Full Text Cases Admin Law

12/11/2019 Administrative Law Cases
MAKATI STOCK EXCHANGE, INC. v. SEC and MSE

G.R. No. L-23004, June 30, 1965
BENGZON, C.J.:
DOCTRINE:
This is a review of the resolution of the Securities and Exchange Commission which would deny the
Makati Stock Exchange, Inc., permission to operate a stock exchange unless it agreed not to list for
trading on its board, securities already listed in the Manila Stock Exchange.
Objecting to the requirement, Makati Stock Exchange, Inc. contends that the Commission has no
power to impose it and that, anyway, it is illegal, discriminatory and unjust.
Under the law, no stock exchange may do business in the Philippines unless it is previously
registered with the Commission by filing a statement containing the information described in Sec. 17
of the Securities Act (Commonwealth Act 83, as amended).
It is assumed that the Commission may permit registration if the section is complied with; if not, it
may refuse. And there is now no question that the section has been complied with, or would be
complied with, except that the Makati Stock Exchange, upon challenging this particular requirement
of the Commission (rule against double listing) may be deemed to have shown inability or refusal to
abide by its rules, and thereby to have given ground for denying registration. [Sec. 17 (a) (1) and
(d)].
Apparently, the Commission acted "in the public interest." 3 Hence, it is pertinent to inquire whether
the Commission may "in the public interest" prohibit (or make impossible) the establishment of
another stock exchange (besides the Manila Stock Exchange), on the ground that the operation of
two or more exchanges adversely affects the public interest.
At first glance, the answer should be in the negative, because the law itself contemplated, and,
therefore, tacitly permitted or tolerated at least, the operation of two or more exchanges.
Wherever two or more exchanges exist, the Commission, by order, shall require and enforce
uniformity of trading regulations in and/or between said exchanges. [Emphasis Ours] (Sec.
28b-13, Securities Act.)
In fact, as admitted by respondents, there were five stock exchanges in Manila, before the Pacific
War (p. 10, brief), when the Securities Act was approved or amended. (Respondent Commission
even admits that dual listing was practiced then.) So if the existence of more than one exchange
were contrary to public interest, it is strange that the Congress having from time to time enacted
legislation amending the Securities Act, 4 has not barred multiplicity of exchanges.
Forgetting for the moment the monopolistic aspect of the Commission's resolution, let us examine
the authority of the Commission to promulgate and implement the rule in question.
It is fundamental that an administrative officer has only such powers as are expressly granted to him
by the statute, and those necessarily implied in the exercise thereof.
In its brief and its resolution now subject to review, the Commission cites no provision expressly
supporting its rule. Nevertheless, it suggests that the power is "necessary for the execution of the
functions vested in it"; but it makes no explanation, perhaps relying on the reasons advanced in
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support of its position that trading of the same securities in two or more stock exchanges, fails to
give protection to the investors, besides contravening public interest. (Of this, we shall treat later) .
On the legality of its rule, the Commission's argument is that: (a) it was approved by the Department
Head — before the War; and (b) it is not in conflict with the provisions of the Securities Act. In our
opinion, the approval of the Department, 5 by itself, adds no weight in a judicial litigation; and the test
is not whether the Act forbids the Commission from imposing a prohibition, but whether
it empowers the Commission to prohibit. No specific portion of the statute has been cited to uphold
this power. It is not found in sec. 28 (of the Securities Act), which is entitled "Powers (of the
Commission) with Respect to Exchanges and Securities." 6
According to many court precedents, the general power to "regulate" which the Commission has
(Sec. 33) does not imply authority to prohibit." 7
The Manila Stock Exchange, obviously the beneficiary of the disputed rule, contends that the power
may be inferred from the express power of the Commission to suspend trading in a security, under
said sec. 28 which reads partly:
And if in its opinion, the public interest so requires, summarily to suspend trading in any
registered security on any securities exchange ... . (Sec. 28[3], Securities Act.)
However, the Commission has not acted — nor claimed to have acted — in pursuance of such
authority, for the simple reason that suspension under it may only be for ten days. Indeed, this
section, if applicable, precisely argues against the position of the Commission because the
"suspension," if it is, and as applied to Makati Stock Exchange, continues for an indefinite period, if
not forever; whereas this Section 28 authorizes suspension for ten days only. Besides, the
suspension of trading in the security should not be on one exchange only, but on all exchanges;
bearing in mind that suspension should be ordered "for the protection of investors" (first par., sec.
28) in all exchanges, naturally, and if "the public interest so requires" [sec. 28(3)].
This brings up the Commission's principal conclusions underlying its determination viz.: (a) that the
establishment of another exchange in the environs of Manila would be inimical to the public interest;
and (b) that double or multiple listing of securities should be prohibited for the "protection of the
investors."
(a) Public Interest — Having already adverted to this aspect of the matter, and the emerging
monopoly of the Manila Stock Exchange, we may, at this juncture, emphasize that by restricting free
competition in the marketing of stocks, and depriving the public of the advantages thereof the
Commission all but permits what the law punishes as monopolies as "crimes against public
interest." 8
"A stock exchange is essentially monopolistic," the Commission states in its resolution (p. 14-a,
Appendix, Brief for Petitioner). This reveals the basic foundation of the Commission's process of
reasoning. And yet, a few pages afterwards, it recalls the benefits to be derived "from the existence
of two or more exchanges," and the desirability of "a healthy and fair competition in the securities
market," even as it expresses the belief that "a fair field of competition among stock exchanges
should be encouraged only to resolve, paradoxically enough, that Manila Stock Exchange shall, in
effect, continue to be the only stock exchange in Manila or in the Philippines.
"Double listing of a security," explains the Commission, "divides the sellers and the buyers, thus
destroying the essence of a stock exchange as a two-way auction market for the securities, where
all the buyers and sellers in one geographical area converge in one defined place, and the bidders
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compete with each other to purchase the security at the lowest possible price and those seeking to
sell it compete with each other to get the highest price therefor. In this sense, a stock exchange is
essentially monopolistic."
Inconclusive premises, for sure. For it is debatable whether the buyer of stock may get the lowest
price where all the sellers assemble in only one place. The price there, in one sale, will tend to fix the
price for the succeeding, sales, and he has no chance to get a lower price except at another stock
exchange. Therefore, the arrangement desired by the Commission may, at most, be beneficial to
sellers of stock — not to buyers — although what applies to buyers should obtain equally as to
sellers (looking for higher prices). Besides, there is the brokerage fee which must be considered. Not
to mention the personality of the broker.
(b) Protection of investors. — At any rate, supposing the arrangement contemplated is beneficial to
investors (as the Commission says), it is to be doubted whether it is "necessary" for their "protection"
within the purview of the Securities Act. As the purpose of the Act is to give adequate and effective
protection to the investing public against fraudulent representations, or false promises and the
imposition of worthless ventures, 9 it is hard to see how the proposed concentration of the market has
a necessary bearing to the prevention of deceptive devices or unlawful practices. For it is not mere
semantics to declare that acts for the protection of investors are necessarily beneficial to them; but
not everything beneficial to them is necessary for their protection.
And yet, the Commission realizes that if there were two or more exchanges "the same security may
sell for more in one exchange and sell for less in the other. Variance in price of the same security
would be the rule ... ." Needless to add, the brokerage rates will also differ.
This, precisely, strengthens the objection to the Commission's ruling. Such difference in prices and
rates gives the buyer of shares alternative options, with the opportunity to invest at lower expense;
and the seller, to dispose at higher prices. Consequently, for the investors' benefit (protection is not
the word), quality of listing 10 should be permitted, nay, encouraged, and other exchanges allowed to
operate. The circumstance that some people "made a lot of money due to the difference in prices of
securities traded in the stock exchanges of Manila before the war" as the Commission noted,
furnishes no sufficient reason to let one exchange corner the market. If there was undue
manipulation or unfair advantage in exchange trading the Commission should have other means to
correct the specific abuses.
Granted that, as the Commission observes, "what the country needs is not another" market for
securities already listed on the Manila Stock Exchange, but "one that would focus its attention and
energies on the listing of new securities and thus effectively help in raising capital sorely needed by
our ... unlisted industries and enterprises."
Nonetheless, we discover no legal authority for it to shore up (and stifle) free enterprise and
individual liberty along channels leading to that economic desideratum. 11
The Legislature has specified the conditions under which a stock exchange may legally obtain a
permit (sec. 17, Securities Act); it is not for the Commission to impose others. If the existence of two
competing exchanges jeopardizes public interest — which is doubtful — let the Congress
speak. 12 Undoubtedly, the opinion and recommendation of the Commission will be given weight by
the Legislature, in judging whether or not to restrict individual enterprise and business opportunities.
But until otherwise directed by law, the operation of exchanges should not be so regulated as
practically to create a monopoly by preventing the establishment of other stock exchanges and
thereby contravening:
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(a) the organizers' (Makati's) Constitutional right to equality before the law;
(b) their guaranteed civil liberty to pursue any lawful employment or trade; and
(c) the investor's right to choose where to buy or to sell, and his privilege to select the
brokers in his employment. 13
And no extended elucidation is needed to conclude that for a licensing officer to deny license solely
on the basis of what he believes is best for the economy of the country may amount to regimentation
or, in this instance, the exercise of undelegated legislative powers and discretion.
Thus, it has been held that where the licensing statute does not expressly or impliedly authorize the
officer in charge, he may not refuse to grant a license simply on the ground that a sufficient number
of licenses to serve the needs of the public have already been issued. (53 C.J.S. p. 636.)
Concerning res judicata. — Calling attention to the Commission's order of May 27, 1963, which
Makati Stock did not appeal, the Manila Stock Exchange pleads the doctrine of res judicata. 14 (The
order now reviewed is dated May 7, 1964.)
It appears that when Makati Stock Exchange, Inc. presented its articles of incorporation to the
Commission, the latter, after making some inquiries, issued on May 27, 1963, an order reading as
follows.
Let the certificate of incorporation of the MAKATI STOCK EXCHANGE be issued, and if the
organizers thereof are willing to abide by the foregoing conditions, they may file the proper
application for the registration and licensing of the said Exchange.
In that order, the Commission advanced the opinion that "it would permit the establishment and
operation of the proposed Makati Stock Exchange, provided ... it shall not list for trading on its board,
securities already listed in the Manila Stock Exchange ... ."
Admittedly, Makati Stock Exchange, Inc. has not appealed from that order of May 27, 1963. Now,
Manila Stock insists on res judicata.
Why should Makati have appealed? It got the certificate of incorporation which it wanted. The
condition or proviso mentioned would only apply if and when it subsequently filed the application for
registration as stock exchange. It had not yet applied. It was not the time to question the
condition; 15 Makati was still exploring the convenience of soliciting the permit to operate subject to
that condition. And it could have logically thought that, since the condition did not affect its articles of
incorporation, it should not appeal the order (of May 27, 1963) which after all, granted the certificate
of incorporation (corporate existence) it wanted at that time.
And when the Makati Stock Exchange finally found that it could not successfully operate with the
condition attached, it took the issue by the horns, and expressing its desire for registration and
license, it requested that the condition (against double listing) be dispensed with. The order of the
Commission denying, such request is dated May 7, 1964, and is now under, review.
Indeed, there can be no valid objection to the discussion of this issue of double listing
now, 16 because even if the Makati Stock Exchange, Inc. may be held to have accepted the
permission to operate with the condition against double listing (for having failed to appeal the order
4
of May 27, 1963), still it was not precluded from afterwards contesting 17 the validity of such condition
or rule:
(1) An agreement (which shall not be construed as a waiver of any constitutional right or any right to
contest the validity of any rule or regulation) to comply and to enforce so far as is within its powers,
compliance by its members, with the provisions of this Act, and any amendment thereto, and any
rule or regulation made or to be made thereunder. (See. 17-a-1, Securities Act [Emphasis Ours].)
Surely, this petition for review has suitably been coursed. And making reasonable allowances for the
presumption of regularity and validity of administrative action, we feel constrained to reach the
conclusion that the respondent Commission possesses no power to impose the condition of the rule,
which, additionally, results in discrimination and violation of constitutional rights.
ACCORDINGLY, the license of the petition to operate a stock exchange is approved without such
condition. Costs shall be paid by the Manila Stock Exchange. So ordered.
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 85439 January 13, 1992
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG

BAYAN NG MUNTINLUPA, INC. (KBMBPM), TERESITA A. FAJARDO, NADYESDA B.
PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S. FRANCISCO, AMADO V.
MANUEL and ROLANDO G. GARCIA, incumbent members of the Board, AMADO G. PEREZ
and MA. FE V. BOMBASE, incumbent General Manager and Secretary-Treasurer,
respectively, petitioners,
vs.
HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional Director of Region IV of
the Department of Agriculture ROGELIO P. MADRIAGA, RECTO CORONADO and Municipal
Mayor IGNACIO R. BUNYE, both in his capacity as Municipal Mayor of Muntinlupa, Metro
Manila and as Presiding Officer of Sangguniang Bayan ng Muntinglupa, and JOHN
DOES, respondents.
G.R. No. 91927 January 13, 1992
IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E. AGUINALDO,

ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO B.
CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO, ROGER SMITH, RUFINO B.
JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and NESTOR SANTOS, petitioners,
vs.
THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special Prosecutor
III, respondents.
Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R. No. 85439.
5
Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.
DAVIDE, JR., J.:
These cases have been consolidated because they are closely linked with each other as to factual
antecedents and issues.
The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case), questions the
validity of the order of 28 October 1988 of then Secretary of Agriculture Hon. Carlos G. Dominguez
which ordered: (1) the take-over by the Department of Agriculture of the management of the
petitioner Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda ng Bagong Pamilihang Bayan ng
Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory and supervisory powers under
Section 8 of P.D. No. 175, as amended, and Section 4 of Executive Order No. 13, (2) the creation of
a Management Committee which shall assume the management of KBMBPM upon receipt of the
order, (3) the disbandment of the Board of Directors, and (4) the turn over of all assets, properties
and records of the KBMBPM the Management Committee.
The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks the nullification
of the Resolution of 4 January 1990 of the Sandiganbayan admitting the Amended Information
against petitioners in Criminal Case No. 13966 and denying their motion to order or direct
preliminary investigation, and its Resolution of 1 February 1990 denying the motion to reconsider the
former.
The procedural and factual antecedents are not disputed.
On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality), Metro

Manila, thru its then Mayor Santiago Carlos, Jr., entered into a contract with the KILUSANG BAYAN
SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG PAMILIHANG BAYAN NG
MUNTINLUPA, INC. (KBMBPM) represented by its General Manager, Amado Perez, for the latter's
management and operation of the new Muntinlupa public market. The contract provides for a twenty-
five (25) year term commencing on 2 September 1985, renewable for a like period, unless sooner
terminated and/or rescinded by mutual agreement of the parties, at a monthly consideration of
Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM within the first five (5) days of
each month which shall, however, be increased by ten percent (10%) each year during the first five
(5) years only. 1
The KBMBPM is a service cooperative organized by and composed of vendors occupying the New
Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential Decree No.
175 and Letter of Implementation No. 23; its articles of incorporation and by-laws were registered
with the then Office of the Bureau of Cooperatives Development (thereafter the Bureau of
Agricultural Cooperatives Development or BACOD and now the Cooperative Development
Authority). 2
Following his assumption into office as the new mayor succeeding Santiago Carlos, Jr., petitioner
Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-year term of the agreement,
contrary to the provision of Section 143, paragraph 3 of Batas Pambansa Blg. 337," and the
"patently inequitable rental," directed a review of the aforesaid contract. 3 He sought opinions from
both the Commission on Audit and the Metro Manila Commission (MMC) on the validity of the
instrument. In separate letters, these agencies urged that appropriate legal steps be taken towards
its rescission. The letter of Hon. Elfren Cruz of the MMC even granted the Municipality authority "to
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take the necessary legal steps for the cancellation/recission of the above cited contract and make
representations with KBMBPM for the immediate transfer/takeover of the possession, management
and operation of the New Muntinlupa Market to the Municipal Government of Muntinlupa." 4
Consequently, upon representations made by Bunye with the Municipal Council, the latter approved
on 1 August 1988 Resolution No. 45 abrogating the contract. To implement this resolution, Bunye,
together with his co-petitioners and elements of the Capital Command of the Philippine
Constabulary, proceeded, on 19 August 1986, to the public market and announced to the general
public and the stallholders thereat that the Municipality was taking over the management and
operation of the facility, and that the stallholders should henceforth pay their market fees to the
Municipality, thru the Market Commission, and no longer to the KBMBPM. 5
On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of Makati a
complaint for breach of contract, specific performance and damages with prayer for a writ of
preliminary injunction against the Municipality and its officers, which was docketed as Civil Case No.
88-1702. 6 The complaint was premised on the alleged illegal take-over of the public market effected
"in excess of his (Bunye's) alleged authority" and thus "constitutes breach of contract and duty as a
public official."
The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts of Bunye and
company to complete the take-over; they continued holding office in the KBS building, under their
respective official capacities. The matter having been elevated to this Court by way of certiorari, 8 We
remanded the same to the Court of Appeals which docketed it as C.A.-G.R. No. L-16930. 9
On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-complaint
charging Bunye and his co-petitioners with oppression, harassment, abuse of authority and violation
of the Anti-Graft and Corrupt Practices Act 10 for taking over the management and operation of the
public market from KBMBPM. 11
In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of the Special
Prosecutor directed Bunye and his co-petitioners to submit within ten (10) days from receipt thereof
counter-affidavits, affidavits of their witnesses and other supporting documents. 12 The subpoena and
letter-complaint were received on 12 October 1988.
On 20 October 1988, two (2) days before the expiration of the period granted to file said documents,
Bunye, et al. filed by mail an urgent motion for extension of "at least fifteen (15) days from October
22, 1988" within which to comply 13 with the subpoena.
Thereafter, the following transpired which subsequently gave rise to these petitions:
G.R. No. 85439
In the early morning of 29 October 1988, a Saturday, respondent Madriaga and Coronado, allegedly
accompanied by Mayor Bunye and the latters' heavily armed men, both in uniform and in civilian
clothes, together with other civilians, namely: Romulo Bunye II, Alfredo Bunye, Tomas Osias,
Reynaldo Camilon, Benjamin Taguibao, Benjamin Bulos and other unidentified persons, allegedly
through force, violence and intimidation, forcibly broke open the doors of the offices of petitioners
located at the second floor of the KBS Building, new Muntinlupa Public Market, purportedly to serve
upon petitioners the Order of respondent Secretary of Agriculture dated 28 October 1988, and to
implement the same, by taking over and assuming the management of KBMBPM, disbanding the
then incumbent Board of Directors for that purpose and excluding and prohibiting the General
7
Manager and the other officers from exercising their lawful functions as such. 14 The Order of the
Secretary reads as follows: 15
ORDER
WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA

NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), Alabang,
Muntinlupa, Metro Manila is a Cooperative registered under the provisions of
Presidential Decree No. 175, as amended;
WHEREAS, the Department of Agriculture is empowered to regulate and supervise

cooperatives registered under the provisions of Presidential Decree No. 175, as
amended;
WHEREAS, the general membership of the KBMBPM has petitioned the Department
of Agriculture for assistance in the removal of the members of the Board of Directors
who were not elected by the general membership of said cooperative;
WHEREAS, the on-going financial and management audit of the Department of

Agriculture auditors show (sic) that the management of the KBMBPM is not operating
that cooperative in accordance with PD. 175, LOI No. 23, the Circulars issued by
DA/BACOD and the provisions of the by-laws of KBMBPM;
WHEREAS, the interest of the public so demanding it is evident and urgently

necessary that the KBMBPM MUST BE PLACED UNDER MANAGEMENT TAKE-
OVER of the Department of Agriculture in order to preserve the financial interest of
the members of the cooperative and to enhance the cooperative development
program of the government;
WHEREAS, it is ordered that the Department of Agriculture in the exercise of its

regulatory and supervisory powers under Section 8 of PD 175, as amended, and
Section 4 of Executive Order No. 113, take over the management of KBMBPM under
the following directives:
1. THAT a Management Committee is hereby created composed of

the following:
a) Reg. Dir. or OIC RD — DA Region IV
b) Atty. Rogelio P. Madriaga — BACOD
c) Mr. Recto Coronado — KBMBPM
d) Mrs. Nadjasda Ponsones — KBMBPM
e) One (1) from the Municipal Government of Muntinlupa to be

designated by the Sangguniang Pambayan ng Muntinlupa;
2. THAT the Management Committee shall, upon receipt of this

Order, assume the management of KBMBPM;
8
3. THAT the present Board of Directors is hereby disbanded and the

officers and Manager of the KBMBPM are hereby directed to turnover
all assets, properties and records of the KBMBPM to the
Management Committee herein created;
4. THAT the Management Committee is hereby empowered to

promulgate rules of procedure to govern its workings as a body;
5. THAT the Management Committee shall submit to the undersigned

thru the Director of BACOD monthly reports on the operations of
KBMBPM;
6. THAT the Management Committee shall call a General Assembly

of all registered members of the KBMBPM within Ninety (90) days
from date of this Order to decide such matters affecting the
KBMBPM, including the election of a new set of Board of Director
(sic).
This Order takes effect immediately and shall continue to be in force until the
members of the Board of Directors shall have been duly elected and qualified.
Done this 28th day of October, 1988 at Quezon City.
As claimed by petitioners, the Order served on them was not written on the stationary of the
Department, does not bear its seal and is a mere xerox copy.
The so-called petition upon which the Order is based appears to be an unverified petition dated 10
October 1988 signed, according to Mayor Bunye, 16 by 371 members of the KBMBPM.
On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that:
(a) Respondent Secretary acted without or in excess of jurisdiction in issuing the

Order for he arrogated unto himself a judicial function by determining the alleged guilt
of petitioners on the strength of a mere unverified petition; the disbandment of the
Board of Directors was done without authority of law since under Letter of
Implementation No. 23, removal of officers, directors or committee members could
be done only by the majority of the members entitled to vote at an annual or special
general assembly and only after an opportunity to be heard at said assembly.
(b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic

manner, so patent and gross that it amounted to a grave abuse of discretion.
(c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise illegal
and unlawful for it allows or tolerates the violation of the penal provisions under
paragraph (c), Section 9 of P.D. No. 175.
(d) The Order is a clear violation of the constitutional right of the individual petitioners
to be heard. 17
They pray that upon the filing of the petition, respondents, their agents, representatives or persons
acting on their behalf be ordered to refrain, cease and desist from enforcing and implementing the
9
questioned Order or from excluding the individual petitioners from the exercise of their rights as such
officers and, in the event that said acts sought to be restrained were already partially or wholly done,
to immediately restore the management and operation of the public market to petitioners, order
respondents to vacate the premises and, thereafter, preserve the status quo; and that, finally, the
challenged Order be declared null and void.
In the Resolution of 9 October 1988, 18 We required the respondents to Comment on the petition.
Before any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion
praying that respondent Atty. Rogelio Madriaga, who had assumed the position of Chairman of the
Management Committee, be ordered to stop and/or cancel the scheduled elections of the officers of
the KBMBPM on 6 January 1989 and, henceforth, desist from scheduling any election of officers or
Members of the Board of Directors thereof until further orders on the Court. 19 The elections were,
nevertheless, held and a new board of directors was elected. So, on 19 January 1989, petitioners
filed a supplemental motion 20 praying that respondent Madriaga and the "newly elected Board of
Directors be ordered to cease and desist from assuming, performing or exercising powers as such,
and/or from removing or replacing the counsels of petitioners as counsels for KBMBPM and for Atty.
Fernando Aquino, Jr., to cease and desist from unduly interfering with the affairs and business of the
cooperative."
Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies the factual
allegations in the petition and claims that petitioners failed to exhaust administrative remedies. A
reply thereto was filed by petitioners on 7 February 1989. 22
Respondent Recto Coronado filed two (2) Comments. The first was filed on 6 February 1989 23 by his
counsel, Atty. Fernando Aquino, Jr., and the second, which is for both him and Atty. Madriaga, was
filed by the latter on 10 February 1989. 24
On 20 February 1989, petitioners filed a Reply to the first Comment of Coronado 25 and an Ex-
Parte Motion for the immediate issuance of a cease and desist order 26 praying that the so-called new
directors and officers of KBMBPM, namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino Moldez,
Fortunato M. Medina, Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to
immediately cease and desist from filing notices of withdrawals or motions to dismiss cases filed by
the Cooperative now pending before the courts, administrative offices and the Ombudsman and
Tanodbayan, and that if such motions or notices were already filed, to immediately withdraw and
desist from further pursuing the same until further orders of this Court. The latter was precipitated by
the Resolution No. 19 of the "new" board of directors withdrawing all cases filed by its predecessors
against Bunye, et al., and more particularly the following cases: (a) G.R. No. 85439 (the instant
petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110 before the Ombudsman, (d) IBP
Case No. 88-0119 before the Tanodbayan, and Civil Case No. 88-118 for Mandamus. 27
On 1 March 1989, We required the Solicitor General to file his Comment to the petition and the
urgent motion for the immediate issuance of a cease and desist order. 28
A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April 1989, We resolved
to dismiss the case and consider it closed and terminated. 30 Thereupon, after some petitioners filed
a motion for clarification and reconsideration, We set aside the dismissal order and required the new
directors to comment on the Opposition to Motion to Dismiss filed by the former. 31
The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and Opposition dated
9 June 1989, earlier submitted it response to petitioners' motion for reconsideration of the order
dismissing the instant petition, be treated as its Comment. 32 Both parties then continued their legal
fencing, serving several pleadings on each other.
10
In Our Resolution of 9 August 1989, 33 We gave the petition due course and required the parties to
submit their respective Memoranda.
On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate issuance of a
cease and desist order 34 in view of the new board's plan to enter into a new management contract;
the motion was noted by this Court on 23 August 1989. A second ex-parte motion, noted on 18
October 1989, was filed on 19 September 1989 asking this court to consider the "Invitation to pre-
qualify and bid" for a new contract published by respondent Bunye. 35
In a belated Comment 36 for the respondent Secretary of Agriculture filed on 22 September 1989, the
Office of the Solicitor General asserts that individual petitioners, who were not allegedly elected by
the members or duly designated by the BACOD Director, have no right or authority to file this case;
the assailed Order of the Secretary was issued pursuant to P.D. No. 175, more particularly Section 8
thereof which authorizes him "(d) to suspend the operation or cancel the registration of any
cooperative after hearing and when in its judgment and based on findings, such cooperative is
operating in violation of this Decree, rules and regulations, existing laws as well as the by-laws of the
cooperative itself;" the Order is reasonably necessary to correct serious flaws in the cooperative and
provide interim measures until election of regular members to the board and officers thereof; the
elections conducted on 6 January 1989 are valid; and that the motion to dismiss filed by the new
board of directors binds the cooperative. It prays for the dismissal of the petition.
Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the

Comment submitted by the Office of the Solicitor General as his memorandum; 37 petitioners and
respondents Coronado and Madriaga filed their separate Memoranda on 6 November 1989; 38 while
the new board of directors submitted its Memorandum on 11 December 1989. 39
The new KBMBPM board submitted additional pleadings on 16 February 1990 which it deemed
relevant to the issues involved herein. Reacting, petitioners filed a motion to strike out improper and
inadmissible pleadings and annexes and sought to have the pleaders cited for contempt. Although
We required respondents to comment, the latter did not comply.
Nevertheless, a manifestation was filed by the same board on 25 February 1991 40 informing this
Court of the holding, on 9 January 1991, of its annual general assembly and election of its board of
directors for 1991. It then reiterates the prayer that the instant petition be considered withdrawn and
dismissed. Petitioners filed a counter manifestation alleging that the instant petition was already
given due course on 9 August 1989. 41 In its traverse to the counter manifestation, the new board
insists that it "did not derive authority from the October 28, 1988 Order, the acts of the Management
Committee, nor (sic) from the elections held in (sic) January 6, 1989," but rather from the members
of the cooperative who elected them into office during the elections.
Petitioners filed a rejoinder asserting that the election of new directors is not a supervening event
independent of the main issue in the present petition and that to subscribe to the argument that the
issues in the instant petition became moot with their assumption into office is to reward a wrong
done.
G. R. NO. 91927
Petitioners claim that without ruling on their 20 October 1988 motion for an extension of at last 15
days from 22 October 1988 within which to file their counter-affidavits, which was received by the
Office of the Special Prosecutor on 3 November 1988, Special Prosecutor Onos promulgated on 11
November 1988 a Resolution finding the evidence on hand sufficient to establish a prima facie case
against respondents (herein petitioners) and recommending the filing of the corresponding
11
information against them before the Sandiganbayan. 42 Petitioners also claim that they submitted
their counter-affidavits on 9 November 1988. 43
In their motion dated 2 December 1988, petitioners move for a reconsideration of the above
Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The information against the
petitioners was attached to this order.
Upon submission of the records for his approval, the Ombudsman issued a first indorsement on 4
April 1989 referring to "Judge Gualberto J. de la Llana, Acting Director , IEO/RSSO, this Office, the
within records of OSP Case No. 88-02110 . . . for further preliminary investigation . . ." 46
Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la Llana requiring
them to appear before the latter on 25 April 1989, 47 submit a report and file comment. After being
granted an extension, Bunye and company submitted their comment on 18 May 1989. 48
On 22 August 1989, de la Llana recommended the filing of an information for violation of section 3
(e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred to special prosecuting officer
Jose Parentela, Jr. who, in his Memorandum 50 to the Ombudsman through the Acting Special
Prosecutor, likewise urged that an information be filed against herein petitioners. On 3 October
1989, the Ombudsman signed his conformity to the Memorandum and approved the 18 January
information prepared by Onos, which was then filed with the Sandiganbayan.
Consequently, Bunye, et al. were served arrest warrants issued by the Sandiganbayan. Detained at
the NBI on 9 October 1989, they claim to have discovered only then the existence of documents
recommending and approving the filing of the complaint and a memorandum by special prosecutor
Bernardita G. Erum proposing the dismissal of the same. 51
Arraignment was set for 18 October 1989. 52
However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus Motion to
Remand to the Office of the Ombudsman; to Defer Arraignment and to Suspend Proceedings." 53
Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated

