1 Pelaez v. Auditor General, 15 SCRA 569

2/15/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 015
VOL. 15, DECEMBER 24, 1965 569

Pelaez vs. Auditor General
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
570
570 SUPREME COURT REPORTS ANNOTATED
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.
central.com.ph/sfsreader/session/00000177a5562d1b88fdf4d0003600fb002c009e/t/?o=False 1/34
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
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
571
VOL. 15, DECEMBER 24, 1965 571
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
572
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 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.
573
VOL. 15, DECEMBER 24, 1965 573

CONCEPCION, J.:
During the period from September 4 to October 29, 1064 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 1
thirty-three (33)
municipalities enumerated in the margin. 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
_______________
Executive Municipality Province Date Annex (Original

Order No. Promulgated Petition)
93 Nilo Zamboanga del Sept. 4, A
Sur 1961
94 Midsalip """ """ B
95 Pitogo """ """ C
96 Maruing """ """ D
97 Naga """ """ E "
99 Sebaste Antique "26" F "
100 Molugan Misamis """ G "
Oriental
101 Malixi Surigao del Sur "28" H "
102 Roxas Davao """ I "
103 Magsaysay " """ J "
104 Sta, Maria " """ K "
105 Badiangan Iloilo """ L "
106 Mina " Oct. 1 " M "
107 Andong Lanao del Sur """ N "
108 Sultan """ """ O "
Alonto
109 Maguing """ """ P "
110 Dianaton """ """ Q "
111 Elpidio Mt. Province """ R "
Quirino
112 Bayog Zamboanga del """ S "
Sur
117 Gloria Oriental """ GG (Attached here
Mindoro to)
Executive Municipality Province Date Annex (Original
Order No. Promulgated Petition)
113 Maasin Cotabato """ T
114 Siayan Zamboanga del """ LC
Norte
115 Roxas """ """ V
116P Panganuran """ """ W
118 Kalilangan Bukidnon """ X
119 Lantapan " """ Y
120 Libertad Zamboanga del """ Z
Sur
121 General """ """ AA
Aguinaldo
124 Rizal Surigao del "3" BB
Norte
126 Tigao Surigao del Sur "23" CC
127 Tampakan Cotabato "26" DD
128 Maco Davao "29" EE
129 New Corella " """ FF
574

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 sway 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?"
575
VOL. 16, DECEMBER 24, 1965 575

Respondent answers in the affirmative, upon the theory that a new

municipality can be created without creating new barrios, such as,
by placing 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 se everal
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 Administrative Code, upon which the
disputed executive orders are based, provides:
"The (Governor-General) President of the Philippines may by executive

order define the or boundaries, of any province, subprovince, municipality,
[township] district, or other political subdivision, and increase or diminish
the territory comprised therein, may divide any province into one or more
subprovices, 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, 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
576

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 (86 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, 519-520])
—in consequence of the fixing and definition, pursuant to Act. No.
1748, of the common bound aries 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."
1a
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, to forestall a
violation of the principle of separation of -powers, that said law: (a)

be complete in itself
______________
1a Except to local governments, to which legislative powers, with respect to

matters of local concern, may be delegated.
577
VOL. 15, DECEMBER 24, 1965 577

—it must set forth therein the 2

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 2a
the
delegate must conform in the performance of his functions. 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 2bthe delegate
has acted within or beyond the scope of his authority. 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.
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,
_____________
2 Calalang vs. Williams, 70 Phil. 726; Pangasinan Transp. Co. vs. Public Service
Commission, 70 Phil. 221; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs. Collector of
Customs, 53 Phil. 394; Mulford vs. Smith, 307 U.S. 38.
2a People vs. Lim Ho, L- 12091-2, January 28, 1960; People vs. Jolliffe. L-9553,
May 13, 1959; People vs. Vera, 65 Phil. 56; U.S. vs. Ang Tang Ho, 43 Phil. 1;
Compañia General de Tabacos vs. Board of Public Utility, 34 Phil. 136; Mutual Film
Co. vs. Industrial Commission, 236 U.S. 247, 59 L. Ed. 561; Mutual Film Corp. vs.
Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana Refining Co. vs. Ryan,
293 U.S. 388, 79 L. Ed. 446; A.L.A. Schechter Poultry Corp. vs. U.S., 295 U.S. 495,
79 L Ed. 1570; U S. vs. Rock Royal Coop., 307 U.S. 533, 83 L. Ed. 1446; Bowles vs.
Willingham, 321 U.S. 503, 88 L. Ed. 892; Araneta vs. Gatmaitan, L-8895, April 30,
1957; Cervantes vs. Auditor General, L-4043, May 26,1952; Phil. Association of
Colleges vs. See. of Education, 51 Off. Gaz. 6230; People vs. Arnault, 48 Off. Gaz.
4805; Antamok Gold Fields vs. CIR, 68 Phil. 340; U.S. vs. Barrias, 11 Phil. 327;
Yakus vs. White, 321 U.S. 414; Ammann vs. Mailonce. 332 U.S. 245
2b Vigan Electric Light Company, Inc. vs. The Public Service Commission, L-
19850, January 30, 1964.
578

