditor) Auditor
General and approved by the (Governor-General) President of the
Philippines.

Respondent alleges that the power of the President to create municipalities
under this section does not amount to an undue delegation of legislative
power, relying upon Municipality of Cardona vs. Municipality of
Binañgonan (36 Phil. 547), which, he claims, has settled it. Such claim is
untenable, for said case involved, not the creation of a new municipality, but
a mere transfer of territory — from an already existing municipality (Cardona)
to another municipality (Binañgonan), likewise, existing at the time of and
prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona vs.
Municipality, of Binañgonan [34 Phil. 518, 519-5201) — in consequence of
the fixing and definition, pursuant to Act No. 1748, of the common
boundaries of two municipalities.
It is obvious, however, that, whereas the power to fix such common
boundary, in order to avoid or settle conflicts of jurisdiction between adjoining
municipalities, may partake of an administrative nature — involving, as it
does, the adoption of means and ways to carry into effect the law creating
said municipalities — the authority to create municipal corporations is
essentially legislative in nature. In the language of other courts, it is "strictly a
legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2,
1959) or "solely and exclusively the exercise of legislative power" (Udall vs.
Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of
Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890,
23 Pac. 405, 409), "municipal corporations are purely the creatures of
statutes."
Although1a Congress may delegate to another branch of the Government the
power to fill in the details in the execution, enforcement or administration of a
law, it is essential, to forestall a violation of the principle of separation of
powers, that said law: (a) be complete in itself — it must set forth therein the
policy to be executed, carried out or implemented by the delegate2 — and (b)
fix a standard — the limits of which are sufficiently determinate or
determinable — to which the delegate must conform in the performance of
his functions.2a Indeed, without a statutory declaration of policy, the delegate
would in effect, make or formulate such policy, which is the essence of every
law; and, without the aforementioned standard, there would be no means to
determine, with reasonable certainty, whether the delegate has acted within
or beyond the scope of his authority.2b Hence, he could thereby arrogate
upon himself the power, not only to make the law, but, also — and this is
worse — to unmake it, by adopting measures inconsistent with the end
sought to be attained by the Act of Congress, thus nullifying the principle of
separation of powers and the system of checks and balances, and,
consequently, undermining the very foundation of our Republican system.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 42
Section 68 of the Revised Administrative Code does not meet these well
settled requirements for a valid delegation of the power to fix the details in
the enforcement of a law. It does not enunciate any policy to be carried out or
implemented by the President. Neither does it give a standard sufficiently
precise to avoid the evil effects above referred to. In this connection, we do
not overlook the fact that, under the last clause of the first sentence of
Section 68, the President:
... may change the seat of the government within any subdivision to
such place therein as the public welfare may require.
It is apparent, however, from the language of this clause, that the phrase "as
the public welfare may require" qualified, not the clauses preceding the one
just quoted, but only the place to which the seat of the government may be
transferred. This fact becomes more apparent when we consider that said
Section 68 was originally Section 1 of Act No. 1748,3 which provided that,
"whenever in the judgment of the Governor-General the public
welfare requires, he may, by executive order," effect the changes
enumerated therein (as in said section 68), including the change of the seat
of the government "to such place ... as the public interest requires." The
opening statement of said Section 1 of Act No. 1748 — which was not
included in Section 68 of the Revised Administrative Code — governed the
time at which, or the conditions under which, the powers therein conferred
could be exercised; whereas the last part of the first sentence of said section
referred exclusively to the place to which the seat of the government was to
be transferred.
At any rate, the conclusion would be the same, insofar as the case at bar is
concerned, even if we assumed that the phrase "as the public welfare may
require," in said Section 68, qualifies all other clauses thereof. It is true that
in Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil.
328), this Court had upheld "public welfare" and "public interest,"
respectively, as sufficient standards for a valid delegation of the authority to
execute the law. But, the doctrine laid down in these cases — as all judicial
pronouncements — must be construed in relation to the specific facts and
issues involved therein, outside of which they do not constitute precedents
and have no binding effect.4 The law construed in the Calalang case
conferred upon the Director of Public Works, with the approval of the
Secretary of Public Works and Communications, the power to issue rules
and regulations to promote safe transit upon national roads and streets.
Upon the other hand, the Rosenthal case referred to the authority of the
Insular Treasurer, under Act No. 2581, to issue and cancel certificates or
permits for the sale of speculative securities. Both cases involved grants