Manifestation and Supplemental Motion 54 praying, inter alia, for the quashal of the information on the
ground that they were deprived of their right to a preliminary investigation and that the information
did not charge an offense.
The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and directing the
parties to submit their respective memoranda, 55 which petitioners complied with on 2 November
1989. 56 On 16 November 1989, special Prosecutor Berbano filed a motion to admit amended
information. 57
On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for lack of merit
the Omnibus Motion to Remand the Case To The Office of the Ombudsman, to Defer Arraignment
and to Suspend Proceedings. Petitioners then filed a motion to order a preliminary investigation 59 on
the basis of the introduction by the amended information of new, material and substantive
allegations, which the special prosecutor opposed, 60 thereby precipitating a rejoinder filed by
petitioners. 61
On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the Amended
Information and denying the motion to direct preliminary investigation. Their motion to reconsider this
12
Resolution having been denied in the Resolution of 1 February 1990, 63 petitioners filed the instant
petition on 12 February 1990.
Petitioners claim that respondent Sandiganbayan acted without or in excess of jurisdiction or with
manifest grave abuse of discretion amounting to lack of jurisdiction in denying petitioners their right
to preliminary investigation and in admitting the Amended Information.
They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the Sandiganbayan,
admitting the amended information and denying the motion for reconsideration, respectively, be
annulled; (b) a writ be issued enjoining the Sandiganbayan from proceeding further in Criminal Case
No. 13966; and (c) respondents be enjoined from pursuing further actions in the graft case.
We required the respondents to Comment on the petition.
On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta and Rey E. Dulay
as petitioners, 64 and in the Comment they filed on 30 March 1990, in compliance with Our Resolution
of 1 March 1990, they state that they do not interpose any objection to the motion.
On 20 March 1990, the Office of the Solicitor General moved that it be excused from filing comment
for the respondents as it cannot subscribe to the position taken by the latter with respect to the
questions of law involved. 65 We granted this motion in the resolution of 8 May 1990.
Respondent Berbano filed his comment on 10 September 1991 and petitioners replied on 20
December 1990; Berbano subsequently filed a Rejoinder thereto on 11 January 1991. 66 The
Sandiganbayan then filed a manifestation proposing that it be excused from filing comment as its
position
on the matters in issue is adequately stated in the resolutions sought to be annulled. 67 On 7 March
1991, We resolved to note the manifestation and order the instant petition consolidated with G.R.
No. 85439.
The present dispute revolves around the validity of the antecedent proceedings which led to the filing
of the original information on 18 January 1989 and the amended information afterwards.
THE ISSUES AND THEIR RESOLUTION
1. G. R. No. 85439.
As adverted to in the introductory portion of this Decision, the principal issue in G.R. No. 85439 is
the validity of the 28 October 1988 Order of respondent Secretary of Agriculture. The exordium of
said Order unerringly indicates that its basis is the alleged petition of the general membership of the
KBMBPM requesting the Department for assistance "in the removal of the members of the Board of
Directors who were not elected by the general membership" of the cooperative and that the "ongoing
financial and management audit of the Department of Agriculture auditors show (sic) that the
management of the KBMBPM is not operating that cooperative in accordance with P.D. 175, LOI 23,
the Circulars issued by DA/BACOD and the provisions and by-laws of KBMBPM." It is also
professed therein that the Order was issued by the Department "in the exercise of its regulatory and
supervisory powers under Section 8 of P.D. 175, as amended, and Section 4 of Executive Order No.
113."
13
Respondents challenge the personality of the petitioners to bring this action, set up the defense of
non-exhaustion of administrative remedies, and assert that the Order was lawfully and validly issued
under the above decree and Executive Order.
We find merit in the petition and the defenses interposed do not persuade Us.
Petitioners have the personality to file the instant petition and ask, in effect, for their reinstatement as
Section 3, Rule 65 of the Rules of Court, defining an action for mandamus, permits a person who
has been excluded from the use and enjoyment of a right or office to which he is entitled, to file
suit. 68 Petitioners, as ousted directors of the KBMBPM, are questioning precisely the act of
respondent Secretary in disbanding the board of directors; they then pray that this Court restore
them to their prior stations.
As to failure to exhaust administrative remedies, the rule is well-settled that this requirement does
not apply where the respondent is a department secretary whose acts, as an alter ego of the
President, bear the implied approval of the latter, unless actually disapproved by him. 69 This doctrine
of qualified political agency ensures speedy access to the courts when most needed. There was no
need then to appeal the decision to the office of the President; recourse to the courts could be had
immediately. Moreover, the doctrine of exhaustion of administrative remedies also yields to other
exceptions, such as when the question involved is purely legal, as in the instant case, 70 or where the
questioned act is patently illegal, arbitrary or oppressive. 71 Such is the claim of petitioners which, as
hereinafter shown, is correct.
And now on the validity of the assailed Order.
Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175) provides the
procedure for the removal of directors or officers of cooperatives, thus:
An elected officer, director or committee member may be removed by a vote of

majority of the members entitled to vote at an annual or special general assembly.
The person involved shall have an opportunity to be heard.
A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-laws, reads:
Sec. 17. Removal of Directors and Committee Members. — Any elected director or
committee member may be removed from office for cause by a majority vote of the
members in good standing present at the annual or special general assembly called
for the purpose after having been given the opportunity to be heard at the assembly.
Under the same article are found the requirements for the holding of both the annual general
assembly and a special general assembly.
Indubitably then, there is an established procedure for the removal of directors and officers of
cooperatives. It is likewise manifest that the right to due process is respected by the express
provision on the opportunity to be heard. But even without said provision, petitioners cannot be
deprived of that right.
The procedure was not followed in this case. Respondent Secretary of Agriculture arrogated unto
himself the power of the members of the KBMBPM who are authorized to vote to remove the
petitioning directors and officers. He cannot take refuge under Section 8 of P.D. No. 175 which
14
grants him authority to supervise and regulate all cooperatives. This section does not give him that
right.
An administrative officer has only such powers as are expressly granted to him and those
necessarily implied in the exercise thereof. 72 These powers should not be extended by implication
beyond what may to necessary for their just and reasonable execution. 73
Supervision and control include only the authority to: (a) act directly whenever a specific function is
entrusted by law or regulation to a subordinate; (b) direct the performance of duty; restrain the
commission of acts; (c) review, approve, reverse or modify acts and decisions of subordinate
officials or
units; (d) determine priorities in the execution of plans and programs; and (e) prescribe standards,
guidelines, plans and programs. Specifically, administrative supervision is limited to the authority of
the department or its equivalent to: (1) generally oversee the operations of such agencies and insure
that they are managed effectively, efficiently and economically but without interference with day-to-
day activities; (2) require the submission of reports and cause the conduct of management audit,
performance evaluation and inspection to determine compliance with policies, standards and
guidelines of the department; (3) take such action as may be necessary for the proper performance
of official functions, including rectification of violations, abuses and other forms of mal-administration;
(4) review and pass upon budget proposals of such agencies but may not increase or add to them. 74
The power to summarily disband the board of directors may not be inferred from any of the foregoing
as both P.D. No. 175 and the by-laws of the KBMBPM explicitly mandate the manner by which
directors and officers are to be removed. The Secretary should have known better than to disregard
these procedures and rely on a mere petition by the general membership of the KBMBPM and an
on-going audit by Department of Agriculture auditors in exercising a power which he does not have,
expressly or impliedly. We cannot concede to the proposition of the Office of the Solicitor General
that the Secretary's power under paragraph (d), Section 8 of P.D. No. 175 above quoted to suspend
the operation or cancel the registration of any cooperative includes the "milder authority of
suspending officers and calling for the election of new officers." Firstly, neither suspension nor
cancellation includes the take-over and ouster of incumbent directors and officers, otherwise the law
itself would have expressly so stated. Secondly, even granting that the law intended such as
postulated, there is the requirement of a hearing. None was conducted.
Likewise, even if We grant, for the sake of argument, that said power includes the power to disband
the board of directors and remove the officers of the KBMBPM, and that a hearing was not expressly
required in the law, still the Order can be validly issued only after giving due process to the affected
parties, herein petitioners.
Due process is guaranteed by the Constitution 75 and extends to administrative proceedings. In the
landmark case of Ang Tibay vs. Court of Industrial Relations, 76 this Court, through Justice Laurel,
laid down the cardinal primary requirements of due process in administrative proceedings, foremost
of which is the right to a hearing, which includes the right to present one's case and submit evidence
in support thereof. The need for notice and the opportunity to be heard is the heart of procedural due
process, be it in either judicial or administrative proceedings. 77 Nevertheless, a plea of a denial of
procedural due process does not lie where a defect consisting in an absence of notice of hearing
was thereafter cured by the aggrieved party himself as when he had the opportunity to be heard on a
subsequent motion for reconsideration. This is consistent with the principle that what the law
prohibits is not the absence of previous notice but the absolute absence thereof and lack of an
opportunity to be heard. 78
15
In the instant case, there was no notice of a hearing on the alleged petition of the general
membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order was
based solely on an alleged petition by the general membership of the KBMBPM. There was then a
clear denial of due process. It is most unfortunate that it was done after democracy was restored
through the peaceful people revolt at EDSA and the overwhelming ratification of a new Constitution
thereafter, which preserves for the generations to come the gains of that historic struggle which
earned for this Republic universal admiration.
If there were genuine grievances against petitioners, the affected members should have timely raise
these issues in the annual general assembly or in a special general assembly. Or, if such a remedy
would be futile for some reason or another, judicial recourse was available.
Be that as it may, petitioners cannot, however, be restored to their positions. Their terms expired in
1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to Section 13 of
the by-laws, during the election at the first annual general assembly after registration, one-half plus
one (4) of the directors obtaining the highest number of votes shall serve for two years, and the
remaining directors (3) for one year; thereafter, all shall be elected for a term of two years. Hence, in
1988, when the board was disbanded, there was a number of directors whose terms would have
expired the next year (1989) and a number whose terms would have expired two years after (1990).
Reversion to the status quo preceding 29 October 1988 would not be feasible in view of this turn of
events. Besides, elections were held in 1990 and 1991. 79 The affairs of the cooperative are presently
being managed by a new board of directors duly elected in accordance with the cooperative's by-
laws.
2. G. R. No. 91927.
The right of an accused to a preliminary investigation is not among

the rights guaranteed him in the Bill of Rights. As stated in Marcos, et al. vs. Cruz, 80 "the preliminary
investigation in criminal cases is not a creation of the Constitution; its origin is statutory and it exists and the right thereto can be invoked
when so established and granted by law. It is so specifically granted by procedural law. 81 If not waived, absence thereof may amount to a
denial of due process. 82 However, lack of preliminary investigation is not a ground to quash or dismiss a complaint or information. Much
less does it affect the court's jurisdiction. In People vs. Casiano, 83 this Court ruled:
Independently of the foregoing, the absence of such investigation [preliminary] did

not impair the validity of the information or otherwise render it defective. Much less
did it affect the jurisdiction of the court of first instance over the present case. Hence,
had the defendant-appellee been entitled to another preliminary investigation, and
had his plea of not guilty upon arraignment not implied a waiver of said right, the
court of first instance should have, either conducted such preliminary investigation, or
ordered the Provincial Fiscal to make it, in pursuance of section 1687 of the Revised
Administrative Code (as amended by Republic Act No. 732), or remanded the record
for said investigation to the justice of the peace court, instead of dismissing the case
as it did in the order appealed from.
This doctrine was thereafter reiterated or affirmed in several case. 84
In the instant case, even if it is to be conceded for argument's sake that there was in fact no preliminary investigation, the Sandiganbayan,
per Doromal vs. Sandiganbayan, 85 "should merely suspend or hold in abeyance proceedings upon the questioned Amended Information
and remand the case to the Office of the Ombudsman for him to conduct a preliminary investigation."
It is Our view, however, that petitioners were not denied the right to preliminary investigation. They,
nevertheless, insist that the preliminary investigation conducted by the Office of the Special
Prosecutor existed more in form than in substance. This is anchored on the failure by prosecutor
Onos to consider the counter-affidavits filed by petitioners. The same sin of omission is ascribed to
16
Acting Director de la Llana who purportedly failed to consider the comments submitted by the
petitioners pursuant to a subpoena dated 13 April 1989. The failure of special prosecutor Berbano to
conduct a preliminary investigation before amending the information is also challenged.
It is finally urged that the Sandiganbayan completely disregarded the "glaring anomaly that on its
face the Information filed by the Office of the Special Prosecutor" was prepared and subscribed on
18 January 1989, while the records indicate that the preliminary investigation was concluded on 3
October 1989.
In his Comment, respondent Berbano dispassionately traces the genesis of the criminal information
filed before the Sandiganbayan. His assessment that a preliminary investigation sufficient in
substance and manner was conducted prior to the filing of the information reflects the view of the
Sandiganbayan, maintained in both the 17 November 1989 and 4 January 1990 resolutions, that
there was compliance with the requirements of due process.
Petitioners were provided a reasonable period within which to submit their counter-affidavits; they
did not avail of the original period; they moved for an extension of at least fifteen (15) days from 22
October 1988. Despite the urgency of its nature, the motion was sent by mail. The extension prayed
for was good up to 6 November 1988. But, as admitted by them, they filed the Counter-Affidavits
only on 9 November 1988. Yet, they blamed prosecutor Onos for promulgating the 11 November
1989 Resolution and for, allegedly, not acting on the motion. Petitioners then should not lay the
blame on Onos; they should blame themselves for presuming that the motion would be granted.
This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13 December
1988 requesting that the reviewing prosecutor consider the belatedly filed documents; 86 thus, there is the
recommendation of prosecutor Bernardita Erum calling for the dismissal of the charges on 2 March 1989, which, however, was not sustained
upon subsequent review. The Sandiganbayan, in its 17 November 1989 Resolution, succinctly summed up the matter when it asserted that
"even granting, for the sake of argument, that prosecutor Onos . . . failed to consider accused-movants' counter-affidavits, such defect was
cured when a "Motion for Reconsideration" was filed, and
which . . . de la Llana took into account upon review."
It may not then be successfully asserted that the counter-affidavits were not considered by the
Ombudsman in approving the information. Perusal of the factual antecedents reveals that a second
investigation was conducted upon the "1st Indorsement" of the Ombudsman of 4 April 1989. As a
result, subpoenas were issued and comments were asked to be submitted, which petitioners did, but
only after a further extension of fifteen (15) days from the expiration of the original deadline. From
this submission the matter underwent further review.
Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample discussion of the
defenses raised by the petitioners in their counter-affidavits, thus negating the charge that the issues
raised by them were not considered at all. 87
It is indisputable that the respondents were not remiss in their duty to afford the petitioners the opportunity to contest the charges thrown their
way. Due process does not require that the accused actually file his counter-affidavits before the preliminary investigation is deemed
completed. All that is required is that he be given the opportunity to submit such if he is so minded. 88
In any event, petitioners did in fact, although belatedly, submit their counter-affidavits and as a result thereof, the prosecutors concerned
considered them in subsequent reviews of the information, particularly in the re-investigation ordered by the Ombudsman.
And now, as to the protestation of lack of preliminary investigation prior to the filing of the Amended
Information. The prosecution may amend the information without leave of court before
arraignment, 89 and such does not prejudice the accused. 90 Reliance on the pronouncements in Doromal vs. Sandiganbayan 91 is
misplaced as what obtained therein was the preparation of an entirely new information as contrasted with mere amendments introduced in
the amended information, which also charges petitioners with violating Section 3 (e) of the Anti-Graft Law.
17
In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the Tanodbayan to
conduct another preliminary investigation of a case under review by it. On the contrary, under P.D.
No. 911, in relation to Rule 12, Administrative Order No. VII, the Tanodbayan may, upon review,
reverse the findings of the investigator and thereafter "where he finds a prima facie case, to cause
the filing of an information in court against the respondent, based on the same sworn statements or
evidence submitted, without the necessity of conducting another preliminary investigation."
Respondent Sandiganbayan did not then commit any grave abuse of discretion in respect to its
Resolutions of 4 January 1990 and 1 February 1990.
The petition then must fail.
CONCLUSION
WHEREFORE, judgment is hereby rendered:
1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged Order of 28
October 1988 of the respondent Secretary of Agriculture; but denying, for having become moot and
academic, the prayer of petitioners that they be restored to their positions in the KBMBPM.
2. DISMISSING, for lack of merit, the petition in G.R. No. 91927.
No pronouncement as to costs.
IT IS SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. 144463 January 14, 2004
SENATOR ROBERT S. JAWORSKI, petitioner,

vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION and SPORTS AND GAMES
ENTERTAINMENT CORPORATION, respondents.
DECISION
YNARES-SANTIAGO, J.:
The instant petition for certiorari and prohibition under Rule 65 of the Rules of Court seeks to nullify
the "Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming,"
executed by respondent Philippine Amusement and Gaming Corporation (hereinafter referred to as
PAGCOR) in favor of respondent Sports and Games and Entertainment Corporation (also referred to
as SAGE).
The facts may be summarized as follows:
18
PAGCOR is a government owned and controlled corporation existing under Presidential

Decree No. 1869 issued on July 11, 1983 by then President Ferdinand Marcos. Pertinent
provisions of said enabling law read:
SECTION 1. Declaration of Policy. – It is hereby declared to be the policy of the

State to centralize and integrate all games of chance not heretofore authorized by
existing franchises or permitted by law in order to attain the following objectives:
xxx xxx xxx
b) To establish and operate clubs and casinos, for amusement and

recreation, including sports, gaming pools (basketball, football, lotteries, etc.)
and such other forms of amusement and recreation including games of
chance, which may be allowed by law within the territorial jurisdiction of the
Philippines and which will: x x x (3) minimize, if not totally eradicate, the evils,
malpractices and corruptions that are normally prevalent in the conduct and
operation of gambling clubs and casinos without direct government
involvement.
xxx xxx xxx
TITLE IV – GRANT OF FRANCHISE
Sec.10. Nature and term of franchise. – Subject to the terms and conditions established in this
Decree, the Corporation is hereby granted for a period of twenty-five (25) years, renewable for
another twenty-five (25) years, the rights, privileges and authority to operate and maintain gambling
casinos, clubs, and other recreation or amusement places, sports, gaming pools, i.e. basketball,
football, lotteries, etc. whether on land or sea, within the territorial jurisdiction of the Republic of the
Philippines.
On March 31, 1998, PAGCOR’s board of directors approved an instrument denominated as "Grant
of Authority and Agreement for the Operation of Sports Betting and Internet Gaming", which granted
SAGE the authority to operate and maintain Sports Betting station in PAGCOR’s casino locations,
and Internet Gaming facilities to service local and international bettors, provided that to the
satisfaction of PAGCOR, appropriate safeguards and procedures are established to ensure the
integrity and fairness of the games.
On September 1, 1998, PAGCOR, represented by its Chairperson, Alicia Ll. Reyes, and SAGE,
represented by its Chairman of the Board, Henry Sy, Jr., and its President, Antonio D. Lacdao,
executed the above-named document.
Pursuant to the authority granted by PAGCOR, SAGE commenced its operations by conducting
gambling on the Internet on a trial-run basis, making pre-paid cards and redemption of winnings
available at various Bingo Bonanza outlets.
Petitioner, in his capacity as member of the Senate and Chairman of the Senate Committee on
Games, Amusement and Sports, files the instant petition, praying that the grant of authority by
PAGCOR in favor of SAGE be nullified. He maintains that PAGCOR committed grave abuse of
discretion amounting to lack or excess of jurisdiction when it authorized SAGE to operate gambling
on the internet. He contends that PAGCOR is not authorized under its legislative franchise, P.D.
1869, to operate gambling on the internet for the simple reason that the said decree could not have
possibly contemplated internet gambling since at the time of its enactment on July 11, 1983 the
19
internet was yet inexistent and gambling activities were confined exclusively to real-space. Further,
he argues that the internet, being an international network of computers, necessarily transcends the
territorial jurisdiction of the Philippines, and the grant to SAGE of authority to operate internet
gambling contravenes the limitation in PAGCOR’s franchise, under Section 14 of P.D. No. 1869
which provides:
Place. – The Corporation [i.e., PAGCOR] shall conduct gambling activities or games of
chance on land or water within the territorial jurisdiction of the Republic of the Philippines. x x
x
Moreover, according to petitioner, internet gambling does not fall under any of the categories of the
authorized gambling activities enumerated under Section 10 of P.D. No. 1869 which grants
PAGCOR the "right, privilege and authority to operate and maintain gambling casinos, clubs, and
other recreation or amusement places, sports gaming pools, within the territorial jurisdiction of the
Republic of the Philippines."1 He contends that internet gambling could not have been included
within the commonly accepted definition of "gambling casinos", "clubs" or "other recreation or
amusement places" as these terms refer to a physical structure in real-space where people who
intend to bet or gamble go and play games of chance authorized by law.
The issues raised by petitioner are as follows:
I. WHETHER OR NOT RESPONDENT PAGCOR IS AUTHORIZED UNDER P.D. NO. 1869

TO OPERATE GAMBLING ACTIVITIES ON THE INTERNET;
II. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS

JURISDICTION, OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION, WHEN IT AUTHORIZED RESPONDENT SAGE TO
OPERATE INTERNET GAMBLING ON THE BASIS OF ITS RIGHT "TO OPERATE AND
MAINTAIN GAMBLING CASINOS, CLUBS AND OTHER AMUSEMENT PLACES" UNDER
SECTION 10 OF P.D. 1869;
III. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS

JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT GRANTED AUTHORITY TO SAGE TO OPERATE
GAMBLING ACTIVITIES IN THE INTERNET.
The above-mentioned issues may be summarized into a single pivotal question: Does PAGCOR’s
legislative franchise include the right to vest another entity, SAGE in this case, with the authority to
operate Internet gambling? Otherwise put, does Presidential Decree No. 1869 authorize PAGCOR
to contract any part of its franchise to SAGE by authorizing the latter to operate Internet gambling?
Before proceeding with our main discussion, let us first try to hurdle a number of important
procedural matters raised by the respondents.
In their separate Comments, respondents PAGCOR and SAGE insist that petitioner has no legal
standing to file the instant petition as a concerned citizen or as a member of the Philippine Senate
on the ground that he is not a real party-in-interest entitled to the avails of the suit. In this light, they
argue that petitioner does not have the requisite personal and substantial interest to impugn the
validity of PAGCOR’s grant of authority to SAGE.
Objections to the legal standing of a member of the Senate or House of Representative to maintain a
suit and assail the constitutionality or validity of laws, acts, decisions, rulings, or orders of various
20
government agencies or instrumentalities are not without precedent. Ordinarily, before a member of
Congress may properly challenge the validity of an official act of any department of the government
there must be an unmistakable showing that the challenged official act affects or impairs his rights
and prerogatives as legislator.2 However in a number of cases,3 we clarified that where a case
involves an issue of utmost importance, or one of overreaching significance to society, the Court, in
its discretion, can brush aside procedural technicalities and take cognizance of the petition.
Considering that the instant petition involves legal questions that may have serious implications on
public interests, we rule that petitioner has the requisite legal standing to file this petition.
Respondents likewise urge the dismissal of the petition for certiorari and prohibition because under
Section 1, Rule 65 of the 1997 Rules of Civil Procedure, these remedies should be directed to any
tribunal, board, officer or person whether exercising judicial, quasi-judicial, or ministerial functions.
They maintain that in exercising its legally-mandated franchise to grant authority to certain entities to
operate a gambling or gaming activity, PAGCOR is not performing a judicial or quasi-judicial act.
Neither should the act of granting licenses or authority to operate be construed as a purely
ministerial act. According to them, in the event that this Court takes cognizance of the instant
petition, the same should be dismissed for failure of petitioner to observe the hierarchy of courts.
Practically the same procedural infirmities were raised in Del Mar v. Philippine Amusement and
Gaming Corporation where an almost identical factual setting obtained. Petitioners therein filed a
petition for injunction directly before the Court which sought to enjoin respondent from operating the
jai-alai games by itself or in joint venture with another corporate entity allegedly in violation of law
and the Constitution. Respondents contended that the Court had no jurisdiction to take original
cognizance of a petition for injunction because it was not one of the actions specifically mentioned in
Section 1 of Rule 56 of the 1997 Rules of Civil Procedure. Respondents likewise took exception to
the alleged failure of petitioners to observe the doctrine on hierarchy of courts. In brushing aside the
apparent procedural lapse, we held that "x x x this Court has the discretionary power to take
cognizance of the petition at bar if compelling reasons, or the nature and importance of the issues
raised, warrant the immediate exercise of its jurisdiction."4
In the case at bar, we are not inclined to rule differently. The petition at bar seeks to nullify, via a
petition for certiorari and prohibition filed directly before this Court, the "Grant of Authority and
Agreement for the Operation of Sports Betting and Internet Gaming" by virtue of which SAGE was
vested by PAGCOR with the authority to operate on-line Internet gambling. It is well settled that
averments in the complaint, and not the nomenclature given by the parties, determine the nature of
the action.5 Although the petition alleges grave abuse of discretion on the part of respondent
PAGCOR, what it primarily seeks to accomplish is to prevent the enforcement of the "Grant of
Authority and Agreement for the Operation of Sports Betting and Internet Gaming." Thus, the action
may properly be characterized as one for Prohibition under Section 2 of Rule 65, which incidentally,
is another remedy resorted to by petitioner.
Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the
transcendental importance of the issues involved in this case warrants that we set aside the
technical defects and take primary jurisdiction over the petition at bar. One cannot deny that the
issues raised herein have potentially pervasive influence on the social and moral well being of this
nation, specially the youth; hence, their proper and just determination is an imperative need. This is
in accordance with the well-entrenched principle that rules of procedure are not inflexible tools
designed to hinder or delay, but to facilitate and promote the administration of justice. Their strict and
rigid application, which would result in technicalities that tend to frustrate, rather than promote
substantial justice, must always be eschewed.6
Having disposed of these procedural issues, we now come to the substance of the action.
21
A legislative franchise is a special privilege granted by the state to corporations. It is a privilege of

public concern which cannot be exercised at will and pleasure, but should be reserved for public
control and administration, either by the government directly, or by public agents, under such
conditions and regulations as the government may impose on them in the interest of the public. It is
Congress that prescribes the conditions on which the grant of the franchise may be made. Thus the
manner of granting the franchise, to whom it may be granted, the mode of conducting the business,
the charter and the quality of the service to be rendered and the duty of the grantee to the public in
exercising the franchise are almost always defined in clear and unequivocal language.7
After a circumspect consideration of the foregoing discussion and the contending positions of the
parties, we hold that PAGCOR has acted beyond the limits of its authority when it passed on or
shared its franchise to SAGE.
In the Del Mar case where a similar issue was raised when PAGCOR entered into a joint venture
agreement with two other entities in the operation and management of jai alai games, the Court,8 in
an En Banc Resolution dated 24 August 2001, partially granted the motions for clarification filed by
respondents therein insofar as it prayed that PAGCOR has a valid franchise, but only by itself (i.e.
not in association with any other person or entity), to operate, maintain and/or manage the game of
jai-alai.
In the case at bar, PAGCOR executed an agreement with SAGE whereby the former grants the
latter the authority to operate and maintain sports betting stations and Internet gaming operations. In
essence, the grant of authority gives SAGE the privilege to actively participate, partake and share
PAGCOR’s franchise to operate a gambling activity. The grant of franchise is a special privilege that
constitutes a right and a duty to be performed by the grantee. The grantee must not perform its
activities arbitrarily and whimsically but must abide by the limits set by its franchise and strictly
adhere to its terms and conditionalities. A corporation as a creature of the State is presumed to exist
for the common good. Hence, the special privileges and franchises it receives are subject to the laws
of the State and the limitations of its charter. There is therefore a reserved right of the State to
inquire how these privileges had been employed, and whether they have been abused.9
While PAGCOR is allowed under its charter to enter into operator’s and/or management contracts, it
is not allowed under the same charter to relinquish or share its franchise, much less grant a veritable
franchise to another entity such as SAGE. PAGCOR can not delegate its power in view of the legal
principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to
show that it has been expressly authorized to do so. In Lim v. Pacquing,10 the Court clarified that
"since ADC has no franchise from Congress to operate the jai-alai, it may not so operate even if it
has a license or permit from the City Mayor to operate the jai-alai in the City of Manila." By the same
token, SAGE has to obtain a separate legislative franchise and not "ride on" PAGCOR’s franchise if
it were to legally operate on-line Internet gambling.
WHEREFORE, in view of all the foregoing, the instant petition is GRANTED. The "Grant of Authority
and Agreement to Operate Sports Betting and Internet Gaming" executed by PAGCOR in favor of
SAGE is declared NULL and VOID.
SO ORDERED.

