Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-75697 June 18, 1987
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner,
vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA
COMMISSION, CITY MAYOR and CITY TREASURER OF MANILA, respondents.
Nelson Y. Ng for petitioner.
The City Legal Officer for respondents City Mayor and City Treasurer.

MELENCIO-HERRERA, J.:

taxes, thereby resulting in substantial losses estimated at P450 Million annually in

government revenues;
2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per
annum from rentals, sales and disposition of videograms, and such earnings have not
been subjected to tax, thereby depriving the Government of approximately P180 Million
in taxes each year;
3. WHEREAS, the unregulated activities of videogram establishments have also affected
the viability of the movie industry, particularly the more than 1,200 movie houses and
theaters throughout the country, and occasioned industry-wide displacement and
unemployment due to the shutdown of numerous moviehouses and theaters;
4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the
Government to create an environment conducive to growth and development of all
business industries, including the movie industry which has an accumulated investment
of about P3 Billion;
5. WHEREAS, proper taxation of the activities of videogram establishments will not only
alleviate the dire financial condition of the movie industry upon which more than 75,000
families and 500,000 workers depend for their livelihood, but also provide an additional
source of revenue for the Government, and at the same time rationalize the heretofore
uncontrolled distribution of videograms;

This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on
behalf of other videogram operators adversely affected. It assails the constitutionality of
Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with
broad powers to regulate and supervise the videogram industry (hereinafter briefly referred to as
the BOARD). The Decree was promulgated on October 5, 1985 and took effect on April 10, 1986,
fifteen (15) days after completion of its publication in the Official Gazette.

6. WHEREAS, the rampant and unregulated showing of obscene videogram features

constitutes a clear and present danger to the moral and spiritual well-being of the youth,
and impairs the mandate of the Constitution for the State to support the rearing of the
youth for civic efficiency and the development of moral character and promote their
physical, intellectual, and social well-being;

On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential
Decree No. 1994 amended the National Internal Revenue Code providing, inter alia:

7. WHEREAS, civic-minded citizens and groups have called for remedial measures to
curb these blatant malpractices which have flaunted our censorship and copyright laws;

SEC. 134. Video Tapes. There shall be collected on each processed videotape cassette, ready for playback, regardless of length, an annual tax of five
pesos; Provided, That locally manufactured or imported blank video tapes
shall be subject to sales tax.

8. WHEREAS, in the face of these grave emergencies corroding the moral values of the
people and betraying the national economic recovery program, bold emergency
measures must be adopted with dispatch; ... (Numbering of paragraphs supplied).

On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers,
Importers and Distributors Association of the Philippines, and Philippine Motion Pictures Producers
Association, hereinafter collectively referred to as the Intervenors, were permitted by the Court to
intervene in the case, over petitioner's opposition, upon the allegations that intervention was
necessary for the complete protection of their rights and that their "survival and very existence is
threatened by the unregulated proliferation of film piracy." The Intervenors were thereafter allowed
to file their Comment in Intervention.
The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows:
1. WHEREAS, the proliferation and unregulated circulation of videograms including,
among others, videotapes, discs, cassettes or any technical improvement or variation
thereof, have greatly prejudiced the operations of moviehouses and theaters, and have
caused a sharp decline in theatrical attendance by at least forty percent (40%) and a
tremendous drop in the collection of sales, contractor's specific, amusement and other

Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:
1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the
local government is a RIDER and the same is not germane to the subject matter thereof;
2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade
in violation of the due process clause of the Constitution;
3. There is no factual nor legal basis for the exercise by the President of the vast powers
conferred upon him by Amendment No. 6;
4. There is undue delegation of power and authority;
5. The Decree is an ex-post facto law; and