to administrative officers of powers related to the exercise of their
administrative functions, calling for the determination of questions of fact.
Such is not the nature of the powers dealt with in section 68. As above
indicated, the creation of municipalities, is not an administrative function, but
one which is essentially and eminently legislative in character. The question
of whether or not "public interest" demands the exercise of such power
is not one of fact. it is "purely a legislative question "(Carolina-Virginia
Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-
318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349). As the
Supreme Court of Wisconsin has aptly characterized it, "the question as to
whether incorporation is for the best interest of the community in any case is
emphatically a question of public policy and statecraft" (In re Village of North
Milwaukee, 67 N.W. 1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting undue
delegation of legislative powers, state laws granting the judicial department,
the power to determine whether certain territories should be annexed to a
particular municipality (Udall vs. Severn, supra, 258-359); or vesting in a
Commission the right to determine the plan and frame of government of
proposed villages and what functions shall be exercised by the same,
although the powers and functions of the village are specifically limited by
statute (In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts
the authority to declare a given town or village incorporated, and designate
its metes and bounds, upon petition of a majority of the taxable inhabitants
thereof, setting forth the area desired to be included in such village (Territory
ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the territory of a
town, containing a given area and population, to be incorporated as a town,
on certain steps being taken by the inhabitants thereof and on certain
determination by a court and subsequent vote of the inhabitants in favor
thereof, insofar as the court is allowed to determine whether the lands
embraced in the petition "ought justly" to be included in the village, and
whether the interest of the inhabitants will be promoted by such
incorporation, and to enlarge and diminish the boundaries of the proposed
village "as justice may require" (In re Villages of North Milwaukee, 67 N.W.
1035-1037); or creating a Municipal Board of Control which shall determine
whether or not the laying out, construction or operation of a toll road is in the
"public interest" and whether the requirements of the law had been complied
with, in which case the board shall enter an order creating a municipal
corporation and fixing the name of the same (Carolina-Virginia Coastal
Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310).
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 43
Insofar as the validity of a delegation of power by Congress to the President
is concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed.
1570) is quite relevant to the one at bar. The Schechter case involved the
constitutionality of Section 3 of the National Industrial Recovery Act
authorizing the President of the United States to approve "codes of fair
competition" submitted to him by one or more trade or industrial associations
or corporations which "impose no inequitable restrictions on admission to
membership therein and are truly representative," provided that such codes
are not designed "to promote monopolies or to eliminate or oppress small
enterprises and will not operate to discriminate against them, and will tend to
effectuate the policy" of said Act. The Federal Supreme Court held:
To summarize and conclude upon this point: Sec. 3 of the Recovery
Act is without precedent. It supplies no standards for any trade,
industry or activity. It does not undertake to prescribe rules of
conduct to be applied to particular states of fact determined by
appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For
that legislative undertaking, Sec. 3 sets up no standards, aside from
the statement of the general aims of rehabilitation, correction and
expansion described in Sec. 1. In view of the scope of that broad
declaration, and of the nature of the few restrictions that are
imposed, the discretion of the President in approving or prescribing
codes, and thus enacting laws for the government of trade and
industry throughout the country, is virtually unfettered. We think that
the code making authority thus conferred is an unconstitutional
delegation of legislative power.
If the term "unfair competition" is so broad as to vest in the President a
discretion that is "virtually unfettered." and, consequently, tantamount to a
delegation of legislative power, it is obvious that "public welfare," which has
even a broader connotation, leads to the same result. In fact, if the validity of
the delegation of powers made in Section 68 were upheld, there would no
longer be any legal impediment to a statutory grant of authority to the
President to do anything which, in his opinion, may be required by public
welfare or public interest. Such grant of authority would be a virtual
abdication of the powers of Congress in favor of the Executive, and would
bring about a total collapse of the democratic system established by our
Constitution, which it is the special duty and privilege of this Court to uphold.
It may not be amiss to note that the executive orders in question were issued
after the legislative bills for the creation of the municipalities involved in this
case had failed to pass Congress. A better proof of the fact that the issuance