SUPREME COURT
Manila
FIRST DIVISION
22
G.R. No. 93237 November 6, 1992
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,

vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) and JUAN A. ALEGRE, respondents.
PADILLA, J.:
Private respondent Juan A. Alegre's wife, Dr. Jimena Alegre, sent two (2) RUSH telegrams through
petitioner RCPI's facilities in Taft Ave., Manila at 9:00 in the morning of 17 March 1989 to his sister
and brother-in-law in Valencia, Bohol and another sister-in-law in Espiritu, Ilocos Norte, with the
following identical texts:
MANONG POLING DIED INTERMENT TUESDAY 1
Both telegrams did not reach their destinations on the expected dates. Private respondent filed a
letter-complaint against the RCPI with the National Telecommunications Commission (NTC) for poor
service, with a request for the imposition of the appropriate punitive sanction against the company.
Taking cognizance of the complaint, NTC directed RCPI to answer the complaint and set the initial
hearing of the case to 2 May 1989. After two (2) resettings, RCPI moved to dismiss the case on the
following grounds:
1. Juan Alegre is not the real party in interest;
2. NTC has no jurisdiction over the case;
3. the continued hearing of the case violates its constitutional right to due process of
law. 2
RCPI likewise moved for deferment of scheduled hearings until final determination of its motion to
dismiss.
On 15 June 1989, NTC proceeded with the hearing and received evidence for private respondent
Juan Alegre. On 3 October 1989, RCPI's motion to dismiss was denied, thus:
The herein complainant is the husband of the sender of the "rush" telegram that
respondent allegedly failed to deliver in a manner respondent bound itself to
undertake, so his legal interest in this administrative case cannot be seriously called
in question. As regards the issue of jurisdiction, the authority of the Commission to
hear and decide this case stems from its power of control and supervision over the
operation of public communication utilities as conferred upon it by law.
Besides, the filing of a motion to dismiss is not allowed by the rules (Section 1, Rule
12, Rules of Practice and Procedures). Following, however, the liberal construction of
the rules, respondent (sic) motion shall be treated as its answer or be passed upon
after the conclusion of the hearing on the merits. . . . 3
23
Hearings resumed in the absence of petitioner RCPI which was, however, duly notified thereof. On
27 November 1989, NTC disposed of the controversy in the following manner:
WHEREFORE, in view of all the foregoing, the Commission finds respondent

administratively liable for deficient and inadequate service defined under Section
19(a) of C.A. 146 and hereby imposes the penalty of FINE payable within thirty (30)
days from receipt hereof in the aggregate amount of ONE THOUSAND PESOS
(P1,000.00) for:
1. Rush Telegram sent to Valencia, Bohol on March 17, 1989 and received on March
21, 1989
3 days x P200.00 per day = P600.00
2. Rush Telegram sent to Espiritu, Ilocos Norte on March 17, 1989 and received on
March 20, 1989
2 days x P200.00 per day = P400.00
Total = P1,000.00
ENTERED. November 27, 1989. 4
A motion for reconsideration by RCPI reiterating averments in its earlier motion to dismiss was
denied for lack of merit; 5 hence, this petition for review invoking C.A. 146 Sec. 19(a) which limits the
jurisdiction of the Public Service Commission (precursor of the NTC) to the fixing of rates. RCPI
submits that its position finds support in two (2) decided cases 6 identical with the present one. Then
Justice (later Chief Justice) Fernando writing for the Court stated:
. . . There can be no justification then for the Public Service Commission imposing
the fines for these two petitions. The law cannot be any clearer. The only power it
possessed over radio companies, as noted was the (sic ) fix rates. It could not take to
task a radio company for negligence or misfeasance. It was bereft of such
competence. It was not vested within such authority. . . .
The Public Service Commission having been abolished by virtue of a Presidential

Decree, as set forth at the outset, and a new Board of Communications having been
created to take its place, nothing said in its decision has reference to whatever
powers are now lodged in the latter body. . . . . . . (Footnotes omitted)
Two (2) later cases, 7 adhering to the above tenet ruled:
Even assuming that the respondent Board of Communications has the power of
jurisdiction over petitioner in the exercise of its supervision to insure adequate public
service, petitioner cannot be subjected to payment of fine under sec. 21 of the Public
Service Act, because this provision of the law subjects to a fine every public service
that violates or falls (sic) to comply with the terms and conditions of any certificate or
any orders, decisions and regulations of the Commission. . . . .
The Office of the Solicitor General now claims that the cited cases are no longer applicable, that the
power and authority of the NTC to impose fines is incidental to its power to regulate public service
24
utilities and to supervise telecommunications facilities, which are now clearly defined in Section 15,
Executive Order No. 546 dated 23 July 1979: thus:
Functions of the Commission. The Commission shall exercise the following functions:
xxx xxx xxx
b. Establish, prescribe and regulate the areas of operation of particular operators of

the public service communications;
xxx xxx xxx
h. Supervise and inspect the operation of radio stations and telecommunications

facilities.
Regulatory administrative agencies necessarily impose sanctions, adds the Office of the Solicitor
General. RCPI was fined based on the finding of the NTC that it failed to undertake adequate service
in delivering two (2) rush telegrams. NTC takes the view that its power of supervision was
broadened by E. O. No. 546, and that this development superseded the ruling in RCPI vs. Francisco
Santiago and companion cases.
The issues of due process and real parties in interest do not have to be discussed in this case. This
decision will dwell on the primary question of jurisdiction of the NTC to administratively impose fines
on a telegraph company which fails to render adequate service to a consumer.
E. O. 546, it will be observed, is couched in general terms. The NTC stepped "into the shoes" of the
Board of Communications which exercised powers pursuant to the Public Service Act. The power to
impose fines should therefore be read in the light of the Francisco Santiago case because
subsequent legislation did not grant additional powers to the Board of Communications. The Board
in other words, did not possess the power to impose administrative fines on public services
rendering deficient service to customers, ergo its successor cannot arrogate unto itself such power,
in the absence of legislation. It is true that the decision in RCPI vs. Board of Communications seems
to have modified the Santiago ruling in that the later case held that the Board of Communications
can impose fines if the public service entity violates or fails to comply with the terms and conditions
of any certificate or any order, decision or regulation of the Commission. But can private
respondent's complaint be similarly treated when the complaint seeks redress of a grievance against
the company? 8 NTC has no jurisdiction to impose a fine. Globe Wireless Ltd. vs. Public Service Commission (G. R. No. L-27250, 21
January 1987, 147 SCRA 269) says so categorically.
Verily, Section 13 of Commonwealth Act No. 146, as amended, otherwise known as

the Public Service Act, vested in the Public Service Commission jurisdiction,
supervision and control over all public services and their franchises, equipment and
other properties.
xxx xxx xxx
The act complained of consisted in petitioner having allegedly failed to deliver the
telegraphic message of private respondent to the addressee in Madrid, Spain.
Obviously, such imputed negligence has nothing whatsoever to do with the subject
matter of the very limited jurisdiction of the Commission over petitioner.
25
Moreover, under Section 21 of C. A. 146, as amended, the Commission was

empowered to impose an administrative fine in cases of violation of or failure by a
public service to comply with the terms and conditions of any certificate or any
orders, decisions or regulations of the Commission. Petitioner operated under a
legislative franchise, so there were no terms nor conditions of any certificate issued
by the Commission to violate. Neither was there any order, decision or regulation
from the Commission applicable to petitioner that the latter had allegedly violated,
disobeyed, defied or disregarded.
No substantial change has been brought about by Executive Order No. 546 invoked by the Solicitor
General's Office to bolster NTC's jurisdiction. The Executive Order is not an explicit grant of power to
impose administrative fines on public service utilities, including telegraphic agencies, which have
failed to render adequate service to consumers. Neither has it expanded the coverage of the
supervisory and regulatory power of the agency. There appears to be no alternative but to reiterate
the settled doctrine in administrative law that:
Too basic in administrative law to need citation of jurisprudence is the rule that
jurisdiction and powers of administrative agencies, like respondent Commission, are
limited to those expressly granted or necessarily implied from those granted in the
legislation creating such body; and any order without or beyond such jurisdiction is
void and ineffective . . . (Globe Wireless case, supra).
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE for lack of jurisdiction of
the NTC to render it. The temporary restraining order issued on 18 June 1990 is made
PERMANENT without prejudice, however, to the filing by the party aggrieved by the conduct of
RCPI, of the proper action in the proper forum. No costs.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 137489 - May 29, 2002
COOPERATIVE DEVELOPMENT AUTHORITY, Petitioner, vs. DOLEFIL AGRARIAN REFORM