It does not enunciate any policy to be carried out or implemented by

the President Neither does it give a standard suf f iciently 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:
"x x x 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 3
that said Section 68 was originally
Section 1 of Act No. 1748, 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 x x x
_____________
3 Whenever in the judgment of the Governor-General the public welfare requires,

he may, by executive order, enlarge, contract, or otherwise change the boundary of
any province, subprovince, municipality or township or other political subdivision, or
separate any such subdivision into such portions as may be required as aforesaid,
merge any of such subdivisions or portions with another, divide any province into one
or more subprovinces as may be required as aforesaid, name any new subdivision so
created, change the seat of government within any subdivision, 'existing or created
hereunder, to such place therein as the public interests require, and shall fix in such
executive order the date when the change, merger, separation, or other action shall
take effect. Whenever such action as aforesaid creates a new political subdivision the
Governor-General shall appoint such officers for the new subdivision with such
powers and duties as may be required by the existing provisions of law applicable to
the case and fix their salaries; such appointees shall hold office until their successors
are elected or appointed and qualified. Successors to the elective offices shall be
elected at the next general election following such appointment, Such equitable
distribution of the funds of changed subdivisions between the subdivisions affected
shall be as is recommended by the Insular Auditor and approved by the Governor-

General.
579
VOL. 15, DECEMBER 24, 1965 579

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
4
they do not constitute
precedents and have no binding effect. 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 880 As
above indicated, the creation of municipalities,
_____________
4 McGirr vs. Hamilton, 30 Phil. 563; Hebron vs. Reyes, L-9124. July 28, 1958;
U.S. vs. More, 3 Cranch 159, 172; U.S. vs. Sanges, 144 U.S. 310, 319; Cross vs.
Burke, 146 U.S. 82; Louisville Trust Co. vs. Knott, 191 U.S. 225. See also, 15 C.J.,
929-940; 21 C.J.S. 297, 299; 14 Am. Jur. 345.
580

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, 28 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. 10351037); or creating a Municipal Board of
Control which shall 'determine whether or not the laying out,
construc-
581
VOL. 15, DECEMBER 24, 1965 581

tion 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).
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 competiton" 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 un constitutional 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
582

fact, if the validity of the delegation of powers made in Section 88

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.
583
VOL. 15, DECEMBER 24, 1965 583

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,
except5 on appeal from a decision of the corresponding provincial
board.
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 official6
concerned resides, for his office would thereby become vacant,
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 f unctions 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. In other words, Section 68 of the Revised Administrative
Code does not mere-
_____________
5 Hebron vs. Reyes, L-9124, July 28, 1958; Mondano vs. Silvosa, 51 Off. Gaz.
2884; Rodriguez vs. Montinola, 50 Off. Gaz, 4820; Querubin vs. Castro, L-9779, July
31, 1958.
6 Pursuant to Section 2179 of the Revised Administrative Code:
"When a part 01 a barrio is detached from a municipality to form a new municipality or to be

added to an existing municipality, any officer of the old municipality living in the detached
territory may continue to hold his office and exert the functions thereof for the remainder of his
term; but if he is resident of a barrio the whole of which is detached, his office shall be deemed
to be vacated"
584

ly 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 pro cess 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
7
incompatible and inconsistent with said statutory
enactment.
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 8
case at bar has,
accordingly, been, in effect, duly represented.
With respect to the second point, respondent alleges that
______________
7 De los Santos vs. Mallare, 87 Phil, 289, 298-299.