of said executive orders entails the exercise of purely legislative functions
can hardly be given.
Again, Section 10 (1) of Article VII of our fundamental law ordains:
The President shall have control of all the executive departments,
bureaus, or offices, exercise general supervision over all local
governments as may be provided by law, and take care that the laws
be faithfully executed.
The power of control under this provision implies the right of the President to
interfere in the exercise of such discretion as may be vested by law in the
officers of the executive departments, bureaus, or offices of the national
government, as well as to act in lieu of such officers. This power is denied by
the Constitution to the Executive, insofar as local governments are
concerned. With respect to the latter, the fundamental law permits him to
wield no more authority than that of checking whether said local governments
or the officers thereof perform their duties as provided by statutory
enactments. Hence, the President cannot interfere with local governments,
so long as the same or its officers act Within the scope of their authority. He
may not enact an ordinance which the municipal council has failed or refused
to pass, even if it had thereby violated a duty imposed thereto by law,
although he may see to it that the corresponding provincial officials take
appropriate disciplinary action therefor. Neither may he vote, set aside or
annul an ordinance passed by said council within the scope of its jurisdiction,
no matter how patently unwise it may be. He may not even suspend an
elective official of a regular municipality or take any disciplinary action
against him, except on appeal from a decision of the corresponding
provincial board.5
Upon the other hand if the President could create a municipality, he could, in
effect, remove any of its officials, by creating a new municipality and
including therein the barrio in which the official concerned resides, for his
office would thereby become vacant.6 Thus, by merely brandishing the power
to create a new municipality (if he had it), without actually creating it, he
could compel local officials to submit to his dictation, thereby, in effect,
exercising over them the power of control denied to him by the Constitution.
Then, also, the power of control of the President over executive departments,
bureaus or offices implies no more than the authority to assume directly the
functions thereof or to interfere in the exercise of discretion by its officials.
Manifestly, such control does not include the authority either to abolish an
executive department or bureau, or to create a new one. As a consequence,
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 44
the alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than
that of control which he has over the executive departments, bureaus or
offices. In other words, Section 68 of the Revised Administrative Code does
not merely fail to comply with the constitutional mandate above quoted.
Instead of giving the President less power over local governments than that
vested in him over the executive departments, bureaus or offices, it reverses
the process and does the exact opposite, by conferring upon
him more power over municipal corporations than that which he has over
said executive departments, bureaus or offices.
In short, even if it did entail an undue delegation of legislative powers, as it
certainly does, said Section 68, as part of the Revised Administrative Code,
approved on March 10, 1917, must be deemed repealed by the subsequent
adoption of the Constitution, in 1935, which is utterly incompatible and
inconsistent with said statutory enactment.7
There are only two (2) other points left for consideration, namely,
respondent's claim (a) that "not all the proper parties" — referring to the
officers of the newly created municipalities — "have been impleaded in this
case," and (b) that "the present petition is premature."
As regards the first point, suffice it to say that the records do not show, and
the parties do not claim, that the officers of any of said municipalities have
been appointed or elected and assumed office. At any rate, the Solicitor
General, who has appeared on behalf of respondent Auditor General, is the
officer authorized by law "to act and represent the Government of the
Philippines, its offices and agents, in any official investigation, proceeding or
matter requiring the services of a lawyer" (Section 1661, Revised
Administrative Code), and, in connection with the creation of the
aforementioned municipalities, which involves a political, not proprietary,
function, said local officials, if any, are mere agents or representatives of the
national government. Their interest in the case at bar has, accordingly, been,
in effect, duly represented.8
With respect to the second point, respondent alleges that he has not as yet
acted on any of the executive order & in question and has not intimated how
he would act in connection therewith. It is, however, a matter of common,
public knowledge, subject to judicial cognizance, that the President has, for
many years, issued executive orders creating municipal corporations and
that the same have been organized and in actual operation, thus indicating,
without peradventure of doubt, that the expenditures incidental thereto have
been sanctioned, approved or passed in audit by the General Auditing Office