BENEFICIARIES COOPERATIVE, INC., ESMERALDO A. DUBLIN, ALICIA SAVAREZ, EDNA
URETA, ET AL., Respondents.
DE LEON, JR., J.:
At the core of the instant petition for review on certiorari of the Decision1 of the Court of Appeals,
13th Division, in CA-G.R. SP. No. 47933 promulgated on September 9, 1998 and its Resolution2 dated
February 9, 1999 is the issue of whether or not petitioner Cooperative Development Authority (CDA
for brevity) is vested with quasi-judicial authority to adjudicate intra-cooperative disputes.
The record shows that sometime in the later part of 1997, the CDA received from certain members of
the Dolefil Agrarian Reform Beneficiaries Cooperative, Inc. (DARBCI for brevity), an agrarian reform
cooperative that owns 8,860 hectares of land in Polomolok, South Cotabato, several complaints
alleging mismanagement and/or misappropriation of funds of DARBCI by the then incumbent officers
26
and members of the board of directors of the cooperative, some of whom are herein private
respondents.
Acting on the complaints docketed as CDA-CO Case No. 97-011, CDA Executive Director Candelario L.
Verzosa, Jr. issued an order3 dated December 8, 1997 directing the private respondents to file their
answer within ten (10) days from receipt thereof.
Before the private respondents could file their answer, however, CDA Administrator Alberto P.
Zingapan issued on December 15, 1997 an order,4 upon the motion of the complainants in CDA-CO
Case No. 97-011, freezing the funds of DARBCI and creating a management committee to manage the
affairs of the said cooperative.
On December 18, 1991, the private respondents filed a Petition for Certiorari5 with a prayer for
preliminary injunction, damages and attorney's fees against the CDA and its officers namely:
Candelario L. Verzosa, Jr. and Alberto P. Zingapan, including the DOLE Philippines Inc. before the
Regional Trial Court (RTC for brevity) of Polomolok, South Cotabato, Branch 39. The petition which
was docketed as SP Civil Case No. 25, primarily questioned the jurisdiction of the CDA to resolve the
complaints against the private respondents, specifically with respect to the authority of the CDA to
issue the "freeze order" and to create a management committee that would run the affairs of DARBCI.
On February 24, 1998, CDA Chairman Jose C. Medina, Jr. issued an order6 in CDA-CO Case No. 97-
011 placing the private respondents under preventive suspension, hence, paving the way for the
newly-created management committee7 to assume office on March 10, 1998.
On March 27, 1998, the RTC of Polomolok, South Cotabato, Branch 39, issued a temporary restraining
order8 (TRO), initially for seventy-two (72) hours and subsequently extended to twenty (20) days, in
an Order dated March 31, 1998. The temporary restraining order, in effect, directed the parties to
restore status quo ante, thereby enabling the private respondents to reassume the management of
DARBCI.
The CDA questioned the propriety of the temporary restraining order issued by the RTC of Polomolok,
South Cotabato on March 27, 1998 through a petition for certiorari before the Court of Appeals,
12th Division, which was docketed as CA-G.R. SP No. 47318.
On April 21, 1998, the Court of Appeals, 12th Division, issued a temporary restraining order9 in CA-
G.R. SP No. 47318 enjoining the RTC of Polomolok, South Cotabato, Branch 39, from enforcing the
restraining order which the latter court issued on March 27, 1998, and ordered that the proceedings in
SP Civil Case No. 25 be held in abeyance.
Consequently, the CDA continued with the proceedings in CDA-CO Case No. 97-011. On May 26, 1998
CDA Administrator Arcadio S. Lozada issued a resolution10 which directed the holding of a special
general assembly of the members of DARBCI and the creation of an ad hoc election committee to
supervise the election of officers and members of the board of directors of DARBCI scheduled on June
14, 1998.
The said resolution of the CDA, issued on May 26, 1998 prompted the private respondents to file on
June 8, 1998 a Petition for Prohibition11 with a prayer for preliminary mandatory injunction and
temporary restraining order with the Court of Appeals, 13th Division, which was docketed as CA-G.R.
SP No. 47933. On June 10, 1998, the appellate court issued a resolution12 restraining the CDA and its
administrator, Arcadio S. Lozada, the three (3) members of the ad hoc election committee or any and
all persons acting in their behalf from proceeding with the election of officers and members of the
board of directors of DARBCI scheduled on June 14, 1998.
Incidentally, on the same date that the Court of Appeals issued a temporary restraining order in CA-
G.R. SP No. 47933 on June 10, 1998, a corporation by the name of Investa Land Corporation (Investa
for brevity) which allegedly executed a "Lease Agreement with Joint Venture" with DARBCI filed a
27
petition13 with the RTC of Polomolok, South Cotabato, Branch 39, docketed as SP Civil Case No. 28,
essentially seeking the annulment of orders and resolutions issued by the CDA in CDA-CO Case No.
97-011 with a prayer for temporary restraining order and preliminary injunction. On the following day,
June 11, 1998, the trial court issued a temporary restraining order14 enjoining the respondents therein
from proceeding with the scheduled special general assembly and the elections of officers and
members of the board of directors of DARBCI on June 14, 1998. Thereafter, it also issued a writ of
preliminary injunction.
With the issuance of the two (2) restraining orders by the Court of Appeals, 13 th Division, and the RTC
of Polomolok, South Cotabato, Branch 39, on June 10 and 11, 1998, respectively, the scheduled
special general assembly and the election of officers and members of the board of directors of DARBCI
on June 14, 1998 did not take place.
Nevertheless, on July 12, 1998, the majority of the 7,511 members of DARBCI, on their own initiative,
convened a general assembly and held an election of the members of the board of directors and
officers of the cooperative, thereby effectively replacing the private respondents. Hence, the private
respondents filed a Twin Motions for Contempt of Court and to Nullify Proceedings 15 with the Court of
Appeals in CA-G.R. SP No. 47933.
On September 9, 1998 the Court of Appeals, 13th Division, promulgated its subject appealed
Decision16 granting the petition in CA-G.R. SP No. 47933, the dispositive portion of which reads:
Wherefore, the foregoing considered, the Petition is hereby GRANTED. The Orders of the respondent
Cooperative Development Authority in CDA-CO case No. 97-011 dated 08 December 1997, 15
December 1997, 26 January 1998, 24 February 1998, 03 March 1998, and the Resolution dated 26
May 1998, are hereby declared NULL AND VOID and of no legal force and effect.
Further, the respondents are hereby ORDERED to perpetually CEASE AND DESIST from taking any
further proceedings in CDA-CO Case No. 97-011.
Lastly, the respondent CDA is hereby ORDERED to REINSTATE the Board of Directors of DARBCI who
were ousted by virtue of the questioned Orders, and to RESTORE the status quo prior to the filing of
CDA-CO Case No. 97-011.
SO ORDERED.
The CDA filed a motion for reconsideration17 of the Decision in CA-G.R. SP No. 47933 but it was
denied by the Court of Appeals in its assailed Resolution18 dated February 9, 1999, thus:
WHEREFORE, the Motion for Reconsideration is hereby DENIED for being patently without merit.
MOREOVER, acting on petitioners' Twin Motion, and in view of the Decision in this case dated 09,
September 1998, the tenor of which gives it legal effect nunc pro tunc. We therefore hold the 12 July
1998 election of officers, the resolutions passed during the said assembly, and the subsequent oath-
taking of the officers elected therein, and all actions taken during the said meeting, being in blatant
defiance of a valid restraining order issued by this Court, to be NULL AND VOID AB INITIO AND OF NO
LEGAL FORCE AND EFFECT.
FURTHERMORE, the private respondents are hereby given thirty (30) days from receipt of this
Resolution within which to explain in writing why they should not be held in contempt of this Court for
having openly defied the restraining order dated 10 July 1998. The Hon. Jose C. Medina of the CDA is
given a like period to explain in writing why he should not be cited in contempt for having
administered the oath of the "Board of Officers" pending the effectivity of the restraining order. The
respondent Arcadio S. Lozada, Administrator of the CDA, is likewise given the same period to explain
why he should not be held in contempt for issuing a resolution on 21 July 1998 validating the
28
proceedings of the assembly, and another resolution on 28 August 1998 confirming the election of the
officers thereof.
SO ORDERED.
Hence, the instant petition19 for review which raises the following assignments of error:
THE HONORABLE COURT OF APPEALS, IN NULLIFYING THE ORDERS AND RESOLUTIONS OF THE
COOPERATIVE DEVELOPMENT AUTHORITY IN CDA CO CASE NO. 97-011, DECIDED A QUESTION OF
SUBSTANCE THAT IS NOT IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF THE SUPREME
COURT.
II
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE RULE ON FORUM-SHOPPING.
III
THE HONORABLE COURT OF APPEALS ERRED IN RENDERING A DECISION ON THE BASIS OF PURE
CONJECTURES AND SURMISES AND HAS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS WHICH CALL FOR AN EXERCISE OF THIS HONORABLE COURT'S
SUPERVISION.
Petitioner CDA claims that it is vested with quasi-judicial authority to adjudicate cooperative disputes
in view of its powers, functions and responsibilities under Section 3 of Republic Act No. 6939. 20 The
quasi-judicial nature of its powers and functions was confirmed by the Department of Justice, through
the then Acting Secretary of Justice Demetrio G. Demetria, in DOJ Opinion No. 10, Series of 1995,
which was issued in response to a query of the then Chairman Edna E. Aberina of the CDA, to wit:
Applying the foregoing, the express powers of the CDA to cancel certificates of registration of
cooperatives for non-compliance with administrative requirements or in cases of voluntary dissolution
under Section 3(g), and to mandate and conciliate disputes within a cooperative or between
cooperatives under Section 8 of R.A. No. 6939, may be deemed quasi-judicial in nature.
The reason is that - in the performance of its functions such as cancellation of certificate of
registration, it is necessary to establish non-compliance or violation of administrative requirement. To
do so, there arises an indispensable need to hold hearings, investigate or ascertain facts that possibly
constitute non-compliance or violation and, based on the facts investigated or ascertained, it becomes
incumbent upon the CDA to use its official discretion whether or not to cancel a cooperative's
certificate of registration, thus, clearly revealing the quasi-judicial nature of the said function. When
the CDA acts as a conciliatory body pursuant to Section 8 of R.A. No. 6939, it in effect performs the
functions of an arbitrator. Arbitrators are by the nature of their functions act in quasi-judicial capacity
xxx.
The quasi-judicial nature of the foregoing functions is bolstered by the provisions of Sections 3(o) of
R.A. No. 6939 which grants CDA on (sic) the exercise of other functions as may be necessary to
implement the provisions of cooperative laws, the power to summarily punish for direct contempt any
person guilty of misconduct in the presence thereof who seriously interrupts any hearing or inquiry
with a fine or imprisonment prescribed therein, a power usually granted to make effective the exercise
of quasi-judicial functions.21
Likewise, the Office of the President, through the then Deputy Executive Secretary, Hon. Leonardo A.
Quisumbing, espoused the same view in the case of Alberto Ang, et al. v. The Board of Directors,
29
Metro Valenzuela Transport Services Cooperative, Inc., O.P. Case No. 51111, when it declared and
ruled that:
Concededly, Section 3(o) of R.A. No. 6939 and Article 35(4) of R.A. 6938, may not be relied upon by
the CDA as authority to resolve internal conflicts of cooperatives, they being general provisions.
Nevertheless, this does not preclude the CDA from resolving the instant case. The assumption of
jurisdiction by the CDA on matters which partake of cooperative disputes is a logical, necessary and
direct consequence of its authority to register cooperatives. Before a cooperative can acquire juridical
personality, registration thereof is a condition sine qua non, and until and unless the CDA issues a
certificate of registration under its official seal, any cooperative for that matter cannot be considered
as having been legally constituted. To our mind, the grant of this power impliedly carries with it the
visitorial power to entertain cooperative conflicts, a lesser power compared to its authority to cancel
registration certificates when, in its opinion, the cooperative fails to comply with some administrative
requirements (Sec. 2(g), R.A. No. 6939). Evidently, respondents-appellants' claim that the CDA is
limited to conciliation and mediation proceedings is bereft of legal basis. Simply stated, the CDA, in
the exercise of 'such other function' and in keeping with the mandate of the law, could render the
decisions and/or resolutions as long as they pertain to the internal affairs of the public service
cooperative, such as the rights and privileges of its members, the rules and procedures for meetings
of the general assembly, Board of Directors and committees, election and qualifications of officers,
directors and committee members, and allocation and distribution of surpluses.22
The petitioner avers that when an administrative agency is conferred with quasi-judicial powers and
functions, such as the CDA, all controversies relating to the subject matter pertaining to its
specialization are deemed to be covered within the jurisdiction of said administrative agency. The
courts will not interfere in matters which are addressed to the sound discretion of government
agencies entrusted with the regulation of activities undertaken upon their special technical knowledge
and training.
The petitioner added that the decision in the case of CANORECO v. Hon. Ruben D. Torres,23 affirmed
the adjudicatory powers and functions of CDA contrary to the view held by the Court of Appeals, when
the Supreme Court upheld therein the ruling of the CDA annulling the election of therein respondents
Norberto Ochoa, et al. as officers of the Camarines Norte Electric Cooperative.
Petitioner CDA also claims that herein private respondents are guilty of forum-shopping by filing cases
in three (3) different fora seeking the same relief. Petitioner pointed out that private respondents
originally filed a petition with a prayer for preliminary injunction dated December 17, 1997 before the
RTC of Polomolok, South Cotabato which was docketed as SP Civil Case No. 25. Subsequently, the
same private respondents filed another petition with a prayer for preliminary injunction with the Court
of Appeals, 13th Division, docketed as CA-G.R. SP No. 47933. Thereafter, Investa, also represented by
the same counsel of private respondents, Atty. Reni Dublin, filed another case with the RTC of
Polomolok, South Cotabato, docketed as SP Civil Case No. 28, likewise praying, among others, for the
issuance of preliminary injunction and an application for a temporary restraining order. In effect,
petitioner was confronted with three (3) TRO's issued in three (3) separate actions enjoining it from
enforcing its orders and resolutions in CDA-CO Case No. 97-011.
In their Comment,24 private respondents contend that the instant petition for review on certiorari filed
by CDA Administrator Alberto Zingapan should be dismissed and struck down as a mere scrap of paper
for lack of authority to file the same from the Office of the Solicitor General and for having been filed
without approval from the Board of Administrators of CDA.
The private respondents also contend that, contrary to the claim of the petitioner, the powers,
functions and responsibilities of the CDA show that it was merely granted regulatory or supervisory
powers over cooperatives in addition to its authority to mediate and conciliate between parties
involving the settlement of cooperative disputes.
Private respondents denied that they are guilty of forum-shopping. They clarified that the case filed
with the RTC of Polomolok, South Cotabato, Branch 39, docketed as SP Civil Case No. 25, was a
30
petition for certiorari. On the other hand, the case that they filed with the Court of Appeals, 13th
Division, docketed therein as CA-G.R. SP No. 47933, was a petition for prohibition to stop the holding
of a special general assembly and the election of a new set of DARBCI officers on June 14, 1998 as
ordered by the petitioner CDA on May 26, 1998, which events have not yet occurred at the time the
petition for certiorari was filed by the private respondents with the RTC of Polomolok, South Cotabato,
Branch 39.
Private respondents also denied that the filing by Investa of the petition for the declaration of nullity of
the orders and resolutions of petitioner CDA, with a prayer for temporary restraining order with the
RTC of Polomolok, South Cotabato, docketed therein as SP Civil Case No. 28, constituted forum-
shopping on their part. They pointed out that Investa has a separate juridical personality from DARBCI
and that, contrary to the claim of petitioner CDA, the former is not represented by the lawyer of the
private respondents.
By way of reply,25 petitioner claims that Atty. Rogelio P. Madriaga was properly deputized, among
other lawyers, as Special Attorney by the Office of the Solicitor General to represent the CDA in the
instant petition pursuant to the letter26 of Assistant Solicitor General Carlos N. Ortega addressed to
CDA Chairman Jose C. Medina, Jr. dated April 8, 1999. Likewise, the filing of the instant petition was
an official act of CDA Administrator Alberto P. Zingapan who was duly appointed by the CDA Board of
Administrators as chairman of the Oversight Committee on Legal Matters per Resolution No. 201, S-
1998.27
Meanwhile, on March 26, 1999, certain persons alleging to be incumbent officers and members of the
board of directors of DARBCI filed a motion to intervene in the instant petition which was granted by
this Court per its Resolution dated July 7, 1999.28 In the same resolution, this Court required both
petitioner CDA and the private respondents in this case to file their respective comments to the
petition-in-intervention within ten (10) days from notice, but both parties failed to comply to do so up
to the present.
We note that the instant petition for review on certiorari suffers from a basic infirmity for lack of the
requisite imprimatur from the Office of the Solicitor General, hence, it is dismissible on that ground.
The general rule is that only the Solicitor General can bring or defend actions on behalf of the Republic
of the Philippines and that actions filed in the name of the Republic, or its agencies and
instrumentalities for that matter, if not initiated by the Solicitor General, will be summarily
dismissed.29
The authority of the Office of the Solicitor General to represent the Republic of the Philippines, its
agencies and instrumentalities, is embodied under Section 35(1), Chapter 12, Title III, Book IV of the
Administrative Code of 1987 which provides that:
SEC. 35. Powers and Functions.-The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and agents in any litigation,
proceeding, investigation or matter requiring the services of lawyers. When authorized by the
President or head of the office concerned, it shall also represent government owned or controlled
corporations. The Office of the Solicitor General shall constitute the law office of the Government and,
as such, shall discharge duties requiring the services of lawyers. It shall have the following specific
powers and functions:
(1) Represent the Government in the Supreme Court and the Court of Appeals in all criminal
proceedings; represent the Government and its officers in the Supreme Court, Court of Appeals, and
all other courts or tribunals in all civil actions and special proceedings in which the Government or any
officer thereof in his official capacity is a party.
The import of the above-quoted provision of the Administrative Code of 1987 is to impose upon the
Office of the Solicitor General the duty to appear as counsel for the Government, its agencies and
instrumentalites and its officials and agents before the Supreme Court, the Court of Appeals, and all
other courts and tribunals in any litigation, proceeding, investigation or matter requiring the services
31
of a lawyer. Its mandatory character was emphasized by this Court in the case of Gonzales v.
Chavez,30 thus:
It is patent that the intent of the lawmaker was to give the designated official, the Solicitor General, in
this case, the unequivocal mandate to appear for the government in legal proceedings. Spread out in
the laws creating the office is the discernible intent which may be gathered from the term "shall",
which is invariably employed, from Act No. 136 (1901) to the more recent Executive Order No. 292
(1987).
xxx - xxx - xxx
The decision of this Court as early as 1910 with respect to the duties of the Attorney-General well
applies to the Solicitor General under the facts of the present case. The Court then declared:
In this jurisdiction, it is the duty of the Attorney General 'to perform the duties imposed upon him by
law' and 'he shall prosecute all causes, civil and criminal, to which the Government of the Philippine
Islands, or any officer thereof, in his official capacity, is a party' xxx.
xxx - xxx - xxx
The Court is firmly convinced that considering the spirit and the letter of the law, there can be no
other logical interpretation of Sec. 35 of the Administrative Code than that it is, indeed, mandatory
upon the OSG to "represent the Government of the Philippines, its agencies and instrumentalities and
its officials and agents in any litigation, proceeding, investigation or matter requiring the services of a
lawyer."
As an exception to the general rule, the Solicitor General, in providing legal representation for the
government, is empowered under Section 35(8), Chapter 12, Title III, Book IV of the Administrative
Code of 1987 to "deputize legal officers of government departments, bureaus, agencies and offices to
assist the Solicitor General and appear or represent the Government in cases involving their respective
offices, brought before the courts and exercise supervision and control over such legal officers with
respect to such cases."
Petitioner claims that its counsel of record, Atty. Rogelio P. Madriaga, was deputized by the Solicitor
General to represent the CDA in the instant petition. To prove its claim, the petitioner attached to its
Reply to the Comment dated January 31, 2000, a photocopy of the alleged deputation letter 31 from
the Office of the Solicitor General signed by Hon. Carlos N. Ortega, Assistant Solicitor General,
addressed to CDA Chairman Jose C. Medina, Jr.
A close scrutiny of the alleged deputation letter from the Office of the Solicitor General shows,
however, that said counsel for the petitioner was only "authorized to appear as counsel in all civil
cases in the lower courts (RTCs and MTCs) wherein the CDA is a party-litigant". Likewise, the same
letter appears to be dated April 8, 1999 while the Petition for Review on Certiorari filed by the
petitioner was dated February 26, 1999. Clearly then, when the petition was filed with this Court on
March 3, 1999, Atty. Rogelio P. Madriaga was not yet deputized by the Office of the Solicitor General
to represent the CDA.
Even on the assumption that the alleged letter from the Office of the Solicitor General was intended to
validate or ratify the authority of counsel to represent the petitioner in this case, the same contains
certain conditions, one of which is that petitioner "shall submit to the Solicitor General,
for review, approval and signature, all important pleadings and motions, including motions to
withdraw complaints or appeals, as well as compromise agreements." Significantly, one of the major
pleadings filed subsequently by the petitioner in this case namely, the Reply to the Respondent's
Comment on the Petition dated January 31, 2000, does not have any indication that the same was
previously submitted to the Office of the Solicitor General for review or approval, much less bear the
requisite signature of the Solicitor General as required in the alleged deputation letter.
32
Nonetheless, in view of the novelty of the main issue raised in this petition concerning the nature and
scope of jurisdiction of the CDA in the settlement of cooperative disputes as well as the long standing
legal battle involving the management of DARBCI between two (2) opposing factions that inevitably
threatens the very existence of one of the country's major cooperatives, this Court has decided to act
on and determine the merits of the instant petition.
Section 3 of R.A. No. 6939 enumerates the powers, functions and responsibilities of the CDA, thus:
SEC. 3. Powers, Functions and Responsibilities.-The Authority shall have the following powers,
functions and responsibilities:
(a) Formulate, adopt and implement integrated and comprehensive plans and programs on
cooperative development consistent with the national policy on cooperatives and the overall socio-
economic development plan of the Government;
(b) Develop and conduct management and training programs upon request of cooperatives that will
provide members of cooperatives with the entrepreneurial capabilities, managerial expertise, and
technical skills required for the efficient operation of their cooperatives and inculcate in them the true
spirit of cooperativism and provide, when necessary, technical and professional assistance to ensure
the viability and growth of cooperatives with special concern for agrarian reform, fishery and
economically depressed sectors;
(c) Support the voluntary organization and consensual development of activities that promote
cooperative movements and provide assistance to wards upgrading managerial and technical expertise
upon request of the cooperatives concerned;
(d) Coordinate the effects of the local government units and the private sector in the promotion,
organization, and development of cooperatives;
(e) Register all cooperatives and their federations and unions, including their division, merger,
consolidation, dissolution or liquidation. It shall also register the transfer of all or substantially all of
their assets and liabilities and such other matters as may be required by the Authority;
(f) Require all cooperatives, their federations and unions to submit their annual financial statements,
duly audited by certified public accountants, and general information sheets;
(g) Order the cancellation after due notice and hearing of the cooperative's certificate of registration
for non-compliance with administrative requirements and in cases of voluntary dissolution;
(h) Assist cooperatives in arranging for financial and other forms of assistance under such terms and
conditions as are calculated to strengthen their viability and autonomy;
(i) Establish extension offices as may be necessary and financially viable to implement this Act.
Initially, there shall be extension offices in the Cities of Dagupan, Manila, Naga, Iloilo, Cebu, Cagayan
de Oro and Davao;
(j) Impose and collect reasonable fees and charges in connection with the registration of cooperatives;
(k) Administer all grants and donations coursed through the Government for cooperative
development, without prejudice to the right of cooperatives to directly receive and administer such
grants and donations upon agreement with the grantors and donors thereof;
(l) Formulate and adopt continuing policy initiatives consultation with the cooperative sector through
public hearing;
33
(m) Adopt rules and regulations for the conduct of its internal operations;
(n) Submit an annual report to the President and Congress on the state of the cooperative movement;
(o) Exercise such other functions as may be necessary to implement the provisions of the cooperative
laws and, in the performance thereof, the Authority may summarily punish for direct contempt any
person guilty of misconduct in the presence of the Authority which seriously interrupts any hearing or
inquiry with a fine of not more than five hundred pesos (P500.00) or imprisonment of not more than
ten (10) days, or both. Acts constituting indirect contempt as defined under Rule 71 of the Rules of
Court shall be punished in accordance with the said Rule.
It is a fundamental rule in statutory construction that when the law speaks in clear and categorical
language, there is no room for interpretation, vacillation or equivocation - there is only room for
application.32 It can be gleaned from the above-quoted provision of R.A. No. 6939 that the authority of
the CDA is to discharge purely administrative functions which consist of policy-making, registration,
fiscal and technical assistance to cooperatives and implementation of cooperative laws. Nowhere in the
said law can it be found any express grant to the CDA of authority to adjudicate cooperative disputes.
At most, Section 8 of the same law provides that "upon request of either or both parties, the Authority
shall mediate and conciliate disputes with a cooperative or between cooperatives" however, with a
restriction "that if no mediation or conciliation succeeds within three (3) months from request
thereof, a certificate of non-resolution shall be issued by the commission prior to the filing of
appropriate action before the proper courts". Being an administrative agency, the CDA has only such
powers as are expressly granted to it by law and those which are necessarily implied in the exercise
thereof.33
Petitioner CDA, however, insists that its authority to conduct hearings or inquiries and the express
grant to it of contempt powers under Section 3, paragraphs (g) and (o) of R. A. No. 6939,
respectively, necessarily vests upon the CDA quasi-judicial authority to adjudicate cooperative
disputes. A review of the records of the deliberations by both chambers of Congress prior to the
enactment of R.A. No. 6939 provides a definitive answer that the CDA is not vested with quasi-judicial
authority to adjudicate cooperative disputes. During the house deliberations on the then House Bill No.
10787, the following exchange transpired:
MR. AQUINO (A.). The response of the sponsor is not quite clear to this humble Representation. Let
me just point out other provisions under this particular section, which to the mind of this humble
Representation appear to provide this proposed Authority with certain quasi-judicial functions. Would I
be correct in this interpretation of paragraphs (f) and (g) under this section which state that among
the powers of the Authority are:
To administer the dissolution, disposal of assets and settlement of liabilities of any cooperative that
has been found to be inoperable, inactive or defunct.
To make appropriate action on cooperatives found to be in violation of any provision.
It appears to the mind of this humble Representation that the proposed Authority may be called upon
to adjudicate in these particular instances. Is it therefore vested with quasi-judicial authority?
MR. ROMUALDO. No, Mr. Speaker. We have to resort to the courts, for instance, for the dissolution of
cooperatives. The Authority only administers once a cooperative is dissolved. It is also the CDA which
initiates actions against any group of persons that may use the name of a cooperative to its
advantage, that is, if the word "cooperative" is merely used by it in order to advance its intentions,
Mr. Speaker.
MR. AQUINO (A.). So, is the sponsor telling us that the adjudication will have to be left to the courts of
law?
34
MR. ROMUALDO. To the courts, Mr. Speaker.34
xxx - xxx - xxx
MR. ADASA. One final question, Mr. Speaker. On page 4, line 33, it seems that one of the functions
given to the Cooperative Development Authority is to recommend the filing of legal charges against
any officer or member of a cooperative accused of violating the provisions of this Act, existing laws
and cooperative by-laws and other rules and regulations set forth by the government. Would this not
conflict with the function of the prosecuting fiscal?
MR. ROMUALDO. No, it will be the provincial fiscal that will file the case. The Authority only
recommends the filing of legal charges, that is, of course, after preliminary investigation conducted by
the provincial fiscal or the prosecuting arm of the government.
MR. ADASA. Does the Gentleman mean to say that the Cooperative Development Authority can take
the place of the private complainant or the persons who are the offended party if the latter would not
pursue the case?
MR. ROMULDO. Yes, Mr. Speaker. The Authority can initiate even the filing of the charges as embraced
and defined on line 33 of page 4 of this proposed bill.35
xxx - xxx - xxx
MR. CHIONGBIAN. xxx. Under the same section, line 28, subparagraph (g) says that the Authority can
take appropriate action on cooperatives found to be violating any provision of this Act, existing laws
and cooperative by-laws, and other rules and regulations set forth by the government by way of
withdrawal of Authority assistance, suspension of operation or cancellation of accreditation.
My question is: If a cooperative, whose officers are liable for wrongdoing, is found violating any of the
provisions of this Act, are we going to sacrifice the existence of that cooperative just because some of
the officers have taken advantage of their positions and misused some of the funds? It would be very
unfair for the Authority to withdraw its assistance at the expense of the majority. It is not clear as to
what the liabilities of the members of these cooperatives are.
xxx - xxx - xxx
MR. ROMUALDO. Mr. Speaker, before this action may be taken by the Authority, there will be due
process. However, this provision is applicable in cases where the cooperative as a whole violated the
provisions of this Act as well as existing laws. In this case, punitive actions may be taken against the
cooperative as a body.
With respect to the officials, if they themselves should be punished, then Section (h) of this chapter
provides that legal charges shall be filed by the Cooperative Development Authority. 36
In like manner, the deliberations on Senate Bill No. 485, which was the counterpart of House Bill No.
10787, yield the same legislative intent not to grant quasi-judicial authority to the CDA as shown by
the following discussions during the period of amendments:
SEN. ALVAREZ. On page 3, between lines 5 and 6, if I may, insert the following as one of the powers:
CONDUCT INQUIRIES, STUDIES, HEARINGS AND INVESTIGATIONS AND ISSUE ORDERS, DECISIONS
AND CIRCULARS AS MAY BE NECESSARY TO IMPLEMENT ALL LAWS, RULES AND REGULATIONS
RELATING TO COOPERATIVES. THE AGENCY MAY SUMMARILY PUNISH FOR CONTEMPT BY A FINE OF
NOT MORE THAN TWO HUNDRED PESOS (P200.00) OR IMPRISONMENT NOT EXCEEDING TEN (10)
DAYS, OR BOTH, ANY PERSONS GUILTY OF SUCH MISCONDUCT IN THE PRESENCE OF THE AGENCY
WHICH SERIOUSLY INTERRUPTS ANY HEARING OR INVESTIGATION, INCLUDING WILFULL FAILURE
35
OR REFUSAL, WITHOUT JUST CAUSE, COMPLY WITH A SUMMONS, SUBPOENA, SUBPOENA DUCES
TECUM, DECISION OR ORDER, RULE OR REGULATION, OR, BEING PRESENT AT A HEARING OR
INVESTIGATION, REFUSES TO BE SWORN IN AS A WITNESS OR TO ANSWER QUESTIONS OR TO
FURNISH INFORMATION REQUIRED BY THE AGENCY. THE SHERIFF AND/OR POLICE AGENCIES OF
THE PLACE WHERE THE HEARING OR INVESTIGATION IS CONDUCTED SHALL, UPON REQUEST OF
THE AGENCY, ASSIST IT TO ENFORCE THE PENALTY.
THE PRESIDENT. That is quite a long amendment. Does the Gentleman have a written copy of his
amendment, so that the Members will have an opportunity to go over it and examine its implications?
Anyway, why do we not hold in abeyance the proposed amendment? Do we have that?
xxx - xxx - xxx
SEN. ALVAREZ. Mr. President, this is almost an inherent power of a registering body. With the
tremendous responsibility that we have assigned to the Authority or the agency-for it to be able to
function and discharge its mandate-it will need this authority.
SEN. AQUINO. Yes, Mr. President, conceptually, we do not like the agency to have quasi-judicial
powers. And, we are afraid that if we empower the agency to conduct inquiries, studies, hearings and
investigations, it might interfere in the autonomous character of cooperatives. So, I am sorry Mr.
President, we don't accept the amendment.37
The decision to withhold quasi-judicial powers from the CDA is in accordance with the policy of the
government granting autonomy to cooperatives. It was noted that in the past 75 years cooperativism
failed to flourish in the Philippines. Of the 23,000 cooperatives organized under P.D. No. 175, only 10
to 15 percent remained operational while the rest became dormant. The dismal failure of
cooperativism in the Philippines was attributed mainly to the stifling attitude of the government
toward cooperatives. While the government wished to help, it invariably wanted to control. 38 Also, in
its anxious efforts to push cooperativism, it smothered cooperatives with so much help that they failed
to develop self-reliance. As one cooperative expert put it, "The strong embrace of government ends
with a kiss of death for cooperatives."39
But then, acknowledging the role of cooperatives as instruments of national development, the framers
of the 1987 Constitution directed Congress under Article XII, Section 15 thereof to create a centralized
agency that shall promote the viability and growth of cooperatives. Pursuant to this constitutional
mandate, the Congress approved on March 10, 1990 Republic Act No. 6939 which is the organic law
creating the Cooperative Development Authority. Apparently cognizant of the errors in the past,
Congress declared in an unequivocal language that the state shall "maintain the policy of non-
interference in the management and operation of cooperatives."40
After ascertaining the clear legislative intent underlying R.A. No. 6939, effect should be given to it by
the judiciary.41 Consequently, we hold and rule that the CDA is devoid of any quasi-judicial authority
to adjudicate intra-cooperative disputes and more particularly disputes as regards the election of the
members of the Board of Directors and officers of cooperatives. The authority to conduct hearings or
inquiries and the power to hold any person in contempt may be exercised by the CDA only in the
performance of its administrative functions under R.A. No. 6939.
The petitioner's reliance on the case of CANORECO is misplaced for the reason that the central issue
raised therein was whether or not the Office of the President has the authority to supplant or reverse
the resolution of an administrative agency, specifically the CDA, that had long became final and on
which issue we ruled in the negative. In fact, this Court declared in the said case that the CDA has no
jurisdiction to adjudicate intra-cooperative disputes thus:42
xxx - xxx - xxx
36
Obviously there was a clear case of intra-cooperative dispute. Article 121 of the Cooperative Code is
explicit on how the dispute should be resolved; thus:
ART. 121. Settlement of Disputes. - Disputes among members, officers, directors, and committee
members, and intra-cooperative disputes shall, as far as practicable, be settled amicably in
accordance with the conciliation or mediation mechanisms embodied in the by-laws of the cooperative,
and in applicable laws.
Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of
competent jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939, which provides:
SEC. 8. Mediation and Conciliation. - Upon request of either or both or both parties, the [CDA] shall
mediate and conciliate disputes with the cooperative or between cooperatives: Provided, That if no
mediation or conciliation succeeds within three (3) months from request thereof, a certificate of non-
resolution shall be issued by the request thereof, a certificate of non-resolution shall be issued by the
commission prior to the filing of appropriate action before the proper courts.
Likewise, we do not find any merit in the allegation of forum-shopping against the private
respondents. Forum-shopping exists where the elements of litis pendentia are present or where a final
judgment in one case will amount to res judicata in the other.43 The requisites for the existence of litis
pendentia, in turn, are (1) identity of parties or at least such representing the same interest in both
actions; (2) identity of rights asserted as prayed for, the relief being founded on the same facts; and
(3) the identity in both cases is such that the judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata to the other case.44
While there may be identity of parties between SP Civil Case No. 25 filed with the RTC of Polomolok,
South Cotabato, Branch 39, and CA-G.R. SP No. 47933 before the Court of Appeals, 13th Division, the
two (2) other requisites are not present. The Court of Appeals correctly observed that the case filed
with the RTC of Polomolok, South Cotabato was a petition for certiorari assailing the orders of therein
respondent CDA for having been allegedly issued without or in excess of jurisdiction. On the other
hand, the case filed with the Court of Appeals was a petition for prohibition seeking to restrain therein
respondent from further proceeding with the hearing of the case. Besides, the filing of the petition for
prohibition with the Court of Appeals was necessary after the CDA issued the Order dated May 26,
1998 which directed the holding of a special general assembly for purposes of conducting elections of
officers and members of the board of DARBCI after the Court of Appeals, 12 th Division, in CA-G.R. SP
No. 47318 issued a temporary restraining order enjoining the proceedings in Special Civil Case No. 25
and for the parties therein to maintain the status quo. Under the circumstances, the private
respondents could not seek immediate relief before the trial court and hence, they had to seek
recourse before the Court of Appeals via a petition for prohibition with a prayer for preliminary
injunction to forestall the impending damage and injury to them in view of the order issued by the
petitioner on May 26, 1998.
The filing of Special Civil Case No. 28 with the RTC of Polomolok, South Cotabato does not also
constitute forum-shopping on the part of the private respondents. Therein petitioner Investa, which
claims to have a subsisting lease agreement and a joint venture with DARBCI, is an entity whose
juridical personality is separate and distinct from that of private respondent cooperative or herein
individual private respondents and that they have totally different interests in the subject matter of
the case. Moreover, it was incorrect for the petitioner to charge the private respondents with forum-
shopping partly based on its erroneous claim that DARBCI and Investa were both represented by the
same counsel. A charge of forum-shopping may not be anchored simply on the fact that the counsel
for different petitioners in two (2) cases is one and the same.45 Besides, a review of the records of this
case shows that the counsel of record of Investa in Special Civil Case No. 28 is a certain Atty. Ignacio
D. Debuque, Jr. and not the same counsel representing the private respondents.46
37
Anent the petition-in-intervention, the intervenors aver that the Resolution of the Court of Appeals
dated February 9, 1999 in CA-G.R. SP No. 47933 denying the motion for reconsideration of herein
petitioner CDA also invalidated the election of officers and members of the board of directors of
DARBCI held during the special general assembly on July 12, 1998, thus adversely affecting their
substantial rights including their right to due process. They claim that the object of the order issued by
the appellate court on June 10, 1998 was to restrain the holding of the general assembly of DARBCI
as directed in the order of CDA Administrator Arcadio Lozada dated May 26, 1998. In compliance with
the said order of the Court of Appeals, no general assembly was held on June 14, 1998. However, due
to the grave concern over the alleged tyrannical administration and unmitigated abuses of herein
private respondents, the majority of the members of DARBCI, on their own initiative and in the
exercise of their inherent right to assembly under the law and the 1987 Constitution, convened a
general assembly on July 12, 1998. On the said occasion, the majority of the members of DARBCI
unanimously elected herein petitioners-in-intervention as new officers and members of the board of
directors of DARBCI,47 and thereby resulting in the removal of the private respondents from their
positions in DARBCI.
Petitioners-in-intervention pointed out that the validity of the general assembly held on July 12, 1998
was never raised as an issue in CA-G.R. SP No. 47933. The petitioners-in-intervention were not even
ordered by the Court of Appeals to file their comment on the "Twin Motions For Contempt of Court and
to Nullify Proceedings" filed by the private respondents on July 29, 1998.
As earlier noted, the Court of Appeals issued a temporary restraining order48 in CA-G.R. SP No. 47933
on June 10, 1998, the pertinent portion of which reads:
Meanwhile, respondents or any and all persons acting in their behalf and stead are temporarily
restrained from proceeding with the election of officers and members of the board of directors of the
Dolefil Agrarian Reform Beneficiaries Cooperative, Inc. scheduled on June 14, 1998 and or any other
date thereafter.
It was also noted that as a consequence of the temporary restraining order issued by the appellate
court, the general assembly and the election of officers and members of the board of directors of
DARBCI, pursuant to the resolution issued by CDA Administrator Arcadio S. Lozada, did not take place
as scheduled on June 14, 1998. However, on July 12, 1998 the majority of the members of DARBCI,
at their own initiative, held a general assembly and elected a new set of officers and members of the
board of directors of the cooperative which resulted in the ouster of the private respondents from their
posts in the said cooperative.
The incident on July 12, 1998 prompted herein private respondents to file their Twin Motions for
Contempt of Court and to Nullify Proceedings on July 26, 1998. The twin motions prayed, among
others, that after due notice and hearing, certain personalities, including the petitioners-in-
intervention, be cited in indirect contempt for their participation in the subject incident and for the
nullification of the election on July 12, 1998 for being illegal, contrary to the by-laws of the
cooperative and in defiance of the injunctive processes of the appellate court.
On September 9, 1998, the Court of Appeals, 13th Division, rendered a Decision in CA-G.R. SP No.
47933 which declared the CDA devoid of quasi-judicial jurisdiction to settle the dispute in CDA-CO
Case No. 97-011 without however, taking any action on the "Twin Motions for Contempt of Court and
to Nullify Proceedings" filed by the private respondents. As it turned out, it was only in its Resolution
dated February 9, 1999 denying petitioner's motion for reconsideration of the Decision in CA-G.R. SP
No. 47933 that the Court of Appeals, 13th Division, acted on the "Twin Motions for Contempt of Court
and to Nullify Proceedings" by declaring as null and void the election of the petitioners-in-intervention
on July 12, 1998 as officers and members of the board of directors of DARBCI.
We find, however, that the action taken by the Court of Appeals, 13th Division, on the "Twin Motions
for Contempt of Court and to Nullify Proceedings" insofar as it nullified the election of the officers and
members of the Board of Directors of DARBCI, violated the constitutional right of the petitioners-in-
intervention to due process. The requirement of due process is satisfied if the following conditions are
38
present, namely: (1) there must be a court or tribunal clothed with judicial power to hear and
determine the matter before it; (2) jurisdiction must be lawfully acquired over the person of the
defendant or over the property which is the subject of the proceedings; (3) the defendant must be
given an opportunity to be heard; and (4) judgment must be rendered upon lawful hearing.49 The
appellate court should have first required the petitioners-in-intervention to file their comment or
opposition to the said "Twin Motions For Contempt Of Court And to Nullify Proceedings" which also
refers to the elections held during the general assembly on July 12, 1998. It was precipitate for the
appellate court to render judgment against the petitioners-in-intervention in its Resolution dated
February 9, 1999 without due notice and opportunity to be heard. Besides, the validity of the general
assembly held on July 12, 1998 was not raised as an issue in CA-G.R. SP No. 47933.
WHEREFORE, judgment is hereby rendered as follows:
1. The petition for review on certiorari is hereby DENIED for lack of merit. The orders, resolutions,
memoranda and any other acts rendered by petitioner Cooperative Development Authority in CDA-CO
Case No. 97-011 are hereby declared null and void ab initio for lack of quasi-judicial authority of
petitioner to adjudicate intra-cooperative disputes; and the petitioner is hereby ordered to cease and
desist from taking any further proceedings therein; and
2. In the interest of justice, the dispositive portion of the Resolution of the Court of Appeals, dated
February 9, 1999, in CA-G.R. SP No. 47933, insofar as it nullified the elections of the members of the
Board of Directors and Officers of DARBCI held during the general assembly of the DARBCI members
on July 12, 1998, is hereby SET ASIDE.
No pronouncement as to costs.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
[G.R. No. L-45839. June 1, 1988.]
RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO FRANCO, AND LA SUERTE