6. There is over regulation of the video industry as if it were a nuisance, which it is not.
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only one subject which shall be
expressed in the title thereof" 1 is sufficiently complied with if the title be comprehensive enough to
include the general purpose which a statute seeks to achieve. It is not necessary that the title
express each and every end that the statute wishes to accomplish. The requirement is satisfied if
all the parts of the statute are related, and are germane to the subject matter expressed in the title,
or as long as they are not inconsistent with or foreign to the general subject and title. 2 An act
having a single general subject, indicated in the title, may contain any number of provisions, no
matter how diverse they may be, so long as they are not inconsistent with or foreign to the general
subject, and may be considered in furtherance of such subject by providing for the method and
means of carrying out the general object." 3 The rule also is that the constitutional requirement as
to the title of a bill should not be so narrowly construed as to cripple or impede the power of
legislation. 4 It should be given practical rather than technical construction. 5
Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a
rider is without merit. That section reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of Videograms.
Notwithstanding any provision of law to the contrary, the province shall collect
a tax of thirty percent (30%) of the purchase price or rental rate, as the case
may be, for every sale, lease or disposition of a videogram containing a
reproduction of any motion picture or audiovisual program. Fifty percent (50%)
of the proceeds of the tax collected shall accrue to the province, and the other
fifty percent (50%) shall acrrue to the municipality where the tax is collected;
PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by
the City/Municipality and the Metropolitan Manila Commission.
xxx xxx xxx
The foregoing provision is allied and germane to, and is reasonably necessary for the
accomplishment of, the general object of the DECREE, which is the regulation of the video industry
through the Videogram Regulatory Board as expressed in its title. The tax provision is not
inconsistent with, nor foreign to that general subject and title. As a tool for regulation 6 it is simply
one of the regulatory and control mechanisms scattered throughout the DECREE. The express
purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize
the heretofore uncontrolled distribution of videograms is evident from Preambles 2 and 5, supra.
Those preambles explain the motives of the lawmaker in presenting the measure. The title of the
DECREE, which is the creation of the Videogram Regulatory Board, is comprehensive enough to
include the purposes expressed in its Preamble and reasonably covers all its provisions. It is
unnecessary to express all those objectives in the title or that the latter be an index to the body of
the DECREE. 7
2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive,
confiscatory, and in restraint of trade. However, it is beyond serious question that a tax does not
cease to be valid merely because it regulates, discourages, or even definitely deters the activities
taxed. 8 The power to impose taxes is one so unlimited in force and so searching in extent, that the
courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest
in the discretion of the authority which exercises it. 9 In imposing a tax, the legislature acts upon its
constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 10

The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by
the realization that earnings of videogram establishments of around P600 million per annum have
not been subjected to tax, thereby depriving the Government of an additional source of revenue. It
is an end-user tax, imposed on retailers for every videogram they make available for public
viewing. It is similar to the 30% amusement tax imposed or borne by the movie industry which the
theater-owners pay to the government, but which is passed on to the entire cost of the admission
ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed
uniformly on all videogram operators.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for
regulating the video industry, particularly because of the rampant film piracy, the flagrant violation
of intellectual property rights, and the proliferation of pornographic video tapes. And while it was
also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition.
The public purpose of a tax may legally exist even if the motive which impelled
the legislature to impose the tax was to favor one industry over another. 11
It is inherent in the power to tax that a state be free to select the subjects of
taxation, and it has been repeatedly held that "inequities which result from a
singling out of one particular class for taxation or exemption infringe no
constitutional limitation". 12 Taxation has been made the implement of the
state's police power. 13
At bottom, the rate of tax is a matter better addressed to the taxing legislature.
3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE
by the former President under Amendment No. 6 of the 1973 Constitution providing that "whenever
in the judgment of the President ... , there exists a grave emergency or a threat or imminence
thereof, or whenever the interim Batasang Pambansa or the regular National Assembly fails or is
unable to act adequately on any matter for any reason that in his judgment requires immediate
action, he may, in order to meet the exigency, issue the necessary decrees, orders, or letters of
instructions, which shall form part of the law of the land."
In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause
sufficiently summarizes the justification in that grave emergencies corroding the moral values of the
people and betraying the national economic recovery program necessitated bold emergency
measures to be adopted with dispatch. Whatever the reasons "in the judgment" of the then
President, considering that the issue of the validity of the exercise of legislative power under the
said Amendment still pends resolution in several other cases, we reserve resolution of the question
raised at the proper time.
4. Neither can it be successfully argued that the DECREE contains an undue delegation of
legislative power. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the
direct assistance of other agencies and units of the government and deputize, for a fixed and
limited period, the heads or personnel of such agencies and units to perform enforcement functions
for the Board" is not a delegation of the power to legislate but merely a conferment of authority or
discretion as to its execution, enforcement, and implementation. "The true distinction is between
the delegation of power to make the law, which necessarily involves a discretion as to what it shall
be, and conferring authority or discretion as to its execution to be exercised under and in
pursuance of the law. The first cannot be done; to the latter, no valid objection can be
made." 14 Besides, in the very language of the decree, the authority of the BOARD to solicit such
assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject
to the direction and control of the BOARD." That the grant of such authority might be the source of
graft and corruption would not stigmatize the DECREE as unconstitutional. Should the eventuality
occur, the aggrieved parties will not be without adequate remedy in law.