and its officials. There is no reason to believe, therefore, that respondent
would adopt a different policy as regards the new municipalities involved in
this case, in the absence of an allegation to such effect, and none has been
made by him.
WHEREFORE, the Executive Orders in question are hereby declared null
and void ab initio and the respondent permanently restrained from passing in
audit any expenditure of public funds in implementation of said Executive
Orders or any disbursement by the municipalities above referred to. It is so
ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon,
JJ., concur.
Zaldivar, J., took no part.
Separate Opinions
BENGZON, J.P., J., concurring and dissenting:
A sign of progress in a developing nation is the rise of new municipalities.
Fostering their rapid growth has long been the aim pursued by all three
branches of our Government.
So it was that the Governor-General during the time of the Jones Law was
given authority by the Legislature (Act No. 1748) to act upon certain details
with respect to said local governments, such as fixing of boundaries,
subdivisions and mergers. And the Supreme Court, within the framework of
the Jones Law, ruled in 1917 that the execution or implementation of such
details, did not entail abdication of legislative power (Government vs.
Municipality of Binañgonan, 34 Phil. 518; Municipality of Cardona vs.
Municipality of Binañgonan, 36 Phil. 547). Subsequently, Act No. 1748's
aforesaid statutory authorization was embodied in Section 68 of the Revised
Administrative Code. And Chief Executives since then up to the present
continued to avail of said provision, time and again invoking it to issue
executive orders providing for the creation of municipalities.
From September 4, 1964 to October 29, 1964 the President of the
Philippines issued executive orders to create thirty-three municipalities
pursuant to Section 68 of the Revised Administrative Code. Public funds
thereby stood to be disbursed in implementation of said executive orders.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 45
Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed
in this Court a petition for prohibition with preliminary injunction against the
Auditor General. It seeks to restrain the respondent or any person acting in
his behalf, from passing in audit any expenditure of public funds in
implementation of the executive orders aforementioned.
Petitioner contends that the President has no power to create a municipality
by executive order. It is argued that Section 68 of the Revised Administrative
Code of 1917, so far as it purports to grant any such power, is invalid or, at
the least, already repealed, in light of the Philippine Constitution and
Republic Act 2370 (The Barrio Charter).
Section 68 is again reproduced hereunder for convenience:
SEC. 68. General authority of [Governor-General) President of the
Philippines to fix boundaries and make new subdivisions. — The
[Governor-General] President of the Philippines may by executive
order define the boundary, or boundaries, of any province,
subprovince, municipality, [township] municipal district, or other
political subdivision, and increase or diminish the territory comprised
therein, may divide any province into one or more subprovinces,
separate any political division other than a province, into such
portions as may be required, merge any of such subdivisions or
portions with another, name any new subdivision so created, and
may change the seat of government within any subdivision to such
place therein as the public welfare may require: Provided, That the
authorization of the [Philippine Legislature] Congress of the
Philippines shall first be obtained whenever the boundary of any
province or subprovince is to be defined or any province is to be
divided into one or more subprovinces. When action by the
[Governor-General] President of the Philippines in accordance
herewith makes necessary a change of the territory under the
jurisdiction of any administrative officer or any judicial officer, the
[Governor-General] President of the Philippines, with the
recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the
several officers to the new districts so formed.
Upon the changing of the limits of political divisions in pursuance of
the foregoing authority, an equitable distribution of the funds and
obligations of the divisions thereby affected shall be made in such
manner as may be recommended by the [Insular Auditor] Auditor

General and approved by the [Governor-General] President of the
Philippines.
From such working I believe that power to create a municipality is included:
to "separate any political division other than a province, into such portions as
may be required, merge any such subdivisions or portions with another,
name any new subdivision so created." The issue, however, is whether the
legislature can validly delegate to the Executive such power.
The power to create a municipality is legislative in character. American
authorities have therefore favored the view that it cannot be delegated; that
what is delegable is not the power to create municipalities but only the power
to determine the existence of facts under which creation of a municipality will
result (37 Am. Jur. 628).
The test is said to lie in whether the statute allows any discretion on the
delegate as to whether the municipal corporation should be created. If so,
there is an attempted delegation of legislative power and the statute is invalid
(Ibid.). Now Section 68 no doubt gives the President such discretion, since it
says that the President "may by executive order" exercise the powers therein
granted. Furthermore, Section 5 of the same Code states:
SEC. 5. Exercise of administrative discretion — The exercise of the
permissive powers of all executive or administrative officers and
bodies is based upon discretion, and when such officer or body is
given authority to do any act but not required to do such act, the
doing of the same shall be dependent on a sound discretion to be
exercised for the good of the service and benefit of the public,
whether so expressed in the statute giving the authority or not.
Under the prevailing rule in the United States — and Section 68 is of
American origin — the provision in question would be an invalid attempt to
delegate purely legislative powers, contrary to the principle of separation of
powers.
It is very pertinent that Section 68 should be considered with the stream of
history in mind. A proper knowledge of the past is the only adequate
background for the present. Section 68 was adopted half a century ago.
Political change, two world wars, the recognition of our independence and
rightful place in the family of nations, have since taken place. In 1917 the
Philippines had for its Organic Act the Jones Law. And under the setup
ordained therein no strict separation of powers was adhered to.
A d m i n i s t r a t i v e L a w N o . 2 P a g e | 46
Consequently, Section 68 was not constitutionally objectionable at the time of
its enactment.
The advent of the Philippine Constitution in 1935 however altered the
situation. For not only was separation of powers strictly ordained, except only
in specific instances therein provided, but the power of the Chief Executive
over local governments suffered an explicit reduction.
Formerly, Section 21 of the Jones Law provided that the Governor-General
"shall have general supervision and control of all the departments and
bureaus of the government in the Philippine Islands." Now Section 10 (1),
Article VII of the Philippine Constitution provides: "The President shall have
control of all the executive departments, bureaus, or offices, exercise general
supervision over all local governments as may be provided by law, and take
care that the laws be faithfully executed.
In short, the power of control over local governments had now been taken
away from the Chief Executive. Again, to fully understand the significance of
this provision, one must trace its development and growth.
As early as April 7, 1900 President McKinley of the United States, in his
Instructions to the Second Philippine Commission, laid down the policy that
our municipal governments should be "subject to the least degree of
supervision and control" on the part of the national government. Said
supervision and control was to be confined within the "narrowest limits" or so
much only as "may be necessary to secure and enforce faithful and efficient
administration by local officers." And the national government "shall have no
direct administration except of matters of purely general concern." (See
Hebron v. Reyes, L-9158, July 28, 1958.)
All this had one aim, to enable the Filipinos to acquire experience in the art of
self-government, with the end in view of later allowing them to assume
complete management and control of the administration of their local affairs.
Such aim is the policy now embodied in Section 10 (1), Article VII of the
Constitution (Rodriguez v. Montinola, 50 O.G. 4820).
It is the evident decree of the Constitution, therefore, that the President shall
have no power of control over local governments. Accordingly, Congress
cannot by law grant him such power (Hebron v. Reyes, supra). And any such
power formerly granted under the Jones Law thereby became unavoidably
inconsistent with the Philippine Constitution.
 A d m i n i s t r a t i v e L a w N o . 2 P a g e | 47