TRANSPORTATION CORPORATION, Petitioners, v. HON. LEOPOLDO M. ABELLERA, ACTING
CHAIRMAN OF THE BOARD OF TRANSPORTATION, HON. GODOFREDO Q. ASUNCION, MEMBER OF
THE BOARD OF TRANSPORTATION, ARTURO DELA CRUZ, MS TRANSPORTATION CO., INC., NEW
FAMILIA TRANSPORTATION CO., ROBERTO MOJARES, ET AL., Respondents.
DECISION
GUTIERREZ, JR., J.:
This is a petition for certiorari and prohibition, with application for preliminary injunction, seeking the
annulment and inhibition of the grant or award of provisional permits or special authority by the respondent
Board of Transportation (BOT) to respondent taxicab operators, for the operation and legalization of "excess
taxicab units" under certain provisions of Presidential Decree No. 101 "despite the lapse of the power to do
so thereunder," and "in violation of other provisions of the Decree, Letter of Instructions No. 379 and other
relevant rules of the BOT."
cralaw virtua1a w libra ry
The petitioners and private respondents are all authorized taxicab operators in Metro Manila. The
39
respondents, however, admittedly operate "colorum" or "kabit" taxicab units. On or about the second week
of February, 1977, private respondents filed their petitions with the respondent Board for the legalization of
their unauthorized "excess" taxicab units citing Presidential Decree No. 101, promulgated on January 17,
1973, "to eradicate the harmful and unlawful trade of clandestine operators, by replacing or allowing them
to become legitimate and responsible operators." Within a matter of days, the respondent Board
promulgated its orders setting the applications for hearing and granting applicants provisional authority to
operate their "excess taxicab units" for which legalization was sought. Thus, the present petition.
Opposing the applications and seeking to restrain the grant of provisional permits or authority, as well as
the annulment of permits already granted under PD 101, the petitioners allege that the BOT acted without
jurisdiction in taking cognizance of the petitions for legalization and awarding special permits to the private
respondents.
Presidential Decree No. 101 vested in the Board of Transportation the power, among others "To grant
special permits of limited term for the operation of public utility motor vehicles as may, in the judgment of
the Board, be necessary to replace or convert clandestine operators into legitimate and responsible
operators." (Section 1, PD 101)
Citing, however, Section 4 of the Decree which provides: jgc:chan roble s.com.p h
"SEC. 4. Transitory Provision. — Six months after the promulgation of this Decree, the Board of
Transportation, the Bureau of Transportation, The Philippine Constabulary, the city and municipal forces,
and the provincial and city fiscals shall wage a concerted and relentless drive towards the total elimination
and punishment of all clandestine and unlawful operators of public utility motor vehicles." cralaw virtua1aw l ibra ry
the petitioners argue that neither the Board of Transportation chairman nor any member thereof had the
power, at the time the petitions were filed (i.e. in 1977), to legitimize clandestine operations under PD 101
as such power had been limited to a period of six (6) months from and after the promulgation of the Decree
on January 17, 1973. They state that, thereafter, the power lapses and becomes functus officio. chanro bles vi rtua lawlib rary chan roble s.com:cha nro bles. com.ph
To reinforce their stand, the petitioners refer to certain provisions of the Rules and Regulations
implementing PD 101 issued by respondent Board, Letter of Instructions No. 379, and BOT Memorandum
Circular No. 76-25 (a). In summary, these rules provide inter alia that (1) only applications for special
permits for "colorum" or "kabit" operators filed before July 17, 1973 shall be accepted and processed (Secs.
3 and 16 (c), BOT-LTC-HPG Joint Regulations Implementing PD 101, pp. 33 and 47, Rollo); (2) Every
provisional authority given to any taxi operator shall be cancelled immediately and no provisional authority
shall thereafter be issued (par. 6, Letter of Instructions No. 379, issued March 10, 1976, p. 58, Rollo); (3)
Effective immediately, no provisional authorities on applications for certificates of public convenience shall
be granted or existing provisional authorities on new applications extended to, among others, taxi
denominations in Metro Manila (BOT Memorandum Circular No. 75-25 (a), August 30, 1976, p. 64, Rollo);
(4) All taxis authorized to operate within Metro Manila shall obtain new special permits from the BOT, which
permits shall be the only ones recognized within the area (par. 8, LOI No. 379, supra); and (5) No bonafide
applicant may apply for special permit to operate, among others, new taxicab services, and, no application
for such new service shall be accepted for filing or processed by any LTC agency or granted under these
regulations by any LTC Regional Office until after it shall have announced its program of development for
these types of public motor vehicles (Sec. 16d, BOT-LTC-HPG Joint Regulations, p. 47, Rollo).
The petitioners raise the following issues: jgc:cha nro bles.c om.ph
"I. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO GRANT PROVISIONAL
PERMITS TO OPERATE DESPITE THE BAN THEREON UNDER LETTER OF INSTRUCTIONS NO. 379;
"II. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO LEGALIZE, AT THIS TIME,
CLANDESTINE AND UNLAWFUL TAXICAB OPERATIONS UNDER SECTION 1, P.D. 101; AND
"III. WHETHER OR NOT THE PROCEDURE BEING FOLLOWED BY THE BOARD IN THE CASES IN QUESTION
SATISFIES THE PROCEDURAL DUE PROCESS REQUIREMENTS." (p. 119, Rollo)
We need not pass upon the first issue raised anent the grant of provisional authority to respondents.
Considering that the effectivity of the provisional permits issued to the respondents was expressly limited to
June 30, 1977, as evidenced by the BOT orders granting the same (Annexes G, H, I and J among others)
and Memorandum Circular No. 77-4 dated January 20, 1977 (p. 151, Rollo), implementing paragraph 6 of
40
LOI 379 (ordering immediate cancellation of all provisional authorities issued to taxicab operators, supra),
which provides: jgc: chan robles .com.p h
"5. After June 30, 1977, all provisional authorities are deemed cancelled, even if hearings on the main
application have not been terminated." cralaw virt ua1aw li bra ry
the issue is MOOT and ACADEMIC. Only the issue on legalization remains under consideration.
Justifying its action on private respondent’s applications, the respondent Board emphasizes public need as
the overriding concern. It is argued that under PD 101, it is the fixed policy of the State "to eradicate the
harmful and unlawful trade of clandestine operators by replacing or allowing them to become legitimate and
responsible ones" (Whereas clause, PD 101). In view thereof, it is maintained that respondent Board may
continue to grant to "colorum" operators the benefits of legalization under PD 101, despite the lapse of its
power, after six (6) months, to do so, without taking punitive measures against the said operators.
Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue
provisional permits as a step towards the legalization of colorum taxicab operations without the alleged time
limitation. There is nothing in Section 4, cited by the petitioners, to suggest the expiration of such powers
six (6) months after promulgation of the Decree. Rather, it merely provides for the withdrawal of the State’s
waiver of its right to punish said colorum operators for their illegal acts. In other words, the cited section
declares when the period of moratorium suspending the relentless drive to eliminate illegal operators shall
end. Clearly, there is no impediment to the Board’s exercise of jurisdiction under its broad powers under the
Public Service Act to issue certificates of public convenience to achieve the avowed purpose of PD 101 (Sec.
16a, Public Service Act, Nov. 7, 1936).
It is a settled principle of law that in determining whether a board or commission has a certain power, the
authority given should be liberally construed in the light of the purposes for which it was created, and that
which is incidentally necessary to a full implementation of the legislative intent should be upheld as being
germane to the law. Necessarily, too, where the end is required, the appropriate means are deemed given
(Martin, Administrative Law, 1979, p. 46). Thus, as averred by the respondents: cha nrob les vi rtua lawlib rary c han robles .com:chan roble s.com.p h
". . . [A]ll things considered, the question is what is the best for the interest of the public. Whether PD 101
has lost its effectiveness or not, will in no way prevent this Board from resolving the question in the same
candor and spirit that P.D. 101 and LOI 379 were issued to cope with the multifarious ills that plague our
transport system. . . ." (Italics ours) (pp. 91-92, Rollo)
This, the private respondents appreciate, as they make reference to PD 101, merely to cite the compassion
with which colorum operators were dealt with under the law. They state that it is "in the same vein and
spirit that this Honorable Board has extended the Decree of legalization to the operatives of the various PUJ
and PUB services along legislative methods," that respondents pray for authorization of their colorum units
in actual operation in Metro Manila (Petitions for Legalization, Annexes E & F, par. 7, pp. 65-79, Rollo).
Anent the petitioners’ reliance on the BOT Rules and Regulations Implementing PD 101 as well as its
Memorandum Circular No. 76-25(a), the BOT itself has declared: jgc:c han robles. com.ph
"In line with its duty to rationalize the transport industry, the Board shall, from time to time, re-study the
public need for public utilities in any area in the Philippines for the purpose of re-evaluating the policies." (p.
64, Rollo)
Thus, the respondents correctly argue that "as the need of the public changes and oscillates with the trends
of modern life, so must the Memo Orders issued by respondent jibe with the dynamic and flexible standards
of public needs. . . . Respondent Board is not supposed to ‘tie its hands’ on its issued Memo Orders should
public interest demand otherwise" (Answer of private respondents, p. 121, Rollo). chan robles v irt ual lawl ibra ry
The fate of the private respondent’s petitions is initially for the Board to determine. From the records of the
case, acceptance of the respondent’s applications appears to be a question correctly within the discretion of
the respondent Board to decide. As a rule, where the jurisdiction of the BOT to take cognizance of an
application for legalization is settled, the Court enjoins the exercise thereof only when there is fraud, abuse
of discretion or error of law. Furthermore, the court does not interfere, as a rule, with administrative action
prior to its completion or finality. It is only after judicial review is no longer premature that we ascertain in
proper cases whether the administrative findings are not in violation of law, whether they are free from
fraud or imposition and whether they find substantial support from the evidence.
41
Finally, with respect to the last issue raised by the petitioners alleging the denial of due process by
respondent Board in granting the provisional permits to the private respondents and in taking cognizance of
their applications for legalization without notice and hearing, suffice it to say that PD 101 does not require
such notice or hearing for the grant of temporary authority. The provisional nature of the authority and the
fact that the primary application shall be given a full hearing are the safeguards against its abuse. As to the
applications for legalization themselves, the Public Service Act does enjoin the Board to give notice and
hearing before exercising any of its powers under Sec. 16 thereof. However, the allegations that due process
has been denied are negated by the hearings set by the Board on the applications as expressed in its orders
resolving the petitions for special permits (Annexes G, H, I, pp. 80-102, Rollo).
The Board stated: jgc:chanro bles. com.ph
"The grounds involved in the petition are of first impression. It cannot resolve the issue ex-parte. It needs to
hear the views of other parties who may have an interest, or whose interest may be affected by any decision
that this Board may take.
"The Board therefore, decides to set the petition for hearing. . . . .
As to the required notice, it is impossible for the respondent Board to give personal notice to all parties who
may be interested in the matter, which parties are unknown to it. Its aforementioned order substantially
complies with the requirement. The petitioners having been able to timely oppose the petitions in question,
any lack of notice is deemed cured.
WHEREFORE, the petition is hereby DISMISSED for lack of merit. The questioned orders of the then Board of
Transportation are AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 110120 March 16, 1994
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC, Branch 127,
Caloocan City, HON. MACARIO A. ASISTIO, JR., City Mayor of Caloocan and/or THE CITY
GOVERNMENT OF CALOOCAN, respondents.
Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner.
The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr. and the City
Government of Caloocan.
ROMERO, J.:
The clash between the responsibility of the City Government of Caloocan to dispose off the 350 tons
of garbage it collects daily and the growing concern and sensitivity to a pollution-free environment of
42
the residents of Barangay Camarin, Tala Estate, Caloocan City where these tons of garbage are
dumped everyday is the hub of this controversy elevated by the protagonists to the Laguna Lake
Development Authority (LLDA) for adjudication.
The instant case stemmed from an earlier petition filed with this Court by Laguna Lake Development
Authority (LLDA for short) docketed as G.R.
No. 107542 against the City Government of Caloocan, et al. In the Resolution of November 10,
1992, this Court referred G.R. No. 107542 to the Court of Appeals for appropriate disposition.
Docketed therein as CA-G.R. SP
No. 29449, the Court of Appeals, in a decision1 promulgated on January 29, 1993 ruled that the
LLDA has no power and authority to issue a cease and desist order enjoining the dumping of
garbage in Barangay Camarin, Tala Estate, Caloocan City. The LLDA now seeks, in this petition, a
review of the decision of the Court of Appeals.
The facts, as disclosed in the records, are undisputed.
On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay
Camarin, Caloocan City, filed a letter-complaint2 with the Laguna Lake Development Authority
seeking to stop the operation of the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay
Camarin, Caloocan City due to its harmful effects on the health of the residents and the possibility of
pollution of the water content of the surrounding area.
On November 15, 1991, the LLDA conducted an on-site investigation, monitoring and test sampling
of the leachate3 that seeps from said dumpsite to the nearby creek which is a tributary of the Marilao
River. The LLDA Legal and Technical personnel found that the City Government of Caloocan was
maintaining an open dumpsite at the Camarin area without first securing an Environmental
Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the
Department of Environment and Natural Resources, as required under Presidential Decree No.
1586,4 and clearance from LLDA as required under Republic Act No. 4850,5 as amended by
Presidential Decree No. 813 and Executive Order No. 927, series of 1983.6
After a public hearing conducted on December 4, 1991, the LLDA, acting on the complaint of Task
Force Camarin Dumpsite, found that the water collected from the leachate and the receiving streams
could considerably affect the quality, in turn, of the receiving waters since it indicates the presence of
bacteria, other than coliform, which may have contaminated the sample during collection or
handling.7 On December 5, 1991, the LLDA issued a Cease and Desist Order8 ordering the City
Government of Caloocan, Metropolitan Manila Authority, their contractors, and other entities, to
completely halt, stop and desist from dumping any form or kind of garbage and other waste matter at
the Camarin dumpsite.
The dumping operation was forthwith stopped by the City Government of Caloocan. However,
sometime in August 1992 the dumping operation was resumed after a meeting held in July 1992
among the City Government of Caloocan, the representatives of Task Force Camarin Dumpsite and
LLDA at the Office of Environmental Management Bureau Director Rodrigo U. Fuentes failed to
settle the problem.
After an investigation by its team of legal and technical personnel on August 14, 1992, the LLDA
issued another order reiterating the December 5, 1991, order and issued an Alias Cease and Desist
Order enjoining the City Government of Caloocan from continuing its dumping operations at the
Camarin area.
43
On September 25, 1992, the LLDA, with the assistance of the Philippine National Police, enforced its
Alias Cease and Desist Order by prohibiting the entry of all garbage dump trucks into the Tala
Estate, Camarin area being utilized as a dumpsite.
Pending resolution of its motion for reconsideration earlier filed on September 17, 1992 with the
LLDA, the City Government of Caloocan filed with the Regional Trial Court of Caloocan City an
action for the declaration of nullity of the cease and desist order with prayer for the issuance of writ
of injunction, docketed as Civil Case No. C-15598. In its complaint, the City Government of
Caloocan sought to be declared as the sole authority empowered to promote the health and safety
and enhance the right of the people in Caloocan City to a balanced ecology within its territorial
jurisdiction.9
On September 25, 1992, the Executive Judge of the Regional Trial Court of Caloocan City issued a
temporary restraining order enjoining the LLDA from enforcing its cease and desist order.
Subsequently, the case was raffled to the Regional Trial Court, Branch 126 of Caloocan which, at
the time, was presided over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127,
the pairing judge of the recently-retired presiding judge.
The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the ground, among others,
that under Republic Act No. 3931, as amended by Presidential Decree No. 984, otherwise known as
the Pollution Control Law, the cease and desist order issued by it which is the subject matter of the
complaint is reviewable both upon the law and the facts of the case by the Court of Appeals and not
by the Regional Trial Court. 10
On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating Civil Case No. C-
15598 with Civil Case No. C-15580, an earlier case filed by the Task Force Camarin Dumpsite
entitled "Fr. John Moran, et al. vs. Hon. Macario Asistio." The LLDA, however, maintained during the
trial that the foregoing cases, being independent of each other, should have been treated separately.
On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to dismiss, issued in the
consolidated cases an order11 denying LLDA's motion to dismiss and granting the issuance of a writ
of preliminary injunction enjoining the LLDA, its agent and all persons acting for and on its behalf,
from enforcing or implementing its cease and desist order which prevents plaintiff City of Caloocan
from dumping garbage at the Camarin dumpsite during the pendency of this case and/or until further
orders of the court.
On November 5, 1992, the LLDA filed a petition for certiorari, prohibition and injunction with prayer
for restraining order with the Supreme Court, docketed as G.R. No. 107542, seeking to nullify the
aforesaid order dated October 16, 1992 issued by the Regional Trial Court, Branch 127 of Caloocan
City denying its motion to dismiss.
The Court, acting on the petition, issued a Resolution12 on November 10, 1992 referring the case to
the Court of Appeals for proper disposition and at the same time, without giving due course to the
petition, required the respondents to comment on the petition and file the same with the Court of
Appeals within ten (10) days from notice. In the meantime, the Court issued a temporary restraining
order, effective immediately and continuing until further orders from it, ordering the respondents: (1)
Judge Manuel Jn. Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to
cease and desist from exercising jurisdiction over the case for declaration of nullity of the cease and
desist order issued by the Laguna Lake Development Authority (LLDA); and (2) City Mayor of
Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at
the Tala Estate, Barangay Camarin, Caloocan City.
44
Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr. filed on November 12,
1992 a motion for reconsideration and/or to quash/recall the temporary restraining order and an
urgent motion for reconsideration alleging that ". . . in view of the calamitous situation that would
arise if the respondent city government fails to collect 350 tons of garbage daily for lack of dumpsite
(i)t is therefore, imperative that the issue be resolved with dispatch or with sufficient leeway to allow
the respondents to find alternative solutions to this garbage problem."
On November 17, 1992, the Court issued a Resolution13 directing the Court of Appeals to
immediately set the case for hearing for the purpose of determining whether or not the temporary
restraining order issued by the Court should be lifted and what conditions, if any, may be required if
it is to be so lifted or whether the restraining order should be maintained or converted into a
preliminary injunction.
The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in the morning at the
Hearing Room, 3rd Floor, New Building, Court of Appeals.14 After the oral argument, a conference
was set on December 8, 1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the
General Manager of LLDA, the Secretary of DENR or his duly authorized representative and the
Secretary of DILG or his duly authorized representative were required to appear.
It was agreed at the conference that the LLDA had until December 15, 1992 to finish its study and
review of respondent's technical plan with respect to the dumping of its garbage and in the event of a
rejection of respondent's technical plan or a failure of settlement, the parties will submit within 10
days from notice their respective memoranda on the merits of the case, after which the petition shall
be deemed submitted for resolution.15 Notwithstanding such efforts, the parties failed to settle the
dispute.
On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1) the Regional Trial
Court has no jurisdiction on appeal to try, hear and decide the action for annulment of LLDA's cease
and desist order, including the issuance of a temporary restraining order and preliminary injunction in
relation thereto, since appeal therefrom is within the exclusive and appellate jurisdiction of the Court
of Appeals under Section 9, par. (3), of Batas Pambansa Blg. 129; and (2) the Laguna Lake
Development Authority has no power and authority to issue a cease and desist order under its
enabling law, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order
No. 927, series of 1983.
The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary injunction issued in
the said case was set aside; the cease and desist order of LLDA was likewise set aside and the
temporary restraining order enjoining the City Mayor of Caloocan and/or the City Government of
Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin,
Caloocan City was lifted, subject, however, to the condition that any future dumping of garbage in
said area, shall be in conformity with the procedure and protective works contained in the proposal
attached to the records of this case and found on pages 152-160 of the Rollo, which was thereby
adopted by reference and made an integral part of the decision, until the corresponding restraining
and/or injunctive relief is granted by the proper Court upon LLDA's institution of the necessary legal
proceedings.
Hence, the Laguna Lake Development Authority filed the instant petition for review on certiorari, now
docketed as G.R. No. 110120, with prayer that the temporary restraining order lifted by the Court of
Appeals be re-issued until after final determination by this Court of the issue on the proper
interpretation of the powers and authority of the LLDA under its enabling law.
45
On July, 19, 1993, the Court issued a temporary restraining order16 enjoining the City Mayor of
Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at
the Tala Estate, Barangay Camarin, Caloocan City, effective as of this date and containing until
otherwise ordered by the Court.
It is significant to note that while both parties in this case agree on the need to protect the
environment and to maintain the ecological balance of the surrounding areas of the Camarin open
dumpsite, the question as to which agency can lawfully exercise jurisdiction over the matter remains
highly open to question.
The City Government of Caloocan claims that it is within its power, as a local government unit,
pursuant to the general welfare provision of the Local Government Code, 17 to determine the effects
of the operation of the dumpsite on the ecological balance and to see that such balance is
maintained. On the basis of said contention, it questioned, from the inception of the dispute before
the Regional Trial Court of Caloocan City, the power and authority of the LLDA to issue a cease and
desist order enjoining the dumping of garbage in the Barangay Camarin over which the City
Government of Caloocan has territorial jurisdiction.
The Court of Appeals sustained the position of the City of Caloocan on the theory that Section 7 of
Presidential Decree No. 984, otherwise known as the Pollution Control law, authorizing the defunct
National Pollution Control Commission to issue an ex-parte cease and desist order was not
incorporated in Presidential Decree No. 813 nor in Executive Order No. 927, series of
1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act No. 4850, as
amended, the LLDA is instead required "to institute the necessary legal proceeding against any
person who shall commence to implement or continue implementation of any project, plan or
program within the Laguna de Bay region without previous clearance from the Authority."
The LLDA now assails, in this partition for review, the abovementioned ruling of the Court of
Appeals, contending that, as an administrative agency which was granted regulatory and
adjudicatory powers and functions by Republic Act No. 4850 and its amendatory laws, Presidential
Decree No. 813 and Executive Order No. 927, series of 1983, it is invested with the power and
authority to issue a cease and desist order pursuant to Section 4 par. (c), (d), (e), (f) and (g) of
Executive Order No. 927 series of 1983 which provides, thus:
Sec. 4. Additional Powers and Functions. The authority shall have the following
powers and functions:
xxx xxx xxx
(c) Issue orders or decisions to compel compliance with the provisions of this
Executive Order and its implementing rules and regulations only after proper notice
and hearing.
(d) Make, alter or modify orders requiring the discontinuance of pollution specifying
the conditions and the time within which such discontinuance must be accomplished.
(e) Issue, renew, or deny permits, under such conditions as it may determine to be
reasonable, for the prevention and abatement of pollution, for the discharge of
sewage, industrial waste, or for the installation or operation of sewage works and
industrial disposal system or parts thereof.
46
(f) After due notice and hearing, the Authority may also revoke, suspend or modify
any permit issued under this Order whenever the same is necessary to prevent or
abate pollution.
(g) Deputize in writing or request assistance of appropriate government agencies or

instrumentalities for the purpose of enforcing this Executive Order and its
implementing rules and regulations and the orders and decisions of the Authority.
The LLDA claims that the appellate court deliberately suppressed and totally disregarded the above
provisions of Executive Order No. 927, series of 1983, which granted administrative quasi-judicial
functions to LLDA on pollution abatement cases.
In light of the relevant environmental protection laws cited which are applicable in this case, and the
corresponding overlapping jurisdiction of government agencies implementing these laws, the
resolution of the issue of whether or not the LLDA has the authority and power to issue an order
which, in its nature and effect was injunctive, necessarily requires a determination of the threshold
question: Does the Laguna Lake Development Authority, under its Charter and its amendatory laws,
have the authority to entertain the complaint against the dumping of garbage in the open dumpsite in
Barangay Camarin authorized by the City Government of Caloocan which is allegedly endangering
the health, safety, and welfare of the residents therein and the sanitation and quality of the water in
the area brought about by exposure to pollution caused by such open garbage dumpsite?
The matter of determining whether there is such pollution of the environment that requires control, if
not prohibition, of the operation of a business establishment is essentially addressed to the
Environmental Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive
Order No. 192, series of 1987,18 has assumed the powers and functions of the defunct National
Pollution Control Commission created under Republic Act No. 3931. Under said Executive Order, a
Pollution Adjudication Board (PAB) under the Office of the DENR Secretary now assumes the
powers and functions of the National Pollution Control Commission with respect to adjudication of
pollution cases. 19
As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication
Board (PAB), except in cases where the special law provides for another forum. It must be
recognized in this regard that the LLDA, as a specialized administrative agency, is specifically
mandated under Republic Act No. 4850 and its amendatory laws to carry out and make effective the
declared national policy20 of promoting and accelerating the development and balanced growth of the
Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo,
Manila, Pasay, Quezon and Caloocan21 with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant
and power and authority, the LLDA, by virtue of its special charter, obviously has the responsibility to
protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants
emanating from the discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to pass upon and approve or
disapprove all plans, programs, and projects proposed by local government offices/agencies within
the region, public corporations, and private persons or enterprises where such plans, programs
and/or projects are related to those of the LLDA for the development of the region. 22
In the instant case, when the complainant Task Force Camarin Dumpsite of Our Lady of Lourdes
Parish, Barangay Camarin, Caloocan City, filed its letter-complaint before the LLDA, the latter's
jurisdiction under its charter was validly invoked by complainant on the basis of its allegation that the
open dumpsite project of the City Government of Caloocan in Barangay Camarin was undertaken
47
without a clearance from the LLDA, as required under Section 4, par. (d), of Republic Act. No. 4850,
as amended by P.D. No. 813 and Executive Order No. 927. While there is also an allegation that the
said project was without an Environmental Compliance Certificate from the Environmental
Management Bureau (EMB) of the DENR, the primary jurisdiction of the LLDA over this case was
recognized by the Environmental Management Bureau of the DENR when the latter acted as
intermediary at the meeting among the representatives of the City Government of Caloocan, Task
Force Camarin Dumpsite and LLDA sometime in July 1992 to discuss the possibility of
re-opening the open dumpsite.
Having thus resolved the threshold question, the inquiry then narrows down to the following issue:
Does the LLDA have the power and authority to issue a "cease and desist" order under Republic Act
No. 4850 and its amendatory laws, on the basis of the facts presented in this case, enjoining the
dumping of garbage in Tala Estate, Barangay Camarin, Caloocan City.
The irresistible answer is in the affirmative.
The cease and desist order issued by the LLDA requiring the City Government of Caloocan to stop
dumping its garbage in the Camarin open dumpsite found by the LLDA to have been done in
violation of Republic Act No. 4850, as amended, and other relevant environment laws,23 cannot be
stamped as an unauthorized exercise by the LLDA of injunctive powers. By its express terms,
Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983,
authorizes the LLDA to "make, alter or modify order requiring the discontinuance or
pollution."24 (Emphasis supplied) Section 4, par. (d) explicitly authorizes the LLDA to make whatever
order may be necessary in the exercise of its jurisdiction.
To be sure, the LLDA was not expressly conferred the power "to issue and ex-parte cease and
desist order" in a language, as suggested by the City Government of Caloocan, similar to the
express grant to the defunct National Pollution Control Commission under Section 7 of P.D. No. 984
which, admittedly was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it
would be a mistake to draw therefrom the conclusion that there is a denial of the power to issue the
order in question when the power "to make, alter or modify orders requiring the discontinuance of
pollution" is expressly and clearly bestowed upon the LLDA by Executive Order No. 927, series of
1983.
Assuming arguendo that the authority to issue a "cease and desist order" were not expressly
conferred by law, there is jurisprudence enough to the effect that the rule granting such authority
need not necessarily be express.25 While it is a fundamental rule that an administrative agency has
only such powers as are expressly granted to it by law, it is likewise a settled rule that an
administrative agency has also such powers as are necessarily implied in the exercise of its express
powers.26 In the exercise, therefore, of its express powers under its charter as a regulatory and
quasi-judicial body with respect to pollution cases in the Laguna Lake region, the authority of the
LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise, it may well be reduced to
a "toothless" paper agency.
In this connection, it must be noted that in Pollution Adjudication Board v. Court of Appeals, et
al.,27 the Court ruled that the Pollution Adjudication Board (PAB) has the power to issue an ex-
parte cease and desist order when there is prima facie evidence of an establishment exceeding the
allowable standards set by the anti-pollution laws of the country. The ponente, Associate Justice
Florentino P. Feliciano, declared:
Ex parte cease and desist orders are permitted by law and regulations in situations
like that here presented precisely because stopping the continuous discharge of
48
pollutive and untreated effluents into the rivers and other inland waters of the
Philippines cannot be made to wait until protracted litigation over the ultimate
correctness or propriety of such orders has run its full course, including multiple and
sequential appeals such as those which Solar has taken, which of course may take
several years. The relevant pollution control statute and implementing regulations
were enacted and promulgated in the exercise of that pervasive, sovereign power to
protect the safety, health, and general welfare and comfort of the public, as well as
the protection of plant and animal life, commonly designated as the police power. It is
a constitutional commonplace that the ordinary requirements of procedural due
process yield to the necessities of protecting vital public interests like those here
involved, through the exercise of police power. . . .
The immediate response to the demands of "the necessities of protecting vital public interests" gives
vitality to the statement on ecology embodied in the Declaration of Principles and State Policies or
the 1987 Constitution. Article II, Section 16 which provides:
The State shall protect and advance the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature.
As a constitutionally guaranteed right of every person, it carries the correlative duty of non-
impairment. This is but in consonance with the declared policy of the state "to protect and promote
the right to health of the people and instill health consciousness among them."28 It is to be borne in
mind that the Philippines is party to the Universal Declaration of Human Rights and the Alma
Conference Declaration of 1978 which recognize health as a fundamental human right. 29
The issuance, therefore, of the cease and desist order by the LLDA, as a practical matter of
procedure under the circumstances of the case, is a proper exercise of its power and authority under
its charter and its amendatory laws. Had the cease and desist order issued by the LLDA been
complied with by the City Government of Caloocan as it did in the first instance, no further legal
steps would have been necessary.
The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring upon the LLDA the
means of directly enforcing such orders, has provided under its Section 4 (d) the power to institute
"necessary legal proceeding against any person who shall commence to implement or continue
implementation of any project, plan or program within the Laguna de Bay region without previous
clearance from the LLDA."
Clearly, said provision was designed to invest the LLDA with sufficiently broad powers in the
regulation of all projects initiated in the Laguna Lake region, whether by the government or the
private sector, insofar as the implementation of these projects is concerned. It was meant to deal
with cases which might possibly arise where decisions or orders issued pursuant to the exercise of
such broad powers may not be obeyed, resulting in the thwarting of its laudabe objective. To meet
such contingencies, then the writs of mandamus and injunction which are beyond the power of the
LLDA to issue, may be sought from the proper courts.
Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake region and its
surrounding provinces, cities and towns are concerned, the Court will not dwell further on the related
issues raised which are more appropriately addressed to an administrative agency with the special
knowledge and expertise of the LLDA.
WHEREFORE, the petition is GRANTED. The temporary restraining order issued by the Court on
July 19, 1993 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan from
49
dumping their garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby made
permanent.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-7567 November 12, 1912
THE UNITED STATES, plaintiff-appellee,

vs.
SEGUNDO BARIAS, defendant-appellant.
Bruce, Lawrence, Ross and Block for appellant.