5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other
categories, one which "alters the legal rules of evidence, and authorizes conviction upon less or
different testimony than the law required at the time of the commission of the offense." It is
petitioner's position that Section 15 of the DECREE in providing that:
All videogram establishments in the Philippines are hereby given a period of
forty-five (45) days after the effectivity of this Decree within which to register
with and secure a permit from the BOARD to engage in the videogram
business and to register with the BOARD all their inventories of videograms,
including videotapes, discs, cassettes or other technical improvements or
variations thereof, before they could be sold, leased, or otherwise disposed of.
Thereafter any videogram found in the possession of any person engaged in
the videogram business without the required proof of registration by the
BOARD, shall be prima facie evidence of violation of the Decree, whether the
possession of such videogram be for private showing and/or public exhibition.

The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video
industry. On the contrary, video establishments are seen to have proliferated in many places
notwithstanding the 30% tax imposed.
In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of
the DECREE. These considerations, however, are primarily and exclusively a matter of legislative
concern.
Only congressional power or competence, not the wisdom of the action taken,
may be the basis for declaring a statute invalid. This is as it ought to be. The
principle of separation of powers has in the main wisely allocated the
respective authority of each department and confined its jurisdiction to such a
sphere. There would then be intrusion not allowable under the Constitution if
on a matter left to the discretion of a coordinate branch, the judiciary would
substitute its own. If there be adherence to the rule of law, as there ought to
be, the last offender should be courts of justice, to which rightly litigants submit
their controversy precisely to maintain unimpaired the supremacy of legal
norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent on its
wisdom cannot be sustained. 18

raises immediately a prima facie evidence of violation of the DECREE when the required proof of
registration of any videogram cannot be presented and thus partakes of the nature of an ex post
facto law.
The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals,
et al. 15
... it is now well settled that "there is no constitutional objection to the passage
of a law providing that the presumption of innocence may be overcome by a
contrary presumption founded upon the experience of human conduct, and
enacting what evidence shall be sufficient to overcome such presumption of
innocence" (People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1
COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641).
And the "legislature may enact that when certain facts have been proved that
they shall be prima facie evidence of the existence of the guilt of the accused
and shift the burden of proof provided there be a rational connection between
the facts proved and the ultimate facts presumed so that the inference of the
one from proof of the others is not unreasonable and arbitrary because of lack
of connection between the two in common experience".16
Applied to the challenged provision, there is no question that there is a rational connection between
the fact proved, which is non-registration, and the ultimate fact presumed which is violation of the
DECREE, besides the fact that theprima facie presumption of violation of the DECREE attaches
only after a forty-five-day period counted from its effectivity and is, therefore, neither retrospective
in character.
6. We do not share petitioner's fears that the video industry is being over-regulated and being
eased out of existence as if it were a nuisance. Being a relatively new industry, the need for its
regulation was apparent. While the underlying objective of the DECREE is to protect the moribund
movie industry, there is no question that public welfare is at bottom of its enactment, considering
"the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing
public brought about by the availability of unclassified and unreviewed video tapes containing
pornographic films and films with brutally violent sequences; and losses in government revenues
due to the drop in theatrical attendance, not to mention the fact that the activities of video
establishments are virtually untaxed since mere payment of Mayor's permit and municipal license
fees are required to engage in business. 17

In fine, petitioner has not overcome the presumption of validity which attaches to a challenged
statute. We find no clear violation of the Constitution which would justify us in pronouncing
Presidential Decree No. 1987 as unconstitutional and void.
WHEREFORE, the instant Petition is hereby dismissed.
No costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23825