8 Mangubat vs. Osmeña, Jr., L-12837, April 20, 1959; City of Cebu vs. Judge
Piccio. L-13012 & L-14876, December 31, 1960,
585
VOL. 15, DECEMBER 24, 1965 585

he has not as yet acted on any of the executive orders 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
allega-tion 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.
Bengzon, J.P., J., concurs and dessents is a seperate opinion.
Makalintal and Regala, JJ., concur with the opinion of
Justice J.P. Bengzon.
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
exec-
586

ution or implementation of such details, did not entail abdication of

legislative power (Government vs. Municipality of Binangonan, 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.
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.
587
VOL. 15, DECEMBER 24, 1965 587

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 [GovernorGeneral]
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 Audtior] 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:
588

"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 110 strict
separation of powers was adhered to. 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,
589
VOL. 15, DECEMBER 24, 1965 589

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.
It remains to examine the relation of the power to create and the
power to control local governments. Said relationship has already
been passed upon by this Court in Hebron v. Reyes, supra, In said
case, it was ruled that the power to control is an incident of the
power to create or abolish municipalities, Respondent's view
therefore, that creating municipalities and controlling their local
governments are "two worlds apart," is untenable. And since as
stated, the power to control local governments can no longer be
conferred on or exercised by the President, it follows a fortiori that
the power to create them, all the more cannot be so conferred or
exercised.
590
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 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. Mallare, 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 to? 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.
591
VOL. 15, DECEMBER 24, 1965 591

It is my view, therefore, that the Constitution, and not Republic Act

2370, repealed Section 68 of the Revised Administrative Code's
provision giving the President authority to create local governments.
And for this reason I agree with the ruling in the majority opinion
that the executive orders in question are null and void.
In thus ruling, the Court is but sustaining the fulfillment of our
historic desire to be free and independent under a republican form of
government, and exercising a function derived from the very
sovereignty that it upholds,
Executive orders declared null and void.
ANNOTATION
CREATION OF MUNICIPALITIES
Historical Background of the Power of Creating Municipalities in

the Philippines.
During the Spanish regime the procedure of the creation of
municipalities has been prescribed by the Leyes de las Indias
(Roman Catholic Bishop of Jaro vs. Director of Lands, 34 Phil. 528;
see also Law VIII, Title VII, Book IV of Recopilación de Leyes de
los Reynos de las Indias).
In the case of Catbalogan vs. Director of Lands, 17 Phil., 214,
the Court took cognizance of the procedure for the formation of
towns during the Spanish regime, Executive authorities and officials
who then represented the Spanish government were obliged to adjust
their procedures in the fulfillment of their duties with regard to the
establishment and laying out of new towns to the Leyes de las
Indias.
An Ayuntamiento corresponds to the English term municipal
corporation and the municipal government in the Islands falls short
of being such a corporation (Government of the Philippine Islands
vs. Abadilla, 46 Phil. 842; see also Roman Catholic Church vs.
Municipally of Cebu, 31 Phil. 517).
592

The unit of local administration during the Spanish regime was the
"pueblo" which ordinarily embraces an area of. many square miles
and contained numerous barrios or villages.
Historical Background under the American Regime.

The law governing municipalities was first provided for in General
Order No. 43, Series of 1899. This law was followed by General
Order No. 40, Series of 1900 promulgated by the Military Governor.
President it William McKinley's Instructions to the Second
Philippine Commission also stressed the importance of the creation

of municipal governments.
The Philippine Commission forthwith enacted Act No. 82 on
January 31, 1901 providing for the organization and government of
municipalities. Act No. 88 was passed on February 5, 1901 for the
organization of the provinces. The law on provincial and municipal
governments were embodied in Chapters 56, 57, 64 and 67 of the
Revised Administrative Code.
The Power to Create Corporations is Essentially Legislative.

The power of the municipal corporation is essentially legislative in
nature. The power is exclusive and almost unlimited. In the absence
of any constitutional limitations, a legislative body may create any
corporation it deems essential for the more efficient administration
of the government (I McQuillin, Municipal Corporations, 3rd ed.,
509; 19 R.C.L. section 2).
The legislative power to create municipal corporations may not
be delegated (Cooley, Municipal Corporations, p. 30), The
delegation, if at all, may be made if the legislature imposes
conditions on which the municipal corporation may be created. The
legislative may prescribe standards for guidance and authorize an
agency to determine facts on which the statute may be implemented
for the creation of such corporation.
In some jurisdictions, it has been held that the legislative
593
VOL. 15, DECEMBER 24, 1965 593

body may vest in a court the power to determine when the

incorporation of the community is necessary or useful or to
determine the extent and boundary of such corporations. (I
McQuillin, Municipal Corporations, 3rd Ed., p. 505). Usually, in the
creation of municipal corporations the conditions needed in order to
obtain its incorporation as a city or town are prescribed. Such
conditions may indicate the extent of the area proposed to
incorporate, the nature of the territory, the character of the lands and
the uses to which it may be devoted, the number of inhabitants and
even the density and location of the area to be incorporated (I
McQuillin, Municipal Corporations, p. 531).
The Nature of the Power to Create Municipal Corporation in the