Office of the Solicitor-General Harvey, for appellee.
CARSON, J.:
This is an appeal from a sentence imposed by the Honorable A. S. Crossfield, judge of the Court of
First Instance of Manila, for homicide resulting from reckless negligence. The information charges:
That on or about November 2, 1911, in the city of Manila, Philippine Islands, the said
Segundo Barias was a motorman on street car No. 9, run 7 of the Pasay-Cervantes lines of
the Manila Electric Railroad and Light Company, a corporation duly organized and doing
business in the city of Manila, Philippine Islands; as a such motorman he was controlling and
operating said street car along Rizal Avenue, formerly Calle Cervantes, of this city, and as
such motorman of the said street car he was under obligation to run the same with due care
and diligence to avoid any accident that might occur to vehicles and pedestrians who were
travelling on said Rizal Avenue; said accused, at said time and place, did willfully, with
reckless imprudence and inexcusable negligence and in violation of the regulations
promulgated to that effect, control and operate said street car, without heeding the
pedestrians crossing Rizal Avenue from one side to the other, thus knocking down and
causing by his carelessness and imprudent negligence that said street car No. 9, operated
and controlled by said accused, as hereinbefore stated, should knock down and pass over
the body and head of one Fermina Jose, a girl 2 years old, who at said time and place was
crossing the said Rizal Avenue, the body of said girl being dragged along street-car on said
Rizal Avenue for a long distance, thus crushing and destroying her head and causing her
sudden death as a result of the injury received; that if the acts executed by the accused had
been done with malice, he would be guilty of the serious crime of homicide.
The defendant was a motorman for the Manila Electric Railroad and Light Company. At about 6
o'clock on the morning of November 2, 1911, he was driving his car along Rizal avenue and stopped
it near the intersection of that street with Calle Requesen to take on some passengers. When the car
stopped, the defendant looked backward, presumably to note whether all the passengers were
50
aboard, and then started his car. At that moment Fermina Jose, a child about 3 years old, walked or
ran in front of he car. She was knocked down and dragged some little distance underneath the car,
and was left dead upon the track. The motorman proceeded with his car to the end of the track,
some distance from the place of the accident, and apparently knew nothing of it until his return,
when he was informed of what happened.
There is no substantial dispute as to the facts. It is true that one witness testified that the defendant
started the car without turning his head, and while he was still looking backwards and that this
testimony was directly contradicted by that of another witness. But we do not deem it necessary to
make an express finding as to the precise direction in which the defendant's head was turned at the
moment when he started his car. It is sufficient for the purpose of our decision to hold, as we do, that
the evidence clearly discloses that he started his car from a standstill without looking over the track
immediately in front of the car to satisfy himself that it was clear. he did not see the child until after
he had run his car over it, and after he had return to the place where it was found dead, and we think
we are justified in saying that whenever he was looking at the moment when he started his car, he
was not looking at the track immediately in front of the car, and that he had not satisfied himself that
this portion of the tract was clear immediately before putting the car in the motion.
The trial court found the defendant guilty of imprudencia temeraria (reckless negligence) as charged
in the information, and sentenced him to over one year and one month of imprisonment in the Bilibid
Prison, and to pay the cause of the action.
The sole question raised by this appeal is whether the evidence shows such carelessness or want of
ordinary care on the part of the defendant as to amount to reckless negligence (imprudencia
temeraria).
Judge Cooley in his work on Torts (3d ed., 1324) defines negligence to be: "The failure to observe,
for the protection of the interests of another person, that degree of care, precaution and vigilance
which the circumstances justly demand, whereby such other persons suffers injury."
In the case of U. S. vs. Nava, (1 Phil. Rep., 580), we held that: "Reckless negligence consists of the
failure to take such precautions or advance measures in the performance of an act as the most
prudence would suggest whereby injury is caused to persons or to property."
Silvela says in his "Derecho Penal," in speaking of reckless imprudence (imprudencia temeraria):
The word "negligencia" used in the code, and the term "imprudencia" with which this
punishable act is defined, express this idea in such a clear manner that it is not necessary to
enlarge upon it. He who has done everything on his part to prevent his actions from causing
damage to another, although he has not succeeded in doing so, notwithstanding his efforts,
is the victim of an accident and can not be considered responsible for the same. (Vol. 2, p.
127 [153].)
Temerario is, in our opinion, one who omits, with regard to this actions, which are liable to
cause injury to another, that care and diligence, that attention, which can be required of the
least careful, attentive, or diligent. If a moment's attention and reflection would have shown a
person that the act which he was about to perform was liable to have the harmful
consequence which it had, such person acted with temerity and may be guilty of
"imprudencia temeraria." It may be that in practice this idea has been given a greater scope
and the acts of imprudence which did not show carelessness as carried to such high degree,
might have been punished as "imprudencia temeraria;" but in our opinion, the proper
meaning of the word does not authorize another interpretation. (Id., p. 133 [161].)
51
Groizard, commenting upon "imprudencia temeraria," on page 389, volume 8, of his work on the
Penal Code, says:
Prudence is that cardinal virtue which teaches us to discern and distinguish the good from
bad, in order to adopt or flee from it. It also means good judgment, temperance, and
moderation in one's actions. `Temerario is one who exposes himself to danger or rushes into
it without reflection and without examining the same. Consequently, he who from lack of
good judgment, temperance, or moderation in his actions, exposes himself without reflection
and examination to the danger of committing a crime, must be held responsible under the
provision of law aforementioned.
Negligence is want of the care required by the circumstances. It is a relative or comparative, not an
absolute, term and its application depends upon the situation of the parties and the degree of care
and vigilance which the circumstances reasonably require. Where the danger is great, a high degree
of care is necessary, and the failure to observe it is a want of ordinary care under the circumstances.
(Ahern vs. Oregon Telephone Co., 24 Oreg., 276, 294; 35 Pac., 549.)
Ordinary care, if the danger is great, may arise to the grade of a very exact and unchangeable
attention. (Parry Mfg. Co. vs. Eaton, 41 Ind. App., 81, 1908; 83 N. E., 510.)
In the case of U. S. vs. Reyes (1 Phil. Rep., 375-377), we held that: "The diligence with which the
law requires the individual at all the time to govern his conduct varies with the nature of the situation
in which he is placed and with the importance of the act which he is to perform. lawph!l .net
The question to be determined then, is whether, under all the circumstances, and having in mind the
situation of the defendant when he put his car in motion and ran it over the child, he was guilty of a
failure to take such precautions or advance measures as common prudence would suggest.
The evidence shows that the thoroughfare on which the incident occurred was a public street in a
densely populated section of the city. The hour was six in the morning, or about the time when the
residents of such streets begin to move about. Under such conditions a motorman of an electric
street car was clearly charged with a high degree of diligence in the performance of his duties. He
was bound to know and to recognize that any negligence on his part in observing the track over
which he was running his car might result in fatal accidents. He had no right to assume that the track
before his car was clear. It was his duty to satisfy himself of that fact by keeping a sharp lookout, and
to do everything in his power to avoid the danger which is necessarily incident to the operation of
heavy street cars on public thoroughfares in populous sections of the city.
Did he exercise the degree of diligence required of him? We think this question must be answered in
the negative. We do not go so far as to say that having brought his car to a standstill it was his
bounden duty to keep his eyes directed to the front. Indeed, in the absence of some regulation of his
employers, we can well understand that, at times, it might be highly proper and prudent for him to
glance back before again setting his car in motion, to satisfy himself that he understood correctly a
signal to go forward or that all the passengers had safely alighted or gotten on board. But we do
insist that before setting his car again in motion, it was his duty to satisfy himself that the track was
clear, and, for that purpose, to look and to see the track just in front of his car. This the defendant did
not do, and the result of his negligence was the death of the child.
In the case of Smith vs. St. Paul City Ry. Co., (32 Minn., p. 1), the supreme court of Minnesota, in
discussing the diligence required of street railway companies in the conduct of their business
observed that: "The defendant was a carrier of passengers for hire, owing and controlling the tracks
and cars operated thereon. It is therefore subject to the rules applicable to passenger carriers.
52
(Thompson's Carriers, 442; Barrett vs. Third Ave. R. Co., 1 Sweeny, 568; 8 Abb. Pr. (N.S.), 205.) As
respects hazards and dangers incident to the business or employment, the law enjoins upon such
carrier the highest degree of care consistent with its undertaking, and it is responsible for the
slightest negligence. (Wilson vs. Northern Pacific R. Co., 26 Minn., 278; Warren vs. Fitchburg R.
Co., 8 Allen, 233; 43 Am. Dec. 354, 356, notes and cases.) . . . The severe ruled which enjoins upon
the carrier such extraordinary care and diligence, is intended, for reasons of public policy, to secure
the safe carriage of passengers, in so far as human skill and foresight can affect such result." The
case just cited was a civil case, and the doctrine therein announced had special reference to the
care which should be exercised in securing the safety of passengers. But we hold that the reasons
of public policy which impose upon street car companies and their employees the duty of exercising
the utmost degree of diligence in securing the safety of passengers, apply with equal force to the
duty of avoiding the infliction of injuries upon pedestrians and others on the public streets and
thoroughfares over which these companies are authorized to run their cars. And while, in a criminal
case, the courts will require proof of the guilt of the company or its employees beyond a reasonable
doubt, nevertheless the care or diligence required of the company and its employees is the same in
both cases, and the only question to be determined is whether the proofs shows beyond a
reasonable doubt that the failure to exercise such care or diligence was the cause of the accident,
and that the defendant was guilty thereof.
Counsel for the defendant insist that the accident might have happened despite the exercise of the
utmost care by the defendant, and they have introduced photographs into the record for the purpose
of proving that while the motorman was standing in his proper place on the front platform of the car,
a child might have walked up immediately in front of he car without coming within the line of his
vision. Examining the photographs, we think that this contention may have some foundation in fact;
but only to this extent, that standing erect, at the position he would ordinarily assume while the car is
in motion, the eye of the average motorman might just miss seeing the top of the head of a child,
about three years old, standing or walking close up to the front of the car. But it is also very evident
that by inclining the head and shoulders forward very slightly, and glancing in front of the car, a
person in the position of a motorman could not fail to see a child on the track immediately in front of
his car; and we hold that it is the manifest duty of a motorman, who is about to start his car on a
public thoroughfare in a thickly-settled district, to satisfy himself that the track is clear immediately in
front of his car, and to incline his body slightly forward, if that be necessary, in order to bring the
whole track within his line of vision. Of course, this may not be, and usually is not necessary when
the car is in motion, but we think that it is required by the dictates of the most ordinary prudence in
starting from a standstill.
We are not unmindful of our remarks in the case of U. S. vs. Bacho (10 Phil. Rep., 577), to which our
attention is directed by counsel for appellant. In that case we said that:
. . . In the general experience of mankind, accidents apparently avoidable and often

inexplicable are unfortunately too frequent to permit us to conclude that some one must be
criminally liable for negligence in every case where an accident occurs. It is the duty of the
prosecution in each case to prove by competent evidence not only the existence of criminal
negligence, but that the accused was guilty thereof.
Nor do we overlook the ruling in the case of U. S. vs. Barnes (12 Phil. Rep., 93), to which our
attention is also invited, wherein we held that the defendant was not guilty of reckless negligence,
where it appeared that he killed another by the discharge of his gun under such circumstances that
he might have been held guilty of criminally reckless negligence had he had knowledge at that
moment that another person was in such position as to be in danger if the gun should be discharged.
In this latter case the defendant had no reason to anticipate that the person who was injured was in
the line of fire, or that there was any probability that he or anyone else would place himself in the line
of fire. In the case at bar, however, it was, as we have seen, the manifest duty of the motorman to
53
take reasonable precautions in starting his car to see that in doing so he was not endangering the
life of any pedestrian, old or young; and to this end it was further his duty to guard against the
reasonable possibility that some one might be on the track immediately in front of the car. We think
that the evidence showing, as it does, that the child was killed at the moment when the car was set
in motion, we are justified in holding that, had the motorman seen the child, he could have avoided
the accident; the accident was not, therefore, "unavailable or inexplicable," and it appearing that the
motorman, by the exercise of ordinary diligence, might have seen the child before he set the car in
motion, his failure to satisfy himself that the track was clear before doing so was reckless
negligence, of which he was properly convicted in the court below.
We think, however, that the penalty should be reduced to that of six months and one day of prision
correccional. Modified by substituting for so much thereof as imposes the penalty of one year and
one month of imprisonment, the penalty of six months and one day of prision correccional, the
judgment of the lower court convicting and sentencing the appellant is affirmed, with costs of both
instances against him. So ordered.

SUPREME COURT
Manila
EN BANC

SUPREME COURT
Manila
EN BANC
G.R. No. L-45685 November 16, 1937
THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG & SHANGHAI BANKING
CORPORATION, petitioners,
vs.
JOSE O. VERA, Judge . of the Court of First Instance of Manila, and MARIANO CU
UNJIENG, respondents.
Office of the Solicitor General Tuason and City Fiscal Diaz for the Government.
De Witt, Perkins and Ponce Enrile for the Hongkong and Shanghai Banking Corporation.
Vicente J. Francisco, Feria and La O, Orense and Belmonte, and Gibbs and McDonough for
respondent Cu Unjieng.
No appearance for respondent Judge.
LAUREL, J.:
This is an original action instituted in this court on August 19, 1937, for the issuance of the writ
of certiorari and of prohibition to the Court of First Instance of Manila so that this court may review
the actuations of the aforesaid Court of First Instance in criminal case No. 42649 entitled "The
People of the Philippine Islands vs. Mariano Cu Unjieng, et al.", more particularly the application of
54
the defendant Mariano Cu Unjieng therein for probation under the provisions of Act No. 4221, and
thereafter prohibit the said Court of First Instance from taking any further action or entertaining
further the aforementioned application for probation, to the end that the defendant Mariano Cu
Unjieng may be forthwith committed to prison in accordance with the final judgment of conviction
rendered by this court in said case (G. R. No. 41200). 1
Petitioners herein, the People of the Philippine and the Hongkong and Shanghai Banking
Corporation, are respectively the plaintiff and the offended party, and the respondent herein Mariano
Cu Unjieng is one of the defendants, in the criminal case entitled "The People of the Philippine
Islands vs. Mariano Cu Unjieng, et al.", criminal case No. 42649 of the Court of First Instance of
Manila and G.R. No. 41200 of this court. Respondent herein, Hon. Jose O. Vera, is the Judge ad
interim of the seventh branch of the Court of First Instance of Manila, who heard the application of
the defendant Mariano Cu Unjieng for probation in the aforesaid criminal case.
The information in the aforesaid criminal case was filed with the Court of First Instance of Manila on
October 15, 1931, petitioner herein Hongkong and Shanghai Banking Corporation intervening in the
case as private prosecutor. After a protracted trial unparalleled in the annals of Philippine
jurisprudence both in the length of time spent by the court as well as in the volume in the testimony
and the bulk of the exhibits presented, the Court of First Instance of Manila, on January 8, 1934,
rendered a judgment of conviction sentencing the defendant Mariano Cu Unjieng to indeterminate
penalty ranging from four years and two months of prision correccional to eight years of prision
mayor, to pay the costs and with reservation of civil action to the offended party, the Hongkong and
Shanghai Banking Corporation. Upon appeal, the court, on March 26, 1935, modified the sentence
to an indeterminate penalty of from five years and six months of prision correccional to seven years,
six months and twenty-seven days of prision mayor, but affirmed the judgment in all other respects.
Mariano Cu Unjieng filed a motion for reconsideration and four successive motions for new trial
which were denied on December 17, 1935, and final judgment was accordingly entered on
December 18, 1935. The defendant thereupon sought to have the case elevated on certiorari to the
Supreme Court of the United States but the latter denied the petition
for certiorari in November, 1936. This court, on November 24, 1936, denied the
petition subsequently filed by the defendant for leave to file a second alternative motion for
reconsideration or new trial and thereafter remanded the case to the court of origin for execution of
the judgment.
The instant proceedings have to do with the application for probation filed by the herein respondent
Mariano Cu Unjieng on November 27, 1936, before the trial court, under the provisions of Act
No. 4221 of the defunct Philippine Legislature. Herein respondent Mariano Cu Unjieng states in his
petition, inter alia, that he is innocent of the crime of which he was convicted, that he has no criminal
record and that he would observe good conduct in the future. The Court of First Instance of Manila,
Judge Pedro Tuason presiding, referred the application for probation of the Insular Probation Office
which recommended denial of the same June 18, 1937. Thereafter, the Court of First Instance of
Manila, seventh branch, Judge Jose O. Vera presiding, set the petition for hearing on April 5, 1937.
On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the
herein respondent Mariano Cu Unjieng. The private prosecution also filed an opposition on April 5,
1937, alleging, among other things, that Act No. 4221, assuming that it has not been repealed by
section 2 of Article XV of the Constitution, is nevertheless violative of section 1, subsection (1),
Article III of the Constitution guaranteeing equal protection of the laws for the reason that its
applicability is not uniform throughout the Islands and because section 11 of the said Act endows the
provincial boards with the power to make said law effective or otherwise in their respective or
otherwise in their respective provinces. The private prosecution also filed a supplementary
opposition on April 19, 1937, elaborating on the alleged unconstitutionality on Act No. 4221, as an
undue delegation of legislative power to the provincial boards of several provinces (sec. 1, Art. VI,
55
Constitution). The City Fiscal concurred in the opposition of the private prosecution except with
respect to the questions raised concerning the constitutionality of Act No. 4221.
On June 28, 1937, herein respondent Judge Jose O. Vera promulgated a resolution with a finding
that "las pruebas no han establecido de unamanera concluyente la culpabilidad del peticionario y
que todos los hechos probados no son inconsistentes o incongrentes con su inocencia" and
concludes that the herein respondent Mariano Cu Unjieng "es inocente por duda racional" of the
crime of which he stands convicted by this court in G.R. No. 41200, but denying the latter's petition
for probation for the reason that:
. . . Si este Juzgado concediera la poblacion solicitada por las circunstancias y la historia

