Pelaez v. Auditor General

10/27/21, 7:39 PM 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.
https://central.com.ph/sfsreader/session/0000017cc191e64fa9463f6d000d00d40059004a/t/?o=False 1/35
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;
creating1 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

Order No. Promulgated (Original
Petition)
93 Nilo Zamboanga Sept. 4, 1961 A
del Sur
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 "28" H "
Sur
102 Roxas Davao """ I "
103 Magsaysay " """ J "
104 Sta, Maria " """ K "
105 Badiangan Iloilo """ L "
106 Mina " Oct. 1 " M "
107 Andong Lanao del """ N "
Sur
108 Sultan """ """ O "
Alonto
Executive Municipality Province Date Annex

Order No. Promulgated (Original
Petition)
109 Maguing """ """ P "
110 Dianaton """ """ Q "
111 Elpidio Mt. Province """ R "
Quirino
112 Bayog Zamboanga """ S "
del Sur
117 Gloria Oriental """ GG (Attached
Mindoro here to)
113 Maasin Cotabato """ T
114 Siayan Zamboanga """ LC
del Norte
115 Roxas """ """ V
116P Panganuran """ """ W
118 Kalilangan Bukidnon """ X
119 Lantapan " """ Y
120 Libertad Zamboanga """ Z
del Sur
121 General """ """ AA
Aguinaldo
124 Rizal Surigao del "3" BB
Norte
126 Tigao Surigao del "23" CC
Sur
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 policy 2

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
2a
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
the delegate
2b
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 that
3
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 they do4 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, except on appeal
5
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 official concerned
6
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 incompatible
7
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 case 8 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

OF LEGISLATIVE POWER
VALID DELEGATION
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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Pelaez v. Auditor General

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10/27/21, 7:39 PM 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

570 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

law: (a) be complete in itself, setting forth therein the policy to be

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

VOL. 15, DECEMBER 24, 1965 571

Pelaez vs. Auditor General

572 SUPREME COURT REPORTS ANNOTATED

Pelaez vs. Auditor General

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

ORIGINAL ACTION in the Supreme Court. Prohibition

VOL. 15, DECEMBER 24, 1965 573

During the period from September 4 to October 29, 1064

Executive Municipality Province Date Annex

Executive Municipality Province Date Annex

574 SUPREME COURT REPORTS ANNOTATED

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

"Barrios shall not be created or their boundaries altered nor their

Pursuant to the first two (2) paragraphs of the same

Hence, since January 1, 1960, when Republic Act No. 2370

VOL. 16, DECEMBER 24, 1965 575

Respondent answers in the affirmative, upon the theory

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

therein, may divide any province into one or more subprovices,

576 SUPREME COURT REPORTS ANNOTATED

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

Respondent alleges that the power of the President to

municipal corporations is essentially legislative in nature,

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

VOL. 15, DECEMBER 24, 1965 577

—it must set forth therein the policy 2

2 Calalang vs. Williams, 70 Phil. 726; Pangasinan Transp. Co. vs.

578 SUPREME COURT REPORTS ANNOTATED

It does not enunciate any policy to be carried out or

"x x x may change the seat of the government within any

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

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

VOL. 15, DECEMBER 24, 1965 579

as the public interest requires" The opening statement of

to promote safe transit upon national roads and streets.

580 SUPREME COURT REPORTS ANNOTATED

is not an administrative function, but one which is

28 Pac. 405-409); or authorizing the territory of a town,

VOL. 15, DECEMBER 24, 1965 581

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

"To summarize and conclude upon this point: Sec. 3 of the

the few restrictions that are imposed, the discretion of the

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

"The President shall have control of all the executive

The power of control under this provision implies the right

provided by statutory enactments. Hence, the President

VOL. 15, DECEMBER 24, 1965 583

Neither may he vote, set aside or annul an ordinance

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

584 SUPREME COURT REPORTS ANNOTATED

ly fail to comply with the constitutional mandate above

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

VOL. 15, DECEMBER 24, 1965 585