Philippines.
The power to create corporation including municipal corporation
resides in the Congress of the Philippines. Such power included in
the general legislative power of Congress states: "The legislative
power shall be vested in a Congress of the Philippines which shall
consist of a Senate and a House of Representatives" (Art VI, Section

1, Constitution of the Philippines; Tiaco vs. Forbes, 228 U.S. 549;
Asuncion vs. Yriarte, 37 Phil. 67).
Under this authority, Congress may enact laws creating
provinces, sub-provinces, cities, municipalities, municipal districts,
barrios and other local entities. It may group into one area those
which are already existing. It may subdivide them into several other
local areas. It may abolish them. There is no limitation upon Its
power except the provisions of Art. VII, Section 1 of the
Constitution (Aruego, Law on Municipal Government, 1968 Ed., p.
37),
The Provincial Board may also organize barrios under Republic
Act No. 2370. See also Republic Act No. 2264, June 19, 1959,
Republic Act No, 5185 and Republic Act No. 1205. For organization
of municipalities, see Section 2170 of the Revised Administrative
Code as amended by Republic Act No. 2368.
594

The Nature of the Legislative Power to Create the Area For Local
Government.
The legislative power to create an area of the local government
involves two things: (1) the determination of whether a local area -
shall be created or not; (2) the determination of whether said
decision shall have the force of law. To leave the decision to another
agency or person to create or not to create and to determine the
conditions under which he would create, or to have discretion
whether to follow or not to follow the rule laid down in the law,
would be undue delegation of legislative power (Aruego, op. cit.,
1968 Ed., p. 37).
There would be no unlawful delegation of legislative power to
create the area when the legislative power determines by law the
conditions under which the local area may be created. Not leaving
this or some of them to be determined by another agency of the
government. It 10 not unlawf ul delegation of legislative power to
create when the agency has the authority to carry out the provisions
of the law and the discretion is only as to the manner of executing
the law (Id.).
Creation of Barrios by Authority of Law.

Under the Revised Barrio Charter (Republic Act No. 3590) barrios
may be created directly by the lawmaking body, or a creation of the
same may be caused by another agency (Sec. 3, Republic Act No.
3590). The Barrio Charter Law does not give the uncontrolled power
to determine whether or not to create the barrio and the conditions

under which such barrio should be created because the law has set
forth specific conditions (Aruego, Id.).
Constitutional Validity of Creation under Administrative Code by the

Executive.
Before the effectivity of the Administrative Code of 1918, Act 1748
was passed authorizing the Governor General of the Philippines to
make adjustment of provincial and municipal boundaries and the
change of capitals of
595
VOL. 15, DECEMBER 24, 1965 595

provinces from time to time to serve the public convenience and

interest
The Supreme Court overruled the contention that the act was an
undue delegation of legislative power. The Supreme Court ruled:
"The delegation of the power referred to on the Governor General does not
involve an abdication of legislative functions on the part of the legislature
with regard to the particular subject matter with which it authorizes the
Governor General to deal. It is simply a transference of certain details with
respect to provinces, municipalities, and townships, many of them newly
created, and all of them subject to more or less rapid change both in
development and center of population, the proper regulation of which might
require not only prompt action but action of such a detailed character as not
to permit the legislative body, as such, to take it efficiently." (Cardona vs.
Binañgonan, 36 Phil. 547).
The Supreme Court likewise upheld the constitutional legality of an

executive order of the Governor General in redefining the boundary
between the municipalities of Cardona and Binañgonan
(Government of the P.I. vs. Municipality of Binañgonan, 35 Phil.
518).
Section 68 of the Revised Administrative Code of 1917 was
enacted.
"SEC. 68. General Authority of the (Governor General) President of the

Philippines to fix boundaries and make new subdivisions.—The Governor
General (now President of the Philippines) may by executive order define
the boundary, or boundaries, of any province, subprovince, municipality,
(township) municipal district (See Act 27824), 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 division so created,
and may change the seat of government within any subdivision into such
place therein as the public welfare may require: Provided. That the
authorization of the Philippine Legislature (now 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. x x x."
The Governors General and later the Presidents of the
596