December 24, 1965

EMMANUEL PELAEZ, petitioner,

vs.
THE AUDITOR GENERAL, respondent.
Zulueta, Gonzales, Paculdo and Associates for petitioner.
Office of the Solicitor General for respondent.
CONCEPCION, J.:
During the period from September 4 to October 29, 1964 the President of the Philippines,
purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive
Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated in
the margin.1 Soon after the date last mentioned, or on November 10, 1964 petitioner Emmanuel
Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present special civil
action, for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain
him, as well as his representatives and agents, from passing in audit any expenditure of public
funds in implementation of said executive orders and/or any disbursement by said municipalities.
Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68
has been impliedly repealed by Republic Act No. 2370 and constitutes an undue delegation of
legislative power. Respondent maintains the contrary view and avers that the present action is
premature and that not all proper parties referring to the officials of the new political subdivisions
in question have been impleaded. Subsequently, the mayors of several municipalities adversely
affected by the aforementioned executive orders because the latter have taken away from the
former the barrios composing the new political subdivisions intervened in the case. Moreover,
Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were allowed to and did appear
as amici curiae.
The third paragraph of Section 3 of Republic Act No. 2370, reads:
Barrios shall not be created or their boundaries altered nor their names changed except
under the provisions of this Act or by Act of Congress.
Pursuant to the first two (2) paragraphs of the same Section 3:
All barrios existing at the time of the passage of this Act shall come under the provisions
hereof.
Upon petition of a majority of the voters in the areas affected, a new barrio may be
created or the name of an existing one may be changed by the provincial board of the
province, upon recommendation of the council of the municipality or municipalities in
which the proposed barrio is stipulated. The recommendation of the municipal council

shall be embodied in a resolution approved by at least two-thirds of the entire

membership of the said council: Provided, however, That no new barrio may be created
if its population is less than five hundred persons.
Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be
created or their boundaries altered nor their names changed" except by Act of Congress or of the
corresponding provincial board "upon petition of a majority of the voters in the areas affected" and
the "recommendation of the council of the municipality or municipalities in which the proposed
barrio is situated." Petitioner argues, accordingly: "If the President, under this new law, cannot even
create a barrio, can he create a municipality which is composed of several barrios,
since barrios are units of municipalities?"
Respondent answers in the affirmative, upon the theory that a new municipality can be created
without creating new barrios, such as, by placing old barrios under the jurisdiction of the new
municipality. This theory overlooks, however, the main import of the petitioner's argument, which is
that the statutory denial of the presidential authority to create a new barrio implies a negation of the
bigger power to create municipalities, each of which consists of several barrios. The cogency and
force of this argument is too obvious to be denied or even questioned. Founded upon logic and
experience, it cannot be offset except by a clear manifestation of the intent of Congress to the
contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2379, has
been brought to our attention.
Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive
orders are based, provides:
The (Governor-General) President of the Philippines may by executive order define the
boundary, or boundaries, of any province, subprovince, municipality, [township] municipal
district, or other political subdivision, and increase or diminish the territory comprised
therein, may divide any province into one or more subprovinces, separate any political
division other than a province, into such portions as may be required, merge any of such
subdivisions or portions with another, name any new subdivision so created, and may
change the seat of government within any subdivision to such place therein as the public
welfare may require: Provided, That the authorization of the (Philippine Legislature)
Congress of the Philippines shall first be obtained whenever the boundary of any
province or subprovince is to be defined or any province is to be divided into one or more
subprovinces. When action by the (Governor-General) President of the Philippines in
accordance herewith makes necessary a change of the territory under the jurisdiction of
any administrative officer or any judicial officer, the (Governor-General) President of the
Philippines, with the recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the several officers
affected and assign such officers to the new districts so formed.
Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions thereby
affected shall be made in such manner as may be recommended by the (Insular Auditor)
Auditor General and approved by the (Governor-General) President of the Philippines.
Respondent alleges that the power of the President to create municipalities under this section does
not amount to an undue delegation of legislative power, relying upon Municipality of Cardona vs.
Municipality of Binagonan (36 Phil. 547), which, he claims, has settled it. Such claim is untenable,
for said case involved, not the creation of a new municipality, but a mere transfer of territory
from an already existing municipality (Cardona) to another municipality (Binagonan), 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 Binagonan [34 Phil. 518, 519-5201) in consequence of the fixing and
definition, pursuant to Act No. 1748, of the common boundaries of two municipalities.
It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or
settle conflicts of jurisdiction between adjoining municipalities, may partake of
an administrative nature involving, as it does, the adoption of means and ways to carry into
effect the law creating said municipalities the authority to create municipal corporations is
essentially legislative in nature. In the language of other courts, it is "strictly a legislative function"
(State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the
exercise oflegislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme
Court of Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405,
409), "municipal corporations are purely the creatures of statutes."
Although1a Congress may delegate to another branch of the Government the power to fill in the
details in the execution, enforcement or administration of a law, it is essential, to forestall a violation
of the principle of separation of powers, that said law: (a) be complete in itself it must set forth
therein the policy to be executed, carried out or implemented by the delegate 2 and (b) fix a
standard the limits of which are sufficiently determinate or determinable to which the delegate
must conform in the performance of his functions.2a Indeed, without a statutory declaration of
policy, the delegate would in effect, make or formulate such policy, which is the essence of every
law; and, without the aforementioned standard, there would be no means to determine, with
reasonable certainty, whether the delegate has acted within or beyond the scope of his
authority.2b Hence, he could thereby arrogate upon himself the power, not only to make the law,
but, also and this is worse to unmake it, by adopting measures inconsistent with the end
sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers
and the system of checks and balances, and, consequently, undermining the very foundation of our
Republican system.
Section 68 of the Revised Administrative Code does not meet these well settled requirements for a
valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate
any policy to be carried out or implemented by the President. Neither does it give a standard
sufficiently precise to avoid the evil effects above referred to. In this connection, we do not overlook
the fact that, under the last clause of the first sentence of Section 68, the President:
... may change the seat of the government within any subdivision to such place therein
as the public welfare may require.
It is apparent, however, from the language of this clause, that the phrase "as the public welfare
may require" qualified, not the clauses preceding the one just quoted, but only the place to which
the seat of the government may be transferred. This fact becomes more apparent when we
consider that said Section 68 was originally Section 1 of Act No. 1748,3 which provided that,
"whenever in the judgment of the Governor-General the public welfare requires, he may, by
executive order," effect the changes enumerated therein (as in said section 68), including the
change of the seat of the government "to such place ... as the public interest requires." The
opening statement of said Section 1 of Act No. 1748 which was not included in Section 68 of the
Revised Administrative Code governed the time at which, or the conditions under which, the
powers therein conferred could be exercised; whereas the last part of the first sentence of said
section referred exclusively to the place to which the seat of the government was to be transferred.
At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we
assumed that the phrase "as the public welfare may require," in said Section 68, qualifies all other
clauses thereof. It is true that inCalalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68
Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient
standards for a valid delegation of the authority to execute the law. But, the doctrine laid down in
these cases as all judicial pronouncements must be construed in relation to the specific facts