social que se han expuesto en el cuerpo de esta resolucion, que hacen al peticionario
acreedor de la misma, una parte de la opinion publica, atizada por los recelos y las
suspicacias, podria levantarse indignada contra un sistema de probacion que permite atisbar
en los procedimientos ordinarios de una causa criminal perturbando la quietud y la eficacia
de las decisiones ya recaidas al traer a la superficie conclusiones enteramente differentes,
en menoscabo del interes publico que demanda el respeto de las leyes y del veredicto
judicial.
On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng filed an exception to the
resolution denying probation and a notice of intention to file a motion for reconsideration. An
alternative motion for reconsideration or new trial was filed by counsel on July 13, 1937. This was
supplemented by an additional motion for reconsideration submitted on July 14, 1937. The aforesaid
motions were set for hearing on July 31, 1937, but said hearing was postponed at the petition of
counsel for the respondent Mariano Cu Unjieng because a motion for leave to intervene in the case
as amici curiae signed by thirty-three (thirty-four) attorneys had just been filed with the trial court.
Attorney Eulalio Chaves whose signature appears in the aforesaid motion subsequently filed a
petition for leave to withdraw his appearance as amicus curiae on the ground that the motion for
leave to intervene as amici curiae was circulated at a banquet given by counsel for Mariano Cu
Unjieng on the evening of July 30, 1937, and that he signed the same "without mature deliberation
and purely as a matter of courtesy to the person who invited me (him)."
On August 6, 1937, the Fiscal of the City of Manila filed a motion with the trial court for the issuance
of an order of execution of the judgment of this court in said case and forthwith to commit the herein
respondent Mariano Cu Unjieng to jail in obedience to said judgment.
On August 7, 1937, the private prosecution filed its opposition to the motion for leave to intervene
as amici curiae aforementioned, asking that a date be set for a hearing of the same and that, at all
events, said motion should be denied with respect to certain attorneys signing the same who were
members of the legal staff of the several counsel for Mariano Cu Unjieng. On August 10, 1937,
herein respondent Judge Jose O. Vera issued an order requiring all parties including the movants for
intervention as amici curiae to appear before the court on August 14, 1937. On the last-mentioned
date, the Fiscal of the City of Manila moved for the hearing of his motion for execution of judgment in
preference to the motion for leave to intervene as amici curiae but, upon objection of counsel for
Mariano Cu Unjieng, he moved for the postponement of the hearing of both motions. The
respondent judge thereupon set the hearing of the motion for execution on August 21, 1937, but
proceeded to consider the motion for leave to intervene as amici curiae as in order. Evidence as to
the circumstances under which said motion for leave to intervene as amici curiae was signed and
submitted to court was to have been heard on August 19, 1937. But at this juncture, herein
petitioners came to this court on extraordinary legal process to put an end to what they alleged was
an interminable proceeding in the Court of First Instance of Manila which fostered "the campaign of
the defendant Mariano Cu Unjieng for delay in the execution of the sentence imposed by this
56
Honorable Court on him, exposing the courts to criticism and ridicule because of the apparent
inability of the judicial machinery to make effective a final judgment of this court imposed on the
defendant Mariano Cu Unjieng."
The scheduled hearing before the trial court was accordingly suspended upon the issuance of a
temporary restraining order by this court on August 21, 1937.
To support their petition for the issuance of the extraordinary writs of certiorari and prohibition, herein
petitioners allege that the respondent judge has acted without jurisdiction or in excess of his
jurisdiction:
I. Because said respondent judge lacks the power to place respondent Mariano Cu Unjieng under
probation for the following reason:
(1) Under section 11 of Act No. 4221, the said of the Philippine Legislature is made
to apply only to the provinces of the Philippines; it nowhere states that it is to be
made applicable to chartered cities like the City of Manila.
(2) While section 37 of the Administrative Code contains a proviso to the effect that in
the absence of a special provision, the term "province" may be construed to include
the City of Manila for the purpose of giving effect to laws of general application, it is
also true that Act No. 4221 is not a law of general application because it is made to
apply only to those provinces in which the respective provincial boards shall have
provided for the salary of a probation officer.
(3) Even if the City of Manila were considered to be a province, still, Act No. 4221
would not be applicable to it because it has provided for the salary of a probation
officer as required by section 11 thereof; it being immaterial that there is an Insular
Probation Officer willing to act for the City of Manila, said Probation Officer provided
for in section 10 of Act No. 4221 being different and distinct from the Probation
Officer provided for in section 11 of the same Act.
II. Because even if the respondent judge originally had jurisdiction to entertain the application for
probation of the respondent Mariano Cu Unjieng, he nevertheless acted without jurisdiction or in
excess thereof in continuing to entertain the motion for reconsideration and by failing to commit
Mariano Cu Unjieng to prison after he had promulgated his resolution of June 28, 1937, denying
Mariano Cu Unjieng's application for probation, for the reason that:
(1) His jurisdiction and power in probation proceedings is limited by Act No. 4221 to
the granting or denying of applications for probation.
(2) After he had issued the order denying Mariano Cu Unjieng's petition for probation
on June 28, 1937, it became final and executory at the moment of its rendition.
(3) No right on appeal exists in such cases.
(4) The respondent judge lacks the power to grant a rehearing of said order or to
modify or change the same.
III. Because the respondent judge made a finding that Mariano Cu Unjieng is innocent of the crime
for which he was convicted by final judgment of this court, which finding is not only presumptuous
57
but without foundation in fact and in law, and is furthermore in contempt of this court and a violation
of the respondent's oath of office as ad interim judge of first instance.
IV. Because the respondent judge has violated and continues to violate his duty, which became
imperative when he issued his order of June 28, 1937, denying the application for probation, to
commit his co-respondent to jail.
Petitioners also avers that they have no other plain, speedy and adequate remedy in the ordinary
course of law.
In a supplementary petition filed on September 9, 1937, the petitioner Hongkong and Shanghai
Banking Corporation further contends that Act No. 4221 of the Philippine Legislature providing for a
system of probation for persons eighteen years of age or over who are convicted of crime, is
unconstitutional because it is violative of section 1, subsection (1), Article III, of the Constitution of
the Philippines guaranteeing equal protection of the laws because it confers upon the provincial
board of its province the absolute discretion to make said law operative or otherwise in their
respective provinces, because it constitutes an unlawful and improper delegation to the provincial
boards of the several provinces of the legislative power lodged by the Jones Law (section 8) in the
Philippine Legislature and by the Constitution (section 1, Art. VI) in the National Assembly; and for
the further reason that it gives the provincial boards, in contravention of the Constitution (section 2,
Art. VIII) and the Jones Law (section 28), the authority to enlarge the powers of the Court of First
Instance of different provinces without uniformity. In another supplementary petition dated
September 14, 1937, the Fiscal of the City of Manila, in behalf of one of the petitioners, the People of
the Philippine Islands, concurs for the first time with the issues raised by other petitioner regarding
the constitutionality of Act No. 4221, and on the oral argument held on October 6, 1937, further
elaborated on the theory that probation is a form of reprieve and therefore Act. No. 4221 is an
encroachment on the exclusive power of the Chief Executive to grant pardons and reprieves. On
October 7, 1937, the City Fiscal filed two memorandums in which he contended that Act No. 4221
not only encroaches upon the pardoning power to the executive, but also constitute an unwarranted
delegation of legislative power and a denial of the equal protection of the laws. On October 9, 1937,
two memorandums, signed jointly by the City Fiscal and the Solicitor-General, acting in behalf of the
People of the Philippine Islands, and by counsel for the petitioner, the Hongkong and Shanghai
Banking Corporation, one sustaining the power of the state to impugn the validity of its own laws and
the other contending that Act No. 4221 constitutes an unwarranted delegation of legislative power,
were presented. Another joint memorandum was filed by the same persons on the same day,
October 9, 1937, alleging that Act No. 4221 is unconstitutional because it denies the equal protection
of the laws and constitutes an unlawful delegation of legislative power and, further, that the whole
Act is void: that the Commonwealth is not estopped from questioning the validity of its laws; that the
private prosecution may intervene in probation proceedings and may attack the probation law as
unconstitutional; and that this court may pass upon the constitutional question in prohibition
proceedings.
Respondents in their answer dated August 31, 1937, as well as in their oral argument and
memorandums, challenge each and every one of the foregoing proposition raised by the petitioners.
As special defenses, respondents allege:
(1) That the present petition does not state facts sufficient in law to warrant the
issuance of the writ of certiorari or of prohibition.
(2) That the aforesaid petition is premature because the remedy sought by the
petitioners is the very same remedy prayed for by them before the trial court and was
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still pending resolution before the trial court when the present petition was filed with
this court.
(3) That the petitioners having themselves raised the question as to the execution of
judgment before the trial court, said trial court has acquired exclusive jurisdiction to
resolve the same under the theory that its resolution denying probation is
unappealable.
(4) That upon the hypothesis that this court has concurrent jurisdiction with the Court
of First Instance to decide the question as to whether or not the execution will lie, this
court nevertheless cannot exercise said jurisdiction while the Court of First Instance
has assumed jurisdiction over the same upon motion of herein petitioners
themselves.
(5) That upon the procedure followed by the herein petitioners in seeking to deprive
the trial court of its jurisdiction over the case and elevate the proceedings to this
court, should not be tolerated because it impairs the authority and dignity of the trial
court which court while sitting in the probation cases is "a court of limited jurisdiction
but of great dignity."
(6) That under the supposition that this court has jurisdiction to resolve the question
submitted to and pending resolution by the trial court, the present action would not lie
because the resolution of the trial court denying probation is appealable; for although
the Probation Law does not specifically provide that an applicant for probation may
appeal from a resolution of the Court of First Instance denying probation, still it is a
general rule in this jurisdiction that a final order, resolution or decision of an inferior
court is appealable to the superior court.
(7) That the resolution of the trial court denying probation of herein respondent
Mariano Cu Unjieng being appealable, the same had not become final and executory
for the reason that the said respondent had filed an alternative motion for
reconsideration and new trial within the requisite period of fifteen days, which motion
the trial court was able to resolve in view of the restraining order improvidently and
erroneously issued by this court. lawphi1.net
(8) That the Fiscal of the City of Manila had by implication admitted that the
resolution of the trial court denying probation is not final and unappealable when he
presented his answer to the motion for reconsideration and agreed to the
postponement of the hearing of the said motion.
(9) That under the supposition that the order of the trial court denying probation is not
appealable, it is incumbent upon the accused to file an action for the issuance of the
writ of certiorari with mandamus, it appearing that the trial court, although it believed
that the accused was entitled to probation, nevertheless denied probation for fear of
criticism because the accused is a rich man; and that, before a petition
for certiorari grounded on an irregular exercise of jurisdiction by the trial court could
lie, it is incumbent upon the petitioner to file a motion for reconsideration specifying
the error committed so that the trial court could have an opportunity to correct or cure
the same.
(10) That on hypothesis that the resolution of this court is not appealable, the trial
court retains its jurisdiction within a reasonable time to correct or modify it in
59
accordance with law and justice; that this power to alter or modify an order or
resolution is inherent in the courts and may be exercise either motu proprio or upon
petition of the proper party, the petition in the latter case taking the form of a motion
for reconsideration.
(11) That on the hypothesis that the resolution of the trial court is appealable as
respondent allege, said court cannot order execution of the same while it is on
appeal, for then the appeal would not be availing because the doors of probation will
be closed from the moment the accused commences to serve his sentence (Act No.
4221, sec. 1; U.S. vs. Cook, 19 Fed. [2d], 827).
In their memorandums filed on October 23, 1937, counsel for the respondents maintain that Act No.
4221 is constitutional because, contrary to the allegations of the petitioners, it does not constitute an
undue delegation of legislative power, does not infringe the equal protection clause of the
Constitution, and does not encroach upon the pardoning power of the Executive. In an additional
memorandum filed on the same date, counsel for the respondents reiterate the view that section 11
of Act No. 4221 is free from constitutional objections and contend, in addition, that the private
prosecution may not intervene in probation proceedings, much less question the validity of Act No.
4221; that both the City Fiscal and the Solicitor-General are estopped from questioning the validity of
the Act; that the validity of Act cannot be attacked for the first time before this court; that probation in
unavailable; and that, in any event, section 11 of the Act No. 4221 is separable from the rest of the
Act. The last memorandum for the respondent Mariano Cu Unjieng was denied for having been filed
out of time but was admitted by resolution of this court and filed anew on November 5, 1937.
This memorandum elaborates on some of the points raised by the respondents and refutes those
brought up by the petitioners.
In the scrutiny of the pleadings and examination of the various aspects of the present case, we
noted that the court below, in passing upon the merits of the application of the respondent Mariano
Cu Unjieng and in denying said application assumed the task not only of considering the merits of
the application, but of passing upon the culpability of the applicant, notwithstanding the final
pronouncement of guilt by this court. (G.R. No. 41200.) Probation implies guilt be final judgment.
While a probation case may look into the circumstances attending the commission of the offense,
this does not authorize it to reverse the findings and conclusive of this court, either directly or
indirectly, especially wherefrom its own admission reliance was merely had on the printed briefs,
averments, and pleadings of the parties. As already observed by this court in Shioji vs.
Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent cases, "if each and every Court of
First Instance could enjoy the privilege of overruling decisions of the Supreme Court, there would be
no end to litigation, and judicial chaos would result." A becoming modesty of inferior courts demands
conscious realization of the position that they occupy in the interrelation and operation of the
intergrated judicial system of the nation.
After threshing carefully the multifarious issues raised by both counsel for the petitioners and the
respondents, this court prefers to cut the Gordian knot and take up at once the two fundamental
questions presented, namely, (1) whether or not the constitutionality of Act No. 4221 has been
properly raised in these proceedings; and (2) in the affirmative, whether or not said Act is
constitutional. Considerations of these issues will involve a discussion of certain incidental questions
raised by the parties.
To arrive at a correct conclusion on the first question, resort to certain guiding principles is
necessary. It is a well-settled rule that the constitutionality of an act of the legislature will not be
determined by the courts unless that question is properly raised and presented inappropriate cases
and is necessary to a determination of the case; i.e., the issue of constitutionality must be the very lis
60
mota presented. (McGirr vs. Hamilton and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12
C. J., pp. 780-782, 783.)
The question of the constitutionality of an act of the legislature is frequently raised in ordinary
actions. Nevertheless, resort may be made to extraordinary legal remedies, particularly where the
remedies in the ordinary course of law even if available, are not plain, speedy and adequate. Thus,
in Cu Unjieng vs. Patstone ([1922]), 42 Phil., 818), this court held that the question of the
constitutionality of a statute may be raised by the petitioner in mandamus proceedings (see, also, 12
C. J., p. 783); and in Government of the Philippine Islands vs. Springer ([1927], 50 Phil., 259
[affirmed in Springer vs. Government of the Philippine Islands (1928), 277 U. S., 189; 72 Law. ed.,
845]), this court declared an act of the legislature unconstitutional in an action of quo
warranto brought in the name of the Government of the Philippines. It has also been held that the
constitutionality of a statute may be questioned in habeas corpus proceedings (12 C. J., p. 783;
Bailey on Habeas Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on an
application for injunction to restrain action under the challenged statute (mandatory, see Cruz vs.
Youngberg [1931], 56 Phil., 234); and even on an application for preliminary injunction where the
determination of the constitutional question is necessary to a decision of the case. (12 C. J., p. 783.)
The same may be said as regards prohibition and certiorari.(Yu Cong Eng vs. Trinidad [1925], 47
Phil., 385; [1926], 271 U. S., 500; 70 Law. ed., 1059; Bell vs. First Judicial District Court [1905], 28
Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6 Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited).
The case of Yu Cong Eng vs. Trinidad, supra, decided by this court twelve years ago was, like the
present one, an original action for certiorari and prohibition. The constitutionality of Act No. 2972,
popularly known as the Chinese Bookkeeping Law, was there challenged by the petitioners, and the
constitutional issue was not met squarely by the respondent in a demurrer. A point was raised
"relating to the propriety of the constitutional question being decided in original proceedings in
prohibition." This court decided to take up the constitutional question and, with two justices
dissenting, held that Act No. 2972 was constitutional. The case was elevated on writ of certiorari to
the Supreme Court of the United States which reversed the judgment of this court and held that the
Act was invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the question of jurisdiction, however, the
Federal Supreme Court, though its Chief Justice, said:
By the Code of Civil Procedure of the Philippine Islands, section 516, the Philippine supreme
court is granted concurrent jurisdiction in prohibition with courts of first instance over inferior
tribunals or persons, and original jurisdiction over courts of first instance, when such courts
are exercising functions without or in excess of their jurisdiction. It has been held by that
court that the question of the validity of the criminal statute must usually be raised by a
defendant in the trial court and be carried regularly in review to the Supreme Court.
(Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192). But in this case where a
new act seriously affected numerous persons and extensive property rights, and was likely to
cause a multiplicity of actions, the Supreme Court exercised its discretion to bring the issue
to the act's validity promptly before it and decide in the interest of the orderly administration
of justice. The court relied by analogy upon the cases of Ex parte Young (209 U. S., 123;52
Law ed., 714; 13 L. R. A. [N. S.] 932; 28 Sup. Ct. Rep., 441; 14 Ann. Ca., 764; Traux vs.
Raich, 239 U. S., 33; 60 Law. ed., 131; L. R. A. 1916D, 545; 36 Sup. Ct. Rep., 7; Ann. Cas.,
1917B, 283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed., 755; L. R. A. 1917E, 938; 37
Sup. Ct. Rep., 298; Ann. Cas. 1918A, 1024). Although objection to the jurisdiction was raise
by demurrer to the petition, this is now disclaimed on behalf of the respondents, and both
parties ask a decision on the merits. In view of the broad powers in prohibition granted to that
court under the Island Code, we acquiesce in the desire of the parties.
The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction
and directed to an inferior court, for the purpose of preventing the inferior tribunal from usurping a
jurisdiction with which it is not legally vested. (High, Extraordinary Legal Remedies, p. 705.) The
61
general rule, although there is a conflict in the cases, is that the merit of prohibition will not lie
whether the inferior court has jurisdiction independent of the statute the constitutionality of which is
questioned, because in such cases the interior court having jurisdiction may itself determine the
constitutionality of the statute, and its decision may be subject to review, and consequently the
complainant in such cases ordinarily has adequate remedy by appeal without resort to the writ of
prohibition. But where the inferior court or tribunal derives its jurisdiction exclusively from an
unconstitutional statute, it may be prevented by the writ of prohibition from enforcing that statute. (50
C. J., 670; Ex parte Round tree [1874, 51 Ala., 42; In re Macfarland, 30 App. [D. C.], 365; Curtis vs.
Cornish [1912], 109 Me., 384; 84 A., 799; Pennington vs. Woolfolk [1880], 79 Ky., 13; State vs.
Godfrey [1903], 54 W. Va., 54; 46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30 Am. Dec.,
669.)
Courts of First Instance sitting in probation proceedings derived their jurisdiction solely from Act No.
4221 which prescribes in detailed manner the procedure for granting probation to accused persons
after their conviction has become final and before they have served their sentence. It is true that at
common law the authority of the courts to suspend temporarily the execution of the sentence is
recognized and, according to a number of state courts, including those of Massachusetts, Michigan,
New York, and Ohio, the power is inherent in the courts (Commonwealth vs. Dowdican's Bail [1874],
115 Mass., 133; People vs. Stickel [1909], 156 Mich., 557; 121 N. W., 497; People ex rel. Forsyth vs.
Court of Session [1894], 141 N. Y., 288; Weber vs. State [1898], 58 Ohio St., 616). But, in the
leading case of Ex parte United States ([1916], 242 U. S., 27; 61 Law. ed., 129; L. R. A., 1917E,
1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355), the Supreme Court of the United States
expressed the opinion that under the common law the power of the court was limited to temporary
suspension, and brushed aside the contention as to inherent judicial power saying, through Chief
Justice White:
Indisputably under our constitutional system the right to try offenses against the criminal laws
and upon conviction to impose the punishment provided by law is judicial, and it is equally to
be conceded that, in exerting the powers vested in them on such subject, courts inherently
possess ample right to exercise reasonable, that is, judicial, discretion to enable them to
wisely exert their authority. But these concessions afford no ground for the contention as to
power here made, since it must rest upon the proposition that the power to enforce begets
inherently a discretion to permanently refuse to do so. And the effect of the proposition urged
upon the distribution of powers made by the Constitution will become apparent when it is
observed that indisputable also is it that the authority to define and fix the punishment for
crime is legislative and includes the right in advance to bring within judicial discretion, for the
purpose of executing the statute, elements of consideration which would be otherwise
beyond the scope of judicial authority, and that the right to relieve from the punishment, fixed
by law and ascertained according to the methods by it provided belongs to the executive
department.
Justice Carson, in his illuminating concurring opinion in the case of Director of Prisons vs. Judge of
First Instance of Cavite (29 Phil., 265), decided by this court in 1915, also reached the conclusion
that the power to suspend the execution of sentences pronounced in criminal cases is not inherent in
the judicial function. "All are agreed", he said, "that in the absence of statutory authority, it does not
lie within the power of the courts to grant such suspensions." (at p. 278.) Both petitioner and
respondents are correct, therefore, when they argue that a Court of First Instance sitting in probation
proceedings is a court of limited jurisdiction. Its jurisdiction in such proceedings is conferred
exclusively by Act No. 4221 of the Philippine Legislature.
It is, of course, true that the constitutionality of a statute will not be considered on application for
prohibition where the question has not been properly brought to the attention of the court by
objection of some kind (Hill vs. Tarver [1901], 130 Ala., 592; 30 S., 499; State ex rel. Kelly vs. Kirby
62
[1914], 260 Mo., 120; 168 S. W., 746). In the case at bar, it is unquestionable that the constitutional
issue has been squarely presented not only before this court by the petitioners but also before the
trial court by the private prosecution. The respondent, Hon. Jose O Vera, however, acting as judge
of the court below, declined to pass upon the question on the ground that the private prosecutor, not
being a party whose rights are affected by the statute, may not raise said question. The respondent
judge cited Cooley on Constitutional Limitations (Vol. I, p. 339; 12 C. J., sec. 177, pp. 760 and 762),
and McGlue vs. Essex County ([1916], 225 Mass., 59; 113 N. E., 742, 743), as authority for the
proposition that a court will not consider any attack made on the constitutionality of a statute by one
who has no interest in defeating it because his rights are not affected by its operation. The
respondent judge further stated that it may not motu proprio take up the constitutional question and,
agreeing with Cooley that "the power to declare a legislative enactment void is one which the judge,
conscious of the fallibility of the human judgment, will shrink from exercising in any case where he
can conscientiously and with due regard to duty and official oath decline the responsibility"
(Constitutional Limitations, 8th ed., Vol. I, p. 332), proceeded on the assumption that Act No. 4221 is
constitutional. While therefore, the court a quo admits that the constitutional question was raised
before it, it refused to consider the question solely because it was not raised by a proper party.
Respondents herein reiterates this view. The argument is advanced that the private prosecution has
no personality to appear in the hearing of the application for probation of defendant Mariano Cu
Unjieng in criminal case No. 42648 of the Court of First Instance of Manila, and hence the issue of
constitutionality was not properly raised in the lower court. Although, as a general rule, only those
who are parties to a suit may question the constitutionality of a statute involved in a judicial decision,
it has been held that since the decree pronounced by a court without jurisdiction is void, where the
jurisdiction of the court depends on the validity of the statute in question, the issue of the
constitutionality will be considered on its being brought to the attention of the court by persons
interested in the effect to be given the statute.(12 C. J., sec. 184, p. 766.) And, even if we were to
concede that the issue was not properly raised in the court below by the proper party, it does not
follow that the issue may not be here raised in an original action of certiorari and prohibitions. It is
true that, as a general rule, the question of constitutionality must be raised at the earliest opportunity,
so that if not raised by the pleadings, ordinarily it may not be raised at the trial, and if not raised in
the trial court, it will not considered on appeal. (12 C. J., p. 786. See, also, Cadwallader-Gibson
Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits
of exceptions. Courts, in the exercise of sounds discretion, may determine the time when a question
affecting the constitutionality of a statute should be presented. (In re Woolsey [1884], 95 N. Y., 135,
144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said that the
question may be raised for the first time at any stage of the proceedings, either in the trial court or on
appeal. (12 C. J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on
the constitutional question, though raised for the first time on appeal, if it appears that a
determination of the question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville
& B. S. R. Co., [1910], 136 ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage Co. [1908],
214 Mo., 685; 113 S. W. 1108; Carmody vs. St. Louis Transit Co., [1905], 188 Mo., 572; 87 S. W.,
913.) And it has been held that a constitutional question will be considered by an appellate court at
any time, where it involves the jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561;
57 S., 870.) As to the power of this court to consider the constitutional question raised for the first
time before this court in these proceedings, we turn again and point with emphasis to the case of Yu
Cong Eng vs. Trinidad, supra. And on the hypotheses that the Hongkong & Shanghai Banking
Corporation, represented by the private prosecution, is not the proper party to raise the constitutional
question here — a point we do not now have to decide — we are of the opinion that the People of
the Philippines, represented by the Solicitor-General and the Fiscal of the City of Manila, is such a
proper party in the present proceedings. The unchallenged rule is that the person who impugns the
validity of a statute must have a personal and substantial interest in the case such that he has
sustained, or will sustained, direct injury as a result of its enforcement. It goes without saying that if
Act No. 4221 really violates the constitution, the People of the Philippines, in whose name the
present action is brought, has a substantial interest in having it set aside. Of grater import than the
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damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute. Hence, the well-settled rule that the state
can challenge the validity of its own laws. In Government of the Philippine Islands vs. Springer
([1927]), 50 Phil., 259 (affirmed in Springer vs. Government of the Philippine Islands [1928], 277
U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action
instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkins ([1889], 73
Mich., 303, 311, 312; 41 N. W. 426, 428, 429), the State of Michigan, through its Attorney General,
instituted quo warranto proceedings to test the right of the respondents to renew a mining
corporation, alleging that the statute under which the respondents base their right was
unconstitutional because it impaired the obligation of contracts. The capacity of the chief law officer
of the state to question the constitutionality of the statute was though, as a general rule, only those
who are parties to a suit may question the constitutionality of a statute involved in a judicial decision,
it has been held that since the decree pronounced by a court without jurisdiction in void, where the
jurisdiction of the court depends on the validity of the statute in question, the issue of constitutionality
will be considered on its being brought to the attention of the court by persons interested in the effect
to begin the statute. (12 C.J., sec. 184, p. 766.) And, even if we were to concede that the issue was
not properly raised in the court below by the proper party, it does not follow that the issue may not be
here raised in an original action of certiorari and prohibition. It is true that, as a general rule, the
question of constitutionality must be raised at the earliest opportunity, so that if not raised by the
pleadings, ordinarily it may not be raised a the trial, and if not raised in the trial court, it will not be
considered on appeal. (12 C.J., p. 786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario,
26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions. Courts, in the
exercise of sound discretion, may determine the time when a question affecting the constitutionality
of a statute should be presented. (In re Woolsey [19884], 95 N.Y., 135, 144.) Thus, in criminal
cases, although there is a very sharp conflict of authorities, it is said that the question may be raised
for the first time at any state of the proceedings, either in the trial court or on appeal. (12 C.J., p.
786.) Even in civil cases, it has been held that it is the duty of a court to pass on the constitutional
question, though raised for first time on appeal, if it appears that a determination of the question is
necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co. [1910], 136 Ky.,
674; 124 S. W., 892; Lohmeyer vs. St. Louis, Cordage Co. [1908], 214 Mo. 685; 113 S. W., 1108;
Carmody vs. St. Louis Transit Co. [1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a
constitutional question will be considered by an appellate court at any time, where it involves the
jurisdiction of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of
this court to consider the constitutional question raised for the first time before this court in these
proceedings, we turn again and point with emphasis to the case of Yu Cong Eng. vs. Trinidad,
supra. And on the hypothesis that the Hongkong & Shanghai Banking Corporation, represented by
the private prosecution, is not the proper party to raise the constitutional question here — a point we
do not now have to decide — we are of the opinion that the People of the Philippines, represented
by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present
proceedings. The unchallenged rule is that the person who impugns the validity of a statute must
have a personal and substantial interest in the case such that he has sustained, or will sustain, direct
injury as a result of its enforcement. It goes without saying that if Act No. 4221 really violates the
Constitution, the People of the Philippines, in whose name the present action is brought, has a
substantial interest in having it set aside. Of greater import than the damage caused by the illegal
expenditure of public funds is the mortal wound inflicted upon the fundamental law by the
enforcement of an invalid statute. Hence, the well-settled rule that the state can challenge the
validity of its own laws. In Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259
(affirmed in Springer vs. Government of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed.,
845), this court declared an act of the legislature unconstitutional in an action instituted in behalf of
the Government of the Philippines. In Attorney General vs. Perkings([1889], 73 Mich., 303, 311, 312;
41 N.W., 426, 428, 429), the State of Michigan, through its Attorney General, instituted quo warranto
proceedings to test the right of the respondents to renew a mining corporation, alleging that the
statute under which the respondents base their right was unconstitutional because it impaired the
64
obligation of contracts. The capacity of the chief law officer of the state to question the
constitutionality of the statute was itself questioned. Said the Supreme Court of Michigan, through
Champlin, J.:
. . . The idea seems to be that the people are estopped from questioning the validity of a law
enacted by their representatives; that to an accusation by the people of Michigan of
usurpation their government, a statute enacted by the people of Michigan is an adequate
answer. The last proposition is true, but, if the statute relied on in justification is
unconstitutional, it is statute only in form, and lacks the force of law, and is of no more saving
effect to justify action under it than if it had never been enacted. The constitution is the
supreme law, and to its behests the courts, the legislature, and the people must bow . . . The
legislature and the respondents are not the only parties in interest upon such constitutional
questions. As was remarked by Mr. Justice Story, in speaking of an acquiescence by a party
affected by an unconstitutional act of the legislature: "The people have a deep and vested
interest in maintaining all the constitutional limitations upon the exercise of legislative
powers." (Allen vs. Mckeen, 1 Sum., 314.)
In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original action (mandamus) was
brought by the Attorney-General of Kansas to test the constitutionality of a statute of the state. In
disposing of the question whether or not the state may bring the action, the Supreme Court of
Kansas said:
. . . the state is a proper party — indeed, the proper party — to bring this action. The state is
always interested where the integrity of its Constitution or statutes is involved.
"It has an interest in seeing that the will of the Legislature is not disregarded,
and need not, as an individual plaintiff must, show grounds of fearing more
specific injury. (State vs. Kansas City 60 Kan., 518 [57 Pac., 118])." (State vs.
Lawrence, 80 Kan., 707; 103 Pac., 839.)
Where the constitutionality of a statute is in doubt the state's law officer, its Attorney-General,
or county attorney, may exercise his bet judgment as to what sort of action he will bring to
have the matter determined, either by quo warranto to challenge its validity (State vs.
Johnson, 61 Kan., 803; 60 Pac., 1068; 49 L.R.A., 662), by mandamus to compel obedience
to its terms (State vs. Dolley, 82 Kan., 533; 108 Pac., 846), or by injunction to restrain
proceedings under its questionable provisions (State ex rel. vs. City of Neodesha, 3 Kan.
App., 319; 45 Pac., 122).
Other courts have reached the same conclusion (See State vs. St. Louis S. W. Ry. Co. [1917], 197
S. W., 1006; State vs. S.H. Kress & Co. [1934], 155 S., 823; State vs. Walmsley [1935], 181 La.,
597; 160 S., 91; State vs. Board of County Comr's [1934], 39 Pac. [2d], 286; First Const. Co. of
Brooklyn vs. State [1917], 211 N.Y., 295; 116 N.E., 1020; Bush vs. State {1918], 187 Ind., 339; 119
N.E., 417; State vs. Watkins [1933], 176 La., 837; 147 S., 8, 10, 11). In the case last cited, the
Supreme Court of Luisiana said:
It is contended by counsel for Herbert Watkins that a district attorney, being charged with the
duty of enforcing the laws, has no right to plead that a law is unconstitutional. In support of
the argument three decisions are cited, viz.: State ex rel. Hall, District Attorney, vs. Judge of
Tenth Judicial District (33 La. Ann., 1222); State ex rel. Nicholls, Governor vs. Shakespeare,
Mayor of New Orleans (41 Ann., 156; 6 So., 592); and State ex rel., Banking Co., etc. vs.
Heard, Auditor (47 La. Ann., 1679; 18 So., 746; 47 L. R. A., 512). These decisions do not
forbid a district attorney to plead that a statute is unconstitutional if he finds if in conflict with
65
one which it is his duty to enforce. In State ex rel. Hall, District Attorney, vs. Judge, etc., the
ruling was the judge should not, merely because he believed a certain statute to be
unconstitutional forbid the district attorney to file a bill of information charging a person with a
violation of the statute. In other words, a judge should not judicially declare a statute
unconstitutional until the question of constitutionality is tendered for decision, and unless it
must be decided in order to determine the right of a party litigant. State ex rel. Nicholls,
Governor, etc., is authority for the proposition merely that an officer on whom a statute
imposes the duty of enforcing its provisions cannot avoid the duty upon the ground that he
considers the statute unconstitutional, and hence in enforcing the statute he is immune from
responsibility if the statute be unconstitutional. State ex rel. Banking Co., etc., is authority for
the proposition merely that executive officers, e.g., the state auditor and state treasurer,
should not decline to perform ministerial duties imposed upon them by a statute, on the
ground that they believe the statute is unconstitutional.
It is the duty of a district attorney to enforce the criminal laws of the state, and, above all, to
support the Constitution of the state. If, in the performance of his duty he finds two statutes in
conflict with each other, or one which repeals another, and if, in his judgment, one of the two
statutes is unconstitutional, it is his duty to enforce the other; and, in order to do so, he is
compelled to submit to the court, by way of a plea, that one of the statutes is
unconstitutional. If it were not so, the power of the Legislature would be free from
constitutional limitations in the enactment of criminal laws.
The respondents do not seem to doubt seriously the correctness of the general proposition that the
state may impugn the validity of its laws. They have not cited any authority running clearly in the
opposite direction. In fact, they appear to have proceeded on the assumption that the rule as stated
is sound but that it has no application in the present case, nor may it be invoked by the City Fiscal in
behalf of the People of the Philippines, one of the petitioners herein, the principal reasons being that
the validity before this court, that the City Fiscal is estopped from attacking the validity of the Act
and, not authorized challenge the validity of the Act in its application outside said city. (Additional
memorandum of respondents, October 23, 1937, pp. 8,. 10, 17 and 23.)
The mere fact that the Probation Act has been repeatedly relied upon the past and all that time has
not been attacked as unconstitutional by the Fiscal of Manila but, on the contrary, has been impliedly
regarded by him as constitutional, is no reason for considering the People of the Philippines
estopped from nor assailing its validity. For courts will pass upon a constitutional questions only
when presented before it in bona fide cases for determination, and the fact that the question has not