Philippines create several municipalities under this section. This law

practically gave uncontrolled discretion to the executive to create
new areas as municipalities and is of doubtf ul legality, For cases on
delegation of legislative powers as valid standards for delegation of
power, see People vs. Lim Ho, L-12091-2, January 28,1960; People
vs. Jolliffe, L-9553, May 13, 1959; People vs. Vera, 65 Phil. 56; U.S.
vs. Ang Tang Ho, 43 Phil. 1; Compañia General de Tabacos vs.
Board of Public Utility, 34 Phil. 136; Mutual Film Co. vs. Industrial
Commission, 236 U.S. 247, 59 L. Ed. 561; Mutual Film Corp. vs.
Industrial Commission, 236 U.S. 230, 59 L. Ed. 552; Pamana
Refining Co. vs. Ryan, 293 U.S. 388, 79 L. Ed. 446; A.L.A.
Schechter Poultry Corp. vs. U.S., 295 U.S. 79 L. Ed. 1570, U.S. vs.
Rock Royal Coop., 307 U.S. 533, L. Ed. 1446; Bowles vs.
Willingham, 321, U.S. 503, 88 L. Ed. 892; Araneta vs. Gatmaitan,
L8895, April 30, 1957; Cervantes vs. Auditor General, L4043, May
30, 1952; Phil. Association of Colleges vs. Secretary of Education,
51 Off. Gaz. 6230; People vs. Arnault. 48 Off. Gaz, 4805; Antamok
Gold Field-vs. CIR. 68 Phil. 340; U.S. vs. Barrias, 11 Phil. 327;
Yajus vs. White, 821 U.S. 414; Ammann vs. Mailonce, 332 U.S. 245.
Section 68 of the Revised Administrative Code has been declared
unconstitutional in the case of Pelaez vs. Jimenez, G.R. No. L-
23825. December 24, 1965. The Supreme Court thus reiterated the f
undamental principle that the creation of municipal corporations is
legislative in nature.
Moreover, Section 3 of Republic Act No. 2370 which took effect
on January 1, 1960 provided that barrios may not be created or their
boundaries altered except by act of Congress or by the
corresponding provincial board upon petition of the majority of the
voters in the area affected and the recommendation of the
municipality in which the proposed barrios are situated. If under this
new law the President cannot create a barrio, he cannot create
municipalities which are composed of several barrios (See Republic
Act No. 5185).
For creation of barrios, see Revised Barrio Charter (Republic Act

No. 3590).—JUDGE JORGE COQUIA
597
VOL. 15, DECEMBER 24, 1965 597

ANNOTATION
VALID DELEGATION OF LEGISLATIVE POWER
I. Principle of separation of powers.

The separation of powers is a fundamental principle in our system of
government. It obtains not through express provision but by actual
division in our Constitution. Each department of the government has
exclusive cognizance of matters within its jurisdiction and is
supreme within its own sphere. (Angara vs. Electoral Commission,
et al., 63 Phil. 139).
II. Constitutional provisions on separation of powers.

The Legislative power shall be vested in a Congress of the
Philippines which shall consist of a Senate and a House of
Representatives. (Article VI, Sec, I, Phil. Constitution).
The Executive power shall be vested in a President of the
Philippines. (Art. VII, Sec. 1, Phil. Constitution).
The Judicial power shall be vested in one Supreme Court and in
such inferior courts as may be established by law. (Art. VIII, Sec. 1,
Phil. Constitution).
The Government of the United States in the Philippines is one
whose powers have been carefully apportioned between three
distinct departments which have their powers alike, limited and
defined, and are of equal dignity and, within their respective spheres
of action, equally independent. (Abueva vs. Wood, 46 Phil. 613).
III. Importance of the principle.

It has been said that the principle of separation of powers of
government is fundamental to the very existence of every
constitutional government. It represents the most important principle
of government declaring and guaranteeing the liberties of the people.
(Am. Jur. 182) Under our constitutional system, the powers of
government are distributed among three co-ordinate and
substantially independent organs: the legislative, the executive and
the
598

judicial. Each of these departments of the government derives its

authority from the Constitution, which, in turn, is the highest
expression of the popular will. Each has exclusive cognizance of the
matters within the jurisdiction and is supreme within its own sphere.
(People vs. Vera, 65 Phil. 63).
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. 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. (U.S. vs. Ang Tang Ho,
48 Phil. 1).
IV. Scope of the principle of separation of powers.