and issues involved therein, outside of which they do not constitute precedents and have no
binding effect.4 The law construed in the Calalang case conferred upon the Director of Public
Works, with the approval of the Secretary of Public Works and Communications, the power to issue
rules and regulations to promote safe transitupon national roads and streets. Upon the other hand,
the Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581, to issue
and cancel certificates or permits for the sale of speculative securities. Both cases involved grants
to administrative officers of powers related to the exercise of their administrative functions, calling
for the determination of questions of fact.
Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of
municipalities, is not an administrative function, but one which is essentially and eminently
legislative in character. The question of whether or not "public interest" demands the exercise of
such power is not one of fact. it is "purely a legislativequestion "(Carolina-Virginia Coastal Highway
vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or apolitical 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 aquestion of public policy and statecraft" (In re Village of North Milwaukee, 67 N.W.
1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting undue delegation of legislative
powers, state laws granting the judicial department, the power to determine whether certain
territories should be annexed to a particular municipality (Udall vs. Severn, supra, 258-359); or
vesting in a Commission the right to determine the plan and frame of government of proposed
villages and what functions shall be exercised by the same, although the powers and functions of
the village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or
conferring upon courts the authority to declare a given town or village incorporated, and designate
its metes and bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the
area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or
authorizing the territory of a town, containing a given area and population, to be incorporated as a
town, on certain steps being taken by the inhabitants thereof and on certain determination by a
court and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed to
determine whether the lands embraced in the petition "ought justly" to be included in the village,
and whether the interest of the inhabitants will be promoted by such incorporation, and to enlarge
and diminish the boundaries of the proposed village "as justice may require" (In re Villages of North
Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of Control which shall determine
whether or not the laying out, construction or operation of a toll road is in the "public interest" and
whether the requirements of the law had been complied with, in which case the board shall enter
an order creating a municipal corporation and fixing the name of the same (Carolina-Virginia
Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310).
Insofar as the validity of a delegation of power by Congress to the President is concerned, the case
of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The
Schechter case involved the constitutionality of Section 3 of the National Industrial Recovery Act
authorizing the President of the United States to approve "codes of fair competition" submitted to
him by one or more trade or industrial associations or corporations which "impose no inequitable
restrictions on admission to membership therein and are truly representative," provided that such
codes are not designed "to promote monopolies or to eliminate or oppress small enterprises and
will not operate to discriminate against them, and will tend to effectuate the policy" of said Act. The
Federal Supreme Court held:
To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without
precedent. It supplies no standards for any trade, industry or activity. It does not
undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For that legislative
undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims

of rehabilitation, correction and expansion described in Sec. 1. In view of the scope of