It remains to examine the relation of the power to create and the power to It is my view, therefore, that the Constitution, and not Republic Act 2370,
control local governments. Said relationship has already been passed upon repealed Section 68 of the Revised Administrative Code's provision giving
by this Court in Hebron v. Reyes, supra. In said case, it was ruled that the the President authority to create local governments. And for this reason I
power to control is an incident of the power to create or abolish agree with the ruling in the majority opinion that the executive orders in
municipalities. Respondent's view, therefore, that creating municipalities and question are null and void.
controlling their local governments are "two worlds apart," is untenable. And
since as stated, the power to control local governments can no longer be In thus ruling, the Court is but sustaining the fulfillment of our historic desire
conferred on or exercised by the President, it follows a fortiori that the power to be free and independent under a republican form of government, and
to create them, all the more cannot be so conferred or exercised. exercising a function derived from the very sovereignty that it upholds.
Executive orders declared null and void.
I am compelled to conclude, therefore, that Section 10 (1), Article VII of the
Constitution has repealed Section 68 of the Revised Administrative Code as Makalintal and Regala, JJ., concur.
far as the latter empowers the President to create local governments. Repeal
by the Constitution of prior statutes inconsistent with it has already been
sustained in De los Santos v. MaIlare, 87 Phil. 289. And it was there held that
such repeal differs from a declaration of unconstitutionality of a posterior
legislation, so much so that only a majority vote of the Court is needed to
sustain a finding of repeal.

Since the Constitution repealed Section 68 as far back as 1935, it is

academic to ask whether Republic Act 2370 likewise has provisions in
conflict with Section 68 so as to repeal it. Suffice it to state, at any rate, that
statutory prohibition on the President from creating a barrio does not, in my
opinion, warrant the inference of statutory prohibition for creating a
municipality. For although municipalities consist of barrios, there is nothing in
the statute that would preclude creation of new municipalities out of pre-
existing barrios.

It is not contrary to the logic of local autonomy to be able to create larger

political units and unable to create smaller ones. For as long ago observed in
President McKinley's Instructions to the Second Philippine Commission,
greater autonomy is to be imparted to the smaller of the two political units.
The smaller the unit of local government, the lesser is the need for the
national government's intervention in its political affairs. Furthermore, for
practical reasons, local autonomy cannot be given from the top downwards.
The national government, in such a case, could still exercise power over the
supposedly autonomous unit, e.g., municipalities, by exercising it over the
smaller units that comprise them, e.g., the barrios. A realistic program of
decentralization therefore calls for autonomy from the bottom upwards, so
that it is not surprising for Congress to deny the national government some
power over barrios without denying it over municipalities. For this reason, I
disagree with the majority view that because the President could not create a
barrio under Republic Act 2370, a fortiori he cannot create a municipality.