The three departments of the government are co-ordinate, co-
important, co-equal and independent of each other; that each of the
several departments of the government derives its authority directly
or indirectly from the people and is responsible to them; that each
has exclusive cognizance of the matters within its jurisdiction and is
supreme within its own sphere. In the exercise of the powers of
government assigned to them severally, the departments operate
harmoniously and independently of the others and the action of any
one of them in the exercise of its powers is not subject to the control
by either of the others. (Province of Tarlac vs. Gale, 26 Phil. 338;
Barcelona vs. Baker, 5 Phil. 87).
V. Principle of checks and balances.

It does not follow from the fact that the three powers are to be kept
separate and distinct that the Constitution intended them to be
absolutely unrestrained and independent of each other. The
Constitution has provided for
599
VOL. 15, DECEMBER 24, 1965 599

the elaborate system of checks and balances to secure coordination

in the workings of various departments of the government For
example, the Chief Executive under our Constitution in so far made
a check on the Legislative power that his assent is required in the

enactment of laws. This, however, is subject to the further check that
a bill may become a law notwithstanding the refusal of the President
to approve it, by a vote of two-thirds or threefourths as the case may
be, of the National Assembly. The President has also the right to
convene the Assembly in special session whenever he chooses, On
the other hand, the National Assembly operates as a check on the
Executive in the sense that its consent through the Commission on
Appointments is necessary in the appointment of certain officers;
and the concurrence of a majority of all its members is essential to
the conclusion of treaties. Furthermore, in Its power to determine
what courts, other than the Supreme Court shall be established, to
define their jurisdiction and to appropriate funds for the support, the
National Assembly exercises to a certain ,extent control over the
judicial power of trying impeachments and the judiciary in turn,
with the Supreme Court as the final arbiter, effectively checks the
other departments in the exercise of its power to determine the law,
and hence, to declare executive and legislative acts void if violative
of the Constitution. (Angara vs. Electoral Commission, supra).
VI. Principle of non-delegation of powers.

The maxim of Constitutional law forbidding the delegation of
legislative power should be zealously protected. "The true
distinction, therefore, 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." (Cincinnati, W.
& Z. R. Co. vs. Comrs. Clinton County, 1 Ohio St. 88) Rubi vs.
Province of Mindoro, 39 Phil. 662.
Thus, an Act of the Philippine Legislature giving to the Board of
Public Utility Commissioners power to require
600

public utility "to furnish annually a detailed report of finances and

operations, in such form and containing such matters as the Board
may from time to time by order prescribe" is invalid for the reason
that it is a delegation of legislative power to the Board of Public
Utility Commissioners and is in violation of the Act of July 1, 1902.
(Compañia General de Tabacos de Filipinas vs. Board of Public
Utility Commissioners, 34 Phil. 137).
VII. Delegation of legislative power; historical development.
The power to make laws—the legislative power—is vested in a

bicameral Legislature by the Jones Law and in a unicameral
National Assembly by the Constitution. The Philippine Legislature
or the National Assembly may not escape Its duties and
responsibilities by delegating that power to any other body or
authority. Any attempt to abdicate the power is unconstitutional and
void, on the principle that potestas delegata, non delegare potest.
This principle is said to have originated with the glossators, was.
introduced into English, law through a misreading of Bracton, there
developed as a principle of agency, was established by Lord Coke in
the English public law in decisions forbidding the delegation of
judicial power, and found its way into America as an enlightened
principle of free Government. It has since become an accepted
corollary of the principle of separation of powers. (People vs. Vera,
supra).
VIII. Exceptions to the principle of non-delegation.

The rule, however, which forbids the delegation of legislative power
is not absolute and inflexible, It admits of exceptions, An exception
sanctioned by immemorial practice permits the central legislative
body to delegate legislative power to local authorities. On quite the
same principle, Congress is empowered to delegate legislative
power to such agencies in the territories of the United States as it
may select. Courts have also sustained the delegation of legislative
powers to the people at large, though some authorities maintain that
this may not be done, Doubtless, also, legislative power may be
delegated by the
601
VOL. 15, DECEMBER 24, 1965 601

Constitution itself. Section 14, paragraph 2 of Article VI of the

Constitution of the Philippines provides that "the National Assembly
may by law authorize the President, subject to such limitations and
restrictions as it may impose, to fix within specified limits, tariff
rates, import or export quotas, and tonnage and wharfage dues." In
times of war or other national emergency, the National Assembly
may by law authorize the President, for a limited period and subject
to such restrictions as it may prescribe, to promulgate rules and
regulations to carry out a declared national policy. (People vs. Vera,
supra).
The provision of section 1 of Commonwealth Act No. 548 does
not confer legislative power upon the Director of Public Works and
the Secretary 01 Public Works and Communications. The authority
conferred upon them and under which they promulgated the rules
and regulations now complained of is not to determine what public
policy demands but merely to carry out the legislative policy laid
down by the National Assembly in said Act, to wit, to promote safe
transit upon, and avoid obstruction on roads and streets designated
as national roads by Acts of the National Assembly and to close
them temporarily to any or all classes of traffic "whenever the
condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest." The
delegated power, if at all, therefore, is not the determination of what
the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be
predicated. (Calalang vs. Williams, 70 Phil. 726).
IX. Tests of undue delegation.