that broad declaration, and of the nature of the few restrictions that are imposed, the
discretion of the President in approving or prescribing codes, and thus enacting laws for
the government of trade and industry throughout the country, is virtually unfettered. We
think that the code making authority thus conferred is an unconstitutional delegation of
legislative power.
If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually
unfettered." and, consequently, tantamount to a delegation of legislative power, it is obvious that
"public welfare," which has even a broader connotation, leads to the same result. In fact, if the
validity of the delegation of powers made in Section 68 were upheld, there would no longer be any
legal impediment to a statutory grant of authority to the President to do anything which, in his
opinion, may be required by public welfare or public interest. Such grant of authority would be a
virtual abdication of the powers of Congress in favor of the Executive, and would bring about a total
collapse of the democratic system established by our Constitution, which it is the special duty and
privilege of this Court to uphold.
It may not be amiss to note that the executive orders in question were issued after the legislative
bills for the creation of the municipalities involved in this case had failed to pass Congress. A better
proof of the fact that the issuance of said executive orders entails the exercise of purely legislative
functions can hardly be given.
Again, Section 10 (1) of Article VII of our fundamental law ordains:
The President shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all local governments as may be provided by law, and
take care that the laws be faithfully executed.
The power of control under this provision implies the right of the President to interfere in the
exercise of such discretion as may be vested by law in the officers of the executive departments,
bureaus, or offices of the national government, as well as to act in lieu of such officers. This power
is denied by the Constitution to the Executive, insofar as local governments are concerned. With
respect to the latter, the fundamental law permits him to wield no more authority than that of
checking whether said local governments or the officers thereof perform their duties as provided by
statutory enactments. Hence, the President cannot interfere with local governments, so long as the
same or its officers act Within the scope of their authority. He may not enact an ordinance which
the municipal council has failed or refused to pass, even if it had thereby violated a duty imposed
thereto by law, although he may see to it that the corresponding provincial officials take appropriate
disciplinary action therefor. Neither may he vote, set aside or annul an ordinance passed by said
council within the scope of its jurisdiction, no matter how patently unwise it may be. He may not
even suspend an elective official of a regular municipality or take any disciplinary action against
him, except on appeal from a decision of the corresponding provincial board.5
Upon the other hand if the President could create a municipality, he could, in effect, remove any of
its officials, by creating a new municipality and including therein the barrio in which the official
concerned resides, for his office would thereby become vacant.6 Thus, by merely brandishing the
power to create a new municipality (if he had it), without actually creating it, he could compel local
officials to submit to his dictation, thereby, in effect, exercising over them the power of control
denied to him by the Constitution.
Then, also, the power of control of the President over executive departments, bureaus or offices
implies no morethan 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. In other words, Section 68 of the Revised Administrative Code does not merely
fail to comply with the constitutional mandate above quoted. Instead of giving the President less
power over local governments than that vested in him over the executive departments, bureaus or
offices, it reverses the process and does the exact opposite, by conferring upon him more power
over municipal corporations than that which he has over said executive departments, bureaus or
offices.
In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said
Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be
deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly
incompatible and inconsistent with said statutory enactment. 7
There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not
all the proper parties" referring to the officers of the newly created municipalities "have been
impleaded in this case," and (b) that "the present petition is premature."
As regards the first point, suffice it to say that the records do not show, and the parties do not
claim, that the officers of any of said municipalities have been appointed or elected and assumed
office. At any rate, the Solicitor General, who has appeared on behalf of respondent Auditor
General, is the officer authorized by law "to act and represent the Government of the Philippines,
its offices and agents, in any official investigation, proceeding or matter requiring the services of a
lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the
aforementioned municipalities, which involves a political, not proprietary, function, said local
officials, if any, are mere agents or representatives of the national government. Their interest in the
case at bar has, accordingly, been, in effect, duly represented.8
With respect to the second point, respondent alleges that he has not as yet acted on any of the
executive order & in question and has not intimated how he would act in connection therewith. It is,
however, a matter of common, public knowledge, subject to judicial cognizance, that the President
has, for many years, issued executive orders creating municipal corporations and that the same
have been organized and in actual operation, thus indicating, without peradventure of doubt, that
the expenditures incidental thereto have been sanctioned, approved or passed in audit by the
General Auditing Office and its officials. There is no reason to believe, therefore, that respondent
would adopt a different policy as regards the new municipalities involved in this case, in the
absence of an allegation to such effect, and none has been made by him.
WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and
the respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities above referred
to. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
Zaldivar, J., took no part.