In testing whether a statute constitutes an undue delegation of
legislative power or not, it is usual to inquire whether the statute was
complete in all its terms and provisions when it left the hands of the
legislature so that nothing is left to the judgment of any other
appointee or delegate of the legislature. In U.S. vs. Ang Tang Ho (43
Phil. 1) the Supreme Court adhered to the foregoing rule. The
general rule, however, is limited by another
602

rule that to a certain extent matters of detail may be left to be filled

in by rules and regulations to be adopted or promulgated by
executive officers and administrative boards. As a rule, an act of the
legislature is incomplete and hence, invalid if it does not lay down
by any rule or definite standard by which the administrative board
may be guided in the exercise of the discretionary powers delegated
to it. (People vs. Vera, supra).
In one case, appellants argue that, while Act No. 2581 empowers
the Insular Treasurer to issue and cancel certificates or permits for
the sale of speculative securities, no standard or rule is fixed in the
Act which can guide said official in determining the cases in which a
certificate or permit ought to be issued, thereby making his opinion
the sole criterion in the matter of its issuance, with the result that
legislative powers being unduly delegated to the Insular Treasurer,
Act No. 2581 is unconstitutional. The Court is of the opinion that the
Act furnishes a sufficient standard for the Insular Treasurer to follow
in reaching a decision regarding the issuance or cancellation of a
certificate or permit,
In view of the intention and purpose of Act No. 2581—to protect
the public against "speculative schemes which have no more basis
than so many feet of blue sky" and against the "sale of stock in fly-
by-night concerns, visionary oil wells, distant gold mines and other
like fraudulent exploitations,"—the Court was inclined to hold that

"public interest" in this case is suf f icient standard to guide the
Insular Treasurer, in reaching a decision on a matter pertaining to the
issuance of certificates or permits. (People vs. Rosenthal, 68 Phil.
328).
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 more 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 the crime and it is not
complete, and some legislative act renains to be done to make it a
law or a crime the doing
603
VOL. 15, DECEMBER 24, 1965 603

of which is vested in the Governor General, the Act is a delegation

of legislative power, and is unconstitutional and void. (People vs.
Vera, supra).
The Probation Act does not, by the force of any of Its provisions,
fix and impose upon the provincial boards any standard or guide in
the exercise of their discretionary power. What is granted is a
"roving commission'' which enables the provincial boards to
exercise arbitrary discretion. By section 11 of the Act, the
Legislature does seemingly on its own authority extend the benefits
of the probation Act to the provinces but in reality leaves the entire
matter for the various provincial boards to determine. If a provincial
board does not wish to have the Act applied in its province, all that it
has to do is to decline to appropriate the needed amount for the
salary of a probation officer. This is a virtual surrender of legislative
power to the provincial boards. (People vs. Vera, supra).
The legislature may enact laws for a particular locality different
from those applicable to other localities and while recognizing the f
orce of the principle hereinabove expressed, courts in many
jurisdictions have sustained the constitutionality of the submission
of option laws to the vote of the people. (6 R.C.L. 171). But option
laws thus sustained treat of subjects purely local in character which
should receive different treatment in different localities placed under
different circumstances. Without denying the right of self-
government and the propriety of leaving matters of purely local
concern in the hands of local authorities or for the people of small
communities to pass upon in the matters of general legislation like
that which treats of criminals in general, and as regards the general
subject of probation, discretion may not be vested in a manner so
unqualified and absolute as provided in Act No. 4221. (People vs.

Vera, supra).
X. Distinction between power to make laws and discretion as to its

execution.
The true distinction is between the delegation of power to make the
law, which necessarily involves a discretion
604

Abaño vs. Aguipo
as to what it shall be, and conferring an 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.
(Cincinnati, W. & Z. R. Co. vs. Clinton Country Commissioners, 1
Ohio St. 77, 88.). See also Sutherland on Statutory Construction,
sec. 68. To the same effect are decisions of the Supreme Court in the
Municipality of Cardona vs. Municipality of Binañgonan, 36 Phil
547; Rubi vs. Provincial Board of Mindoro, 39 Phil. 860; Cruz vs.
Youngberg, 56 Phil. 234; People vs. Vera, supra.—ATTY. JULIANA
B. DE CASTRO,
Note.—When delegation of legislative powers is not alIowed. It

was not the intention of Congress, in enacting Republic Act No. 997,
to authorize the transfer of powers and jurisdiction of the courts of
justice to the officials to be appointed or offices to be created by the
Reorganization Plan. Congress is well aware of the provision of the
Constitution that judicial powers are vested "only in the Supreme
Court and in such courts as the law may establish." The
Reorganization Commission was not authorized to create courts of
justice, or to take away from them their jurisdiction and transfer said
jurisdiction to create courts of justice, or take away from them their
jurisdiction and transfer said jurisdiction to the officials appointed or
offices created under the Reorganization Plan. The Legislature may
not and cannot delegate its power to legislate or create courts of
justice to any other agency of the Government. (Chinese Flour
Importers' Association vs. Price Stabilization Board, L-4465, July
12, 1961; U.S. vs. Shrevoport, 287 U.S. 7777, L. Ed. 175 and
Johnson vs. San Diego, 42 P. 249, cited in 11 Am, Jur. 921-922),
Corominas. Jr. vs. Labor Standards Commission, 2 SCRA 721.
_______________
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1 Pelaez v. Auditor General, 15 SCRA 569

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1 Pelaez v. Auditor General, 15 SCRA 569

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2/15/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 015

VOL. 15, DECEMBER 24, 1965 569

No. L-23825. December 24, 1965.

EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR

Administrative law; Power of President to create municipalities.—

570 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

Same; Same; Same; Same; Requirements of due delegation of power

VOL. 15, DECEMBER 24, 1965 571

Pelaez vs. Auditor General

purely legislative functions.

572 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

it certainly does, said Section 68, as part of the Revised Administrative

ORIGINAL ACTION in the Supreme Court. Prohibition with

VOL. 15, DECEMBER 24, 1965 573

During the period from September 4 to October 29, 1064 the

Executive Municipality Province Date Annex (Original

574 SUPREME COURT REPORTS ANNOTATED

is premature and that not all proper parties—referring: to the

Pursuant to the first two (2) paragraphs of the same Section 3:

VOL. 16, DECEMBER 24, 1965 575

Respondent answers in the affirmative, upon the theory that a new

"The (Governor-General) President of the Philippines may by executive

necessary a change of the territory under the jurisdiction of any

576 SUPREME COURT REPORTS ANNOTATED

shall be made in such manner as may be recommended by the (Insular

Respondent alleges that the power of the President to create

violation of the principle of separation of -powers, that said law: (a)

1a Except to local governments, to which legislative powers, with respect to

VOL. 15, DECEMBER 24, 1965 577

—it must set forth therein the 2

578 SUPREME COURT REPORTS ANNOTATED

It does not enunciate any policy to be carried out or implemented by

it is apparent, however, from the language of this clause, that the

3 Whenever in the judgment of the Governor-General the public welfare requires,

shall be as is recommended by the Insular Auditor and approved by the Governor-

VOL. 15, DECEMBER 24, 1965 579

as the public interest requires" The opening statement of said

580 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

is not an administrative function, but one which is essentially and

VOL. 15, DECEMBER 24, 1965 581

tion or operation of a toll road is in the "public interest" and whether

fixing the name of the same (Carolina-Virginia Coastal Highway vs.

If the term "unfair competition" is so broad as to vest in the

582 SUPREME COURT REPORTS ANNOTATED

fact, if the validity of the delegation of powers made in Section 88

collapse of the democratic system established by our Constitution,

VOL. 15, DECEMBER 24, 1965 583

Neither may he vote, set aside or annul an ordinance passed by said

"When a part 01 a barrio is detached from a municipality to form a new municipality or to be

584 SUPREME COURT REPORTS ANNOTATED

ly fail to comply with the constitutional mandate above quoted.

the officers of the newly created municipalities—"have been

7 De los Santos vs. Mallare, 87 Phil, 289, 298-299.

VOL. 15, DECEMBER 24, 1965 585

he has not as yet acted on any of the executive orders in question

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and

BENGZON, J.P., J., concurring and dissenting:

A sign of progress in a developing nation is the rise of new

586 SUPREME COURT REPORTS ANNOTATED

ution or implementation of such details, did not entail abdication of

of the Philippine Constitution and Republic Act 2370 (The Barrio