been raised before is not a valid reason for refusing to allow it to be raised later. The fiscal and all
others are justified in relying upon the statute and treating it as valid until it is held void by the courts
in proper cases.
It remains to consider whether the determination of the constitutionality of Act No. 4221 is necessary
to the resolution of the instant case. For, ". . . while the court will meet the question with firmness,
where its decision is indispensable, it is the part of wisdom, and just respect for the legislature,
renders it proper, to waive it, if the case in which it arises, can be decided on other points." (Ex
parte Randolph [1833], 20 F. Cas. No. 11, 558; 2 Brock., 447. Vide, also Hoover vs. wood [1857], 9
Ind., 286, 287.) It has been held that the determination of a constitutional question is necessary
whenever it is essential to the decision of the case (12 C. J., p. 782, citing Long Sault Dev. Co. vs.
Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp., 454 [aff. 212 N.Y., 1: 105 N. E., 849; Ann.
Cas. 1915D, 56; and app dism 242 U.S., 272]; Hesse vs. Ledesma, 7 Porto Rico Fed., 520; Cowan
vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line Co., vs. Wisconsin R. Commn., 146 Wis., 523; 129
N. W., 605), as where the right of a party is founded solely on a statute the validity of which is
attacked. (12 C.J., p. 782, citing Central Glass Co. vs. Niagrara F. Ins. Co., 131 La., 513; 59 S., 972;
66
Cheney vs. Beverly, 188 Mass., 81; 74 N.E., 306). There is no doubt that the respondent Cu Unjieng
draws his privilege to probation solely from Act No. 4221 now being assailed.
Apart from the foregoing considerations, that court will also take cognizance of the fact that the
Probation Act is a new addition to our statute books and its validity has never before been passed
upon by the courts; that may persons accused and convicted of crime in the City of Manila have
applied for probation; that some of them are already on probation; that more people will likely take
advantage of the Probation Act in the future; and that the respondent Mariano Cu Unjieng has been
at large for a period of about four years since his first conviction. All wait the decision of this court on
the constitutional question. Considering, therefore, the importance which the instant case has
assumed and to prevent multiplicity of suits, strong reasons of public policy demand that the
constitutionality of Act No. 4221 be now resolved. (Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385;
[1926], 271 U.S., 500; 70 Law. ed., 1059. See 6 R.C.L., pp. 77, 78; People vs. Kennedy [1913], 207
N.Y., 533; 101 N.E., 442, 444; Ann. Cas. 1914C, 616; Borginis vs. Falk Co. [1911], 147 Wis., 327;
133 N.W., 209, 211; 37 L.R.A. [N.S.] 489; Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil.,
304.) In Yu Cong Eng vs. Trinidad, supra, an analogous situation confronted us. We said: "Inasmuch
as the property and personal rights of nearly twelve thousand merchants are affected by these
proceedings, and inasmuch as Act No. 2972 is a new law not yet interpreted by the courts, in the
interest of the public welfare and for the advancement of public policy, we have determined to
overrule the defense of want of jurisdiction in order that we may decide the main issue. We have
here an extraordinary situation which calls for a relaxation of the general rule." Our ruling on this
point was sustained by the Supreme Court of the United States. A more binding authority in support
of the view we have taken can not be found.
We have reached the conclusion that the question of the constitutionality of Act No. 4221 has been
properly raised. Now for the main inquiry: Is the Act unconstitutional?
Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the
Constitution. This court, by clear implication from the provisions of section 2, subsection 1, and
section 10, of Article VIII of the Constitution, may declare an act of the national legislature invalid
because in conflict with the fundamental lay. It will not shirk from its sworn duty to enforce the
Constitution. And, in clear cases, it will not hesitate to give effect to the supreme law by setting aside
a statute in conflict therewith. This is of the essence of judicial duty.
This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable
doubts should be resolved in favor of the constitutionality of a statute. An act of the legislature
approved by the executive, is presumed to be within constitutional limitations. The responsibility of
upholding the Constitution rests not on the courts alone but on the legislature as well. "The question
of the validity of every statute is first determined by the legislative department of the government
itself." (U.S. vs. Ten Yu [1912], 24 Phil., 1, 10; Case vs. Board of Health and Heiser [1913], 24 Phil.,
250, 276; U.S. vs. Joson [1913], 26 Phil., 1.) And a statute finally comes before the courts sustained
by the sanction of the executive. The members of the Legislature and the Chief Executive have
taken an oath to support the Constitution and it must be presumed that they have been true to this
oath and that in enacting and sanctioning a particular law they did not intend to violate the
Constitution. The courts cannot but cautiously exercise its power to overturn the solemn declarations
of two of the three grand departments of the governments. (6 R.C.L., p. 101.) Then, there is that
peculiar political philosophy which bids the judiciary to reflect the wisdom of the people as expressed
through an elective Legislature and an elective Chief Executive. It follows, therefore, that the courts
will not set aside a law as violative of the Constitution except in a clear case. This is a proposition
too plain to require a citation of authorities.
67
One of the counsel for respondents, in the course of his impassioned argument, called attention to
the fact that the President of the Philippines had already expressed his opinion against the
constitutionality of the Probation Act, adverting that as to the Executive the resolution of this question
was a foregone conclusion. Counsel, however, reiterated his confidence in the integrity and
independence of this court. We take notice of the fact that the President in his message dated
September 1, 1937, recommended to the National Assembly the immediate repeal of the Probation
Act (No. 4221); that this message resulted in the approval of Bill No. 2417 of the Nationality
Assembly repealing the probation Act, subject to certain conditions therein mentioned; but that said
bill was vetoed by the President on September 13, 1937, much against his wish, "to have stricken
out from the statute books of the Commonwealth a law . . . unfair and very likely unconstitutional." It
is sufficient to observe in this connection that, in vetoing the bill referred to, the President exercised
his constitutional prerogative. He may express the reasons which he may deem proper for taking
such a step, but his reasons are not binding upon us in the determination of actual controversies
submitted for our determination. Whether or not the Executive should express or in any manner
insinuate his opinion on a matter encompassed within his broad constitutional power of veto but
which happens to be at the same time pending determination in this court is a question of propriety
for him exclusively to decide or determine. Whatever opinion is expressed by him under these
circumstances, however, cannot sway our judgment on way or another and prevent us from taking
what in our opinion is the proper course of action to take in a given case. It if is ever necessary for us
to make any vehement affirmance during this formative period of our political history, it is that we are
independent of the Executive no less than of the Legislative department of our government —
independent in the performance of our functions, undeterred by any consideration, free from politics,
indifferent to popularity, and unafraid of criticism in the accomplishment of our sworn duty as we see
it and as we understand it.
The constitutionality of Act No. 4221 is challenged on three principal grounds: (1) That said Act
encroaches upon the pardoning power of the Executive; (2) that its constitutes an undue delegation
of legislative power and (3) that it denies the equal protection of the laws.
1. Section 21 of the Act of Congress of August 29, 1916, commonly known as the Jones Law, in
force at the time of the approval of Act No. 4221, otherwise known as the Probation Act, vests in the
Governor-General of the Philippines "the exclusive power to grant pardons and reprieves and remit
fines and forfeitures". This power is now vested in the President of the Philippines. (Art. VII, sec. 11,
subsec. 6.) The provisions of the Jones Law and the Constitution differ in some respects. The
adjective "exclusive" found in the Jones Law has been omitted from the Constitution. Under the
Jones Law, as at common law, pardon could be granted any time after the commission of the
offense, either before or after conviction (Vide Constitution of the United States, Art. II, sec. 2; In
re Lontok [1922], 43 Phil., 293). The Governor-General of the Philippines was thus empowered, like
the President of the United States, to pardon a person before the facts of the case were fully brought
to light. The framers of our Constitution thought this undesirable and, following most of the state
constitutions, provided that the pardoning power can only be exercised "after conviction". So, too,
under the new Constitution, the pardoning power does not extend to "cases of impeachment". This is
also the rule generally followed in the United States (Vide Constitution of the United States, Art. II,
sec. 2). The rule in England is different. There, a royal pardon can not be pleaded in bar of an
impeachment; "but," says Blackstone, "after the impeachment has been solemnly heard and
determined, it is not understood that the king's royal grace is further restrained or abridged." (Vide,
Ex parte Wells [1856], 18 How., 307; 15 Law. ed., 421; Com. vs. Lockwood [1872], 109 Mass., 323;
12 Am. Rep., 699; Sterling vs. Drake [1876], 29 Ohio St., 457; 23 am. Rep., 762.) The reason for the
distinction is obvious. In England, Judgment on impeachment is not confined to mere "removal from
office and disqualification to hold and enjoy any office of honor, trust, or profit under the
Government" (Art. IX, sec. 4, Constitution of the Philippines) but extends to the whole punishment
attached by law to the offense committed. The House of Lords, on a conviction may, by its sentence,
inflict capital punishment, perpetual banishment, perpetual banishment, fine or imprisonment,
68
depending upon the gravity of the offense committed, together with removal from office and
incapacity to hold office. (Com. vs. Lockwood, supra.) Our Constitution also makes specific mention
of "commutation" and of the power of the executive to impose, in the pardons he may grant, such
conditions, restrictions and limitations as he may deem proper. Amnesty may be granted by the
President under the Constitution but only with the concurrence of the National Assembly. We need
not dwell at length on the significance of these fundamental changes. It is sufficient for our purposes
to state that the pardoning power has remained essentially the same. The question is: Has the
pardoning power of the Chief Executive under the Jones Law been impaired by the Probation Act?
As already stated, the Jones Law vests the pardoning power exclusively in the Chief Executive. The
exercise of the power may not, therefore, be vested in anyone else.
". . . The benign prerogative of mercy reposed in the executive cannot be taken away nor fettered by
any legislative restrictions, nor can like power be given by the legislature to any other officer or
authority. The coordinate departments of government have nothing to do with the pardoning power,
since no person properly belonging to one of the departments can exercise any powers appertaining
to either of the others except in cases expressly provided for by the constitution." (20 R.C.L., pp., ,
and cases cited.) " . . . where the pardoning power is conferred on the executive without express or
implied limitations, the grant is exclusive, and the legislature can neither exercise such power itself
nor delegate it elsewhere, nor interfere with or control the proper exercise thereof, . . ." (12 C.J., pp.
838, 839, and cases cited.) If Act No. 4221, then, confers any pardoning power upon the courts it is
for that reason unconstitutional and void. But does it?
In the famous Killitts decision involving an embezzlement case, the Supreme Court of the United
States ruled in 1916 that an order indefinitely suspending sentenced was void. (Ex parte United
States [1916], 242 U.S., 27; 61 Law. ed., 129; L.R.A. 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas.
1917B, 355.) Chief Justice White, after an exhaustive review of the authorities, expressed the
opinion of the court that under the common law the power of the court was limited to temporary
suspension and that the right to suspend sentenced absolutely and permanently was vested in the
executive branch of the government and not in the judiciary. But, the right of Congress to establish
probation by statute was conceded. Said the court through its Chief Justice: ". . . and so far as the
future is concerned, that is, the causing of the imposition of penalties as fixed to be subject, by
probation legislation or such other means as the legislative mind may devise, to such judicial
discretion as may be adequate to enable courts to meet by the exercise of an enlarged but wise
discretion the infinite variations which may be presented to them for judgment, recourse must be had
Congress whose legislative power on the subject is in the very nature of things adequately
complete." (Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.) This decision led the National
Probation Association and others to agitate for the enactment by Congress of a federal probation
law. Such action was finally taken on March 4, 1925 (chap. 521, 43 Stat. L. 159, U.S.C. title 18, sec.
724). This was followed by an appropriation to defray the salaries and expenses of a certain number
of probation officers chosen by civil service. (Johnson, Probation for Juveniles and Adults, p. 14.)
In United States vs. Murray ([1925], 275 U.S., 347; 48 Sup. Ct. Rep., 146; 72 Law. ed., 309), the
Supreme Court of the United States, through Chief Justice Taft, held that when a person sentenced
to imprisonment by a district court has begun to serve his sentence, that court has no power under
the Probation Act of March 4, 1925 to grant him probation even though the term at which sentence
was imposed had not yet expired. In this case of Murray, the constitutionality of the probation Act
was not considered but was assumed. The court traced the history of the Act and quoted from the
report of the Committee on the Judiciary of the United States House of Representatives (Report No.
1377, 68th Congress, 2 Session) the following statement:
Prior to the so-called Killitts case, rendered in December, 1916, the district courts exercised
a form of probation either, by suspending sentence or by placing the defendants under state
probation officers or volunteers. In this case, however (Ex parte United States, 242 U.S., 27;
69
61 L. Ed., 129; L.R.A., 1917E, 1178; 37 Sup. Ct. Rep., 72 Ann. Cas. 1917B, 355), the
Supreme Court denied the right of the district courts to suspend sentenced. In the same
opinion the court pointed out the necessity for action by Congress if the courts were to
exercise probation powers in the future . . .
Since this decision was rendered, two attempts have been made to enact probation
legislation. In 1917, a bill was favorably reported by the Judiciary Committee and passed the
House. In 1920, the judiciary Committee again favorably reported a probation bill to the
House, but it was never reached for definite action.
If this bill is enacted into law, it will bring the policy of the Federal government with reference
to its treatment of those convicted of violations of its criminal laws in harmony with that of the
states of the Union. At the present time every state has a probation law, and in all but twelve
states the law applies both to adult and juvenile offenders. (see, also, Johnson, Probation for
Juveniles and Adults [1928], Chap. I.)
The constitutionality of the federal probation law has been sustained by inferior federal courts. In
Riggs vs. United States supra, the Circuit Court of Appeals of the Fourth Circuit said:
Since the passage of the Probation Act of March 4, 1925, the questions under consideration
have been reviewed by the Circuit Court of Appeals of the Ninth Circuit (7 F. [2d], 590), and
the constitutionality of the act fully sustained, and the same held in no manner to encroach
upon the pardoning power of the President. This case will be found to contain an able and
comprehensive review of the law applicable here. It arose under the act we have to consider,
and to it and the authorities cited therein special reference is made (Nix vs. James, 7 F. [2d],
590, 594), as is also to a decision of the Circuit Court of Appeals of the Seventh Circuit
(Kriebel vs. U.S., 10 F. [2d], 762), likewise construing the Probation Act.
We have seen that in 1916 the Supreme Court of the United States; in plain and unequivocal
language, pointed to Congress as possessing the requisite power to enact probation laws, that a
federal probation law as actually enacted in 1925, and that the constitutionality of the Act has been
assumed by the Supreme Court of the United States in 1928 and consistently sustained by the
inferior federal courts in a number of earlier cases.
We are fully convinced that the Philippine Legislature, like the Congress of the United States, may
legally enact a probation law under its broad power to fix the punishment of any and all penal
offenses. This conclusion is supported by other authorities. In Ex parte Bates ([1915], 20 N. M., 542;
L.R.A. 1916A, 1285; 151 Pac., 698, the court said: "It is clearly within the province of the Legislature
to denominate and define all classes of crime, and to prescribe for each a minimum and maximum
punishment." And in State vs. Abbott ([1910], 87 S.C., 466; 33 L.R.A. [N. S.], 112; 70 S. E., 6; Ann.
Cas. 1912B, 1189), the court said: "The legislative power to set punishment for crime is very broad,
and in the exercise of this power the general assembly may confer on trial judges, if it sees fit, the
largest discretion as to the sentence to be imposed, as to the beginning and end of the punishment
and whether it should be certain or indeterminate or conditional." (Quoted in State vs. Teal [1918],
108 S. C., 455; 95 S. E., 69.) Indeed, the Philippine Legislature has defined all crimes and fixed the
penalties for their violation. Invariably, the legislature has demonstrated the desire to vest in the
courts — particularly the trial courts — large discretion in imposing the penalties which the law
prescribes in particular cases. It is believed that justice can best be served by vesting this power in
the courts, they being in a position to best determine the penalties which an individual convict,
peculiarly circumstanced, should suffer. Thus, while courts are not allowed to refrain from imposing a
sentence merely because, taking into consideration the degree of malice and the injury caused by
the offense, the penalty provided by law is clearly excessive, the courts being allowed in such case
70
to submit to the Chief Executive, through the Department of Justice, such statement as it may deem
proper (see art. 5, Revised Penal Code), in cases where both mitigating and aggravating
circumstances are attendant in the commission of a crime and the law provides for a penalty
composed of two indivisible penalties, the courts may allow such circumstances to offset one
another in consideration of their number and importance, and to apply the penalty according to the
result of such compensation. (Art. 63, rule 4, Revised Penal Code; U.S. vs. Reguera and Asuategui
[1921], 41 Phil., 506.) Again, article 64, paragraph 7, of the Revised Penal Code empowers the
courts to determine, within the limits of each periods, in case the penalty prescribed by law contains
three periods, the extent of the evil produced by the crime. In the imposition of fines, the courts are
allowed to fix any amount within the limits established by law, considering not only the mitigating and
aggravating circumstances, but more particularly the wealth or means of the culprit. (Art. 66, Revised
Penal Code.) Article 68, paragraph 1, of the same Code provides that "a discretionary penalty shall
be imposed" upon a person under fifteen but over nine years of age, who has not acted without
discernment, but always lower by two degrees at least than that prescribed by law for the crime
which he has committed. Article 69 of the same Code provides that in case of "incomplete self-
defense", i.e., when the crime committed is not wholly excusable by reason of the lack of some of
the conditions required to justify the same or to exempt from criminal liability in the several cases
mentioned in article 11 and 12 of the Code, "the courts shall impose the penalty in the period which
may be deemed proper, in view of the number and nature of the conditions of exemption present or
lacking." And, in case the commission of what are known as "impossible" crimes, "the court, having
in mind the social danger and the degree of criminality shown by the offender," shall impose upon
him either arresto mayor or a fine ranging from 200 to 500 pesos. (Art. 59, Revised Penal Code.)
Under our Revised Penal Code, also, one-half of the period of preventive imprisonment is deducted
form the entire term of imprisonment, except in certain cases expressly mentioned (art. 29); the
death penalty is not imposed when the guilty person is more than seventy years of age, or where
upon appeal or revision of the case by the Supreme Court, all the members thereof are not
unanimous in their voting as to the propriety of the imposition of the death penalty (art. 47, see also,
sec. 133, Revised Administrative Code, as amended by Commonwealth Act No. 3); the death
sentence is not to be inflicted upon a woman within the three years next following the date of the
sentence or while she is pregnant, or upon any person over seventy years of age (art. 83); and when
a convict shall become insane or an imbecile after final sentence has been pronounced, or while he
is serving his sentenced, the execution of said sentence shall be suspended with regard to the
personal penalty during the period of such insanity or imbecility (art. 79).
But the desire of the legislature to relax what might result in the undue harshness of the penal laws
is more clearly demonstrated in various other enactments, including the probation Act. There is the
Indeterminate Sentence Law enacted in 1933 as Act No. 4103 and subsequently amended by Act
No. 4225, establishing a system of parole (secs. 5 to 100 and granting the courts large discretion in
imposing the penalties of the law. Section 1 of the law as amended provides; "hereafter, in imposing
a prison sentence for an offenses punished by the Revised Penal Code, or its amendments, the
court shall sentence the accused to an indeterminate sentence the maximum term of which shall be
that which, in view of the attending circumstances, could be properly imposed under the rules of the
said Code, and to a minimum which shall be within the range of the penalty next lower to that
prescribed by the Code for the offense; and if the offense is punished by any other law, the court
shall sentence the accused to an indeterminate sentence, the maximum term of which shall not
exceed the maximum fixed by said law and the minimum shall not be less than the minimum term
prescribed by the same." Certain classes of convicts are, by section 2 of the law, excluded from the
operation thereof. The Legislature has also enacted the Juvenile Delinquency Law (Act No. 3203)
which was subsequently amended by Act No. 3559. Section 7 of the original Act and section 1 of the
amendatory Act have become article 80 of the Revised Penal Code, amended by Act No. 4117 of
the Philippine Legislature and recently reamended by Commonwealth Act No. 99 of the National
Assembly. In this Act is again manifested the intention of the legislature to "humanize" the penal
71
laws. It allows, in effect, the modification in particular cases of the penalties prescribed by law by
permitting the suspension of the execution of the judgment in the discretion of the trial court, after
due hearing and after investigation of the particular circumstances of the offenses, the criminal
record, if any, of the convict, and his social history. The Legislature has in reality decreed that in
certain cases no punishment at all shall be suffered by the convict as long as the conditions of
probation are faithfully observed. It this be so, then, it cannot be said that the Probation Act comes in
conflict with the power of the Chief Executive to grant pardons and reprieves, because, to use the
language of the Supreme Court of New Mexico, "the element of punishment or the penalty for the
commission of a wrong, while to be declared by the courts as a judicial function under and within the
limits of law as announced by legislative acts, concerns solely the procedure and conduct of criminal
causes, with which the executive can have nothing to do." (Ex parte Bates, supra.) In Williams vs.
State ([1926], 162 Ga., 327; 133 S.E., 843), the court upheld the constitutionality of the Georgia
probation statute against the contention that it attempted to delegate to the courts the pardoning
power lodged by the constitution in the governor alone is vested with the power to pardon after final
sentence has been imposed by the courts, the power of the courts to imposed any penalty which
may be from time to time prescribed by law and in such manner as may be defined cannot be
questioned."
We realize, of course, the conflict which the American cases disclose. Some cases hold it unlawful
for the legislature to vest in the courts the power to suspend the operation of a sentenced, by
probation or otherwise, as to do so would encroach upon the pardoning power of the executive. (In
re Webb [1895], 89 Wis., 354; 27 L.R.A., 356; 46 Am. St. Rep., 846; 62 N.W., 177; 9 Am. Crim.,
Rep., 702; State ex rel. Summerfield vs. Moran [1919], 43 Nev., 150; 182 Pac., 927; Ex
parte Clendenning [1908], 22 Okla., 108; 1 Okla. Crim. Rep., 227; 19 L.R.A. [N.S.], 1041; 132 Am.
St. Rep., 628; 97 Pac., 650; People vs. Barrett [1903], 202 Ill, 287; 67 N.E., 23; 63 L.R.A., 82; 95
Am. St. Rep., 230; Snodgrass vs. State [1912], 67 Tex. Crim. Rep., 615; 41 L. R. A. [N. S.], 1144;
150 S. W., 162; Ex parte Shelor [1910], 33 Nev., 361;111 Pac., 291; Neal vs. State [1898], 104 Ga.,
509; 42 L. R. A., 190; 69 Am. St. Rep., 175; 30 S. E. 858; State ex rel. Payne vs. Anderson [1921],
43 S. D., 630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571; States vs. Dalton
[1903], 109 Tenn., 544; 72 S. W., 456.)
Other cases, however, hold contra. (Nix vs. James [1925; C. C. A., 9th], 7 F. [2d], 590; Archer vs.
Snook [1926; D. C.], 10 F. [2d], 567; Riggs. vs. United States [1926; C. C. A. 4th], 14]) [2d], 5;
Murphy vs. States [1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re Giannini [1912], 18
Cal. App., 166; 122 Pac., 831; Re Nachnaber [1928], 89 Cal. App., 530; 265 Pac., 392; Ex parte De
Voe [1931], 114 Cal. App., 730; 300 Pac., 874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac.,
425; Martin vs. People [1917], 69 Colo., 60; 168 Pac., 1171; Belden vs. Hugo [1914], 88 Conn., 50;
91 A., 369, 370, 371; Williams vs. State [1926], 162 Ga., 327; 133 S. E., 843; People vs. Heise
[1913], 257 Ill., 443; 100 N. E., 1000; Parker vs. State [1893], 135 Ind., 534; 35 N. E., 179; 23 L. R.
A., 859; St. Hillarie, Petitioner [1906], 101 Me., 522; 64 Atl., 882; People vs. Stickle [1909], 156
Mich., 557; 121 N. W., 497; State vs. Fjolander [1914], 125 Minn., 529; State ex rel. Bottomnly vs.
District Court [1925], 73 Mont., 541; 237 Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79 S. E.,
274; 47 L. R. A. [N. S.], 848; State ex rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl., 875; State
vs. Osborne [1911], 79 N. J. Eq., 430; 82 Atl. 424; Ex parte Bates [1915], 20 N. M., 542; L. R. A.,
1916 A. 1285; 151 Pac., 698; People vs. ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288;
23 L. R. A., 856; 36 N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907], 55
Misc., 639; 106 N. Y. Supp., 928; People vs. Goodrich [1914], 149 N. Y. Supp., 406; Moore vs.
Thorn [1935], 245 App. Div., 180; 281 N. Y. Supp., 49; Re Hart [1914], 29 N. D., 38; L. R. A., 1915C,
1169; 149 N. W., 568; Ex parte Eaton [1925], 29 Okla., Crim. Rep., 275; 233 P., 781; State vs. Teal
[1918], 108 S. C., 455; 95 S. E., 69; State vs. Abbot [1910], 87 S. C., 466; 33 L.R.A., [N. S.], 112; 70
S. E., 6; Ann. Cas., 1912B, 1189; Fults vs. States [1854],34 Tenn., 232; Woods vs. State [1814], 130
Tenn., 100; 169 S. W., 558; Baker vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State
[1913],70 Tex., Crim. Rep., 618; 158 S. W., 998; Cook vs. State [1914], 73 Tex. Crim. Rep., 548;
72
165 S. W., 573; King vs. State [1914], 72 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State
[1932], 122 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim. Rep., 211;
54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136 A., 24; Richardson vs. Com. [1921], 131 Va.,
802; 109 S.E., 460; State vs. Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex rel. Tingstand
vs. Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393; 396.) We elect to follow this
long catena of authorities holding that the courts may be legally authorized by the legislature to
suspend sentence by the establishment of a system of probation however characterized. State ex
rel. Tingstand vs. Starwich ([1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393), deserved
particular mention. In that case, a statute enacted in 1921 which provided for the suspension of the
execution of a sentence until otherwise ordered by the court, and required that the convicted person
be placed under the charge of a parole or peace officer during the term of such suspension, on such
terms as the court may determine, was held constitutional and as not giving the court a power in
violation of the constitutional provision vesting the pardoning power in the chief executive of the
state. (Vide, also, Re Giannini [1912], 18 Cal App., 166; 122 Pac., 831.)
Probation and pardon are not coterminous; nor are they the same. They are actually district and
different from each other, both in origin and in nature. In People ex rel. Forsyth vs. Court of Sessions
([1894], 141 N. Y., 288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am. Crim. Rep., 675), the Court
of Appeals of New York said:
. . . The power to suspend sentence and the power to grant reprieves and pardons, as
understood when the constitution was adopted, are totally distinct and different in their
nature. The former was always a part of the judicial power; the latter was always a part of the
executive power. The suspension of the sentence simply postpones the judgment of the
court temporarily or indefinitely, but the conviction and liability following it, and the civil
disabilities, remain and become operative when judgment is rendered. A pardon reaches
both the punishment prescribed for the offense and the guilt of the offender. It releases the
punishment, and blots out of existence the guilt, so that in the eye of the law, the offender is
as innocent as if he had never committed the offense. It removes the penalties and
disabilities, and restores him to all his civil rights. It makes him, as it were, a new man, and
gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4 Wall., 333; 18 Law. ed.,
366; U. S. vs. Klein, 80 U. S., 13 Wall., 128; 20 Law. ed., 519; Knote vs. U. S., 95 U. S., 149;
24 Law. ed., 442.)
The framers of the federal and the state constitutions were perfectly familiar with the
principles governing the power to grant pardons, and it was conferred by these instruments
upon the executive with full knowledge of the law upon the subject, and the words of the
constitution were used to express the authority formerly exercised by the English crown, or
by its representatives in the colonies. (Ex parte Wells, 59 U. S., 18 How., 307; 15 Law. ed.,
421.) As this power was understood, it did not comprehend any part of the judicial functions
to suspend sentence, and it was never intended that the authority to grant reprieves and
pardons should abrogate, or in any degree restrict, the exercise of that power in regard to its
own judgments, that criminal courts has so long maintained. The two powers, so distinct and
different in their nature and character, were still left separate and distinct, the one to be
exercised by the executive, and the other by the judicial department. We therefore conclude
that a statute which, in terms, authorizes courts of criminal jurisdiction to suspend sentence
in certain cases after conviction, — a power inherent in such courts at common law, which
was understood when the constitution was adopted to be an ordinary judicial function, and
which, ever since its adoption, has been exercised of legislative power under the
constitution. It does not encroach, in any just sense, upon the powers of the executive, as
they have been understood and practiced from the earliest times. (Quoted with approval in
Directors of Prisons vs. Judge of First Instance of Cavite [1915], 29 Phil., 265, Carson, J.,
concurring, at pp. 294, 295.)
73
In probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and
completely exonerated. He is not exempt from the entire punishment which the law inflicts. Under
the Probation Act, the probationer's case is not terminated by the mere fact that he is placed on
probation. Section 4 of the Act provides that the probation may be definitely terminated and the
probationer finally discharged from supervision only after the period of probation shall have been
terminated and the probation officer shall have submitted a report, and the court shall have found
that the probationer has complied with the conditions of probation. The probationer, then, during the
period of probation, remains in legal custody — subject to the control of the probation officer and of
the court; and, he may be rearrested upon the non-fulfillment of the conditions of probation and,
when rearrested, may be committed to prison to serve the sentence originally imposed upon him.
(Secs. 2, 3, 5 and 6, Act No. 4221.)
The probation described in the act is not pardon. It is not complete liberty, and may be far
from it. It is really a new mode of punishment, to be applied by the judge in a proper case, in
substitution of the imprisonment and find prescribed by the criminal laws. For this reason its
application is as purely a judicial act as any other sentence carrying out the law deemed
applicable to the offense. The executive act of pardon, on the contrary, is against the criminal
law, which binds and directs the judges, or rather is outside of and above it. There is thus no
conflict with the pardoning power, and no possible unconstitutionality of the Probation Act for
this cause. (Archer vs. Snook [1926], 10 F. [2d], 567, 569.)
Probation should also be distinguished from reprieve and from commutation of the sentence.
Snodgrass vs. State ([1912], 67 Tex. Crim. Rep., 615;41 L. R. A. [N. S.], 1144; 150 S. W., 162), is
relied upon most strongly by the petitioners as authority in support of their contention that the power
to grant pardons and reprieves, having been vested exclusively upon the Chief Executive by the
Jones Law, may not be conferred by the legislature upon the courts by means of probation law
authorizing the indefinite judicial suspension of sentence. We have examined that case and found
that although the Court of Criminal Appeals of Texas held that the probation statute of the state in
terms conferred on the district courts the power to grant pardons to persons convicted of crime, it
also distinguished between suspensions sentence on the one hand, and reprieve and commutation
of sentence on the other. Said the court, through Harper, J.:
That the power to suspend the sentence does not conflict with the power of the Governor to
grant reprieves is settled by the decisions of the various courts; it being held that the
distinction between a "reprieve" and a suspension of sentence is that a reprieve postpones
the execution of the sentence to a day certain, whereas a suspension is for an indefinite
time. (Carnal vs. People, 1 Parker, Cr. R., 262; In re Buchanan, 146 N. Y., 264; 40 N. E.,
883), and cases cited in 7 Words & Phrases, pp. 6115, 6116. This law cannot be hold in
conflict with the power confiding in the Governor to grant commutations of punishment, for a
commutations is not but to change the punishment assessed to a less punishment.
In State ex rel. Bottomnly vs. District Court ([1925], 73 Mont., 541; 237 Pac., 525), the Supreme
Court of Montana had under consideration the validity of the adult probation law of the state enacted
in 1913, now found in sections 12078-12086, Revised Codes of 1921. The court held the law valid
as not impinging upon the pardoning power of the executive. In a unanimous decision penned by
Justice Holloway, the court said:
. . . . the term "pardon", "commutation", and "respite" each had a well understood meaning at
the time our Constitution was adopted, and no one of them was intended to comprehend the
suspension of the execution of the judgment as that phrase is employed in sections 12078-
12086. A "pardon" is an act of grace, proceeding from the power intrusted with the execution
of the laws which exempts the individual on whom it is bestowed from the punishment the
74
law inflicts for a crime he has committed (United States vs. Wilson, 7 Pet., 150; 8 Law. ed.,
640); It is a remission of guilt (State vs. Lewis, 111 La., 693; 35 So., 816), a forgiveness of
the offense (Cook vs. Middlesex County, 26 N. J. Law, 326; Ex parte Powell, 73 Ala., 517; 49
Am. Rep., 71). "Commutation" is a remission of a part of the punishment; a substitution of a
less penalty for the one originally imposed (Lee vs. Murphy, 22 Grat. [Va.] 789; 12 Am. Rep.,
563; Rich vs. Chamberlain, 107 Mich., 381; 65 N. W., 235). A "reprieve" or "respite" is the
withholding of the sentence for an interval of time (4 Blackstone's Commentaries, 394), a
postponement of execution (Carnal vs. People, 1 Parker, Cr. R. [N. Y.], 272), a temporary
suspension of execution (Butler vs. State, 97 Ind., 373).
Few adjudicated cases are to be found in which the validity of a statute similar to our section
12078 has been determined; but the same objections have been urged against parole
statutes which vest the power to parole in persons other than those to whom the power of
pardon is granted, and these statutes have been upheld quite uniformly, as a reference to
the numerous cases cited in the notes to Woods vs. State (130 Tenn., 100; 169 S. W.,558,
reported in L. R. A., 1915F, 531), will disclose. (See, also, 20 R. C. L., 524.)
We conclude that the Probation Act does not conflict with the pardoning power of the Executive. The
pardoning power, in respect to those serving their probationary sentences, remains as full and
complete as if the Probation Law had never been enacted. The President may yet pardon the
probationer and thus place it beyond the power of the court to order his rearrest and imprisonment.
(Riggs vs. United States [1926],
14 F. [2d], 5, 7.)
2. But while the Probation Law does not encroach upon the pardoning power of the executive and is
not for that reason void, does section 11 thereof constitute, as contended, an undue delegation of
legislative power?
Under the constitutional system, the powers of government are distributed among three coordinate
and substantially independent organs: the legislative, the executive and the judicial. Each of these
departments of the government derives its authority from the Constitution which, in turn, is the
highest expression of popular will. Each has exclusive cognizance of the matters within its
jurisdiction, and is supreme within its own sphere.
The power to make laws — the legislative power — is vested in a bicameral Legislature by the
Jones Law (sec. 12) and in a unicamiral National Assembly by the Constitution (Act. VI, sec. 1,
Constitution of the Philippines). 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. (5 Encyc. of the Social Sciences, p. 66.) The
classic statement of the rule is that of Locke, namely: "The legislative neither must nor can transfer
the power of making laws to anybody else, or place it anywhere but where the people have." (Locke
on Civil Government, sec. 142.) Judge Cooley enunciates the doctrine in the following oft-quoted
language: "One of the settled maxims in constitutional law is, that the power conferred upon the
legislature to make laws cannot be delegated by that department to any other body or authority.
Where the sovereign power of the state has located the authority, there it must remain; and by the
constitutional agency alone the laws must be made until the Constitution itself is charged. The power
to whose judgment, wisdom, and patriotism this high prerogative has been intrusted cannot relieve
75
itself of the responsibilities by choosing other agencies upon which the power shall be devolved, nor
can it substitute the judgment, wisdom, and patriotism of any other body for those to which alone the
people have seen fit to confide this sovereign trust." (Cooley on Constitutional Limitations, 8th ed.,
Vol. I, p. 224. Quoted with approval in U. S. vs. Barrias [1908], 11 Phil., 327.) This court posits the
doctrine "on the ethical principle that such a delegated power constitutes not only a right but a duty
to be performed by the delegate by the instrumentality of his own judgment acting immediately upon
the matter of legislation and not through the intervening mind of another. (U. S. vs. Barrias, supra, at
p. 330.)
The rule, however, which forbids the delegation of legislative power is not absolute and inflexible. It
admits of exceptions. An exceptions sanctioned by immemorial practice permits the central
legislative body to delegate legislative powers to local authorities. (Rubi vs. Provincial Board of
Mindoro [1919], 39 Phil., 660; U. S. vs. Salaveria [1918], 39 Phil., 102; Stoutenburgh vs. Hennick
[1889], 129 U. S., 141; 32 Law. ed., 637; 9 Sup. Ct. Rep., 256; State vs. Noyes [1855], 30 N. H.,
279.) "It is a cardinal principle of our system of government, that local affairs shall be managed by
local authorities, and general affairs by the central authorities; and hence while the rule is also
fundamental that the power to make laws cannot be delegated, the creation of the municipalities
exercising local self government has never been held to trench upon that rule. Such legislation is not
regarded as a transfer of general legislative power, but rather as the grant of the authority to
prescribed local regulations, according to immemorial practice, subject of course to the interposition
of the superior in cases of necessity." (Stoutenburgh vs. Hennick, supra.) On quite the same
principle, Congress is powered to delegate legislative power to such agencies in the territories of the
United States as it may select. A territory stands in the same relation to Congress as a municipality
or city to the state government. (United States vs. Heinszen [1907], 206 U. S., 370; 27 Sup. Ct.
Rep., 742; 51 L. ed., 1098; 11 Ann. Cas., 688; Dorr vs. United States [1904], 195 U.S., 138; 24 Sup.
Ct. Rep., 808; 49 Law. ed., 128; 1 Ann. Cas., 697.) Courts have also sustained the delegation of
legislative power to the people at large. Some authorities maintain that this may not be done (12 C.
J., pp. 841, 842; 6 R. C. L., p. 164, citing People vs. Kennedy [1913], 207 N. Y., 533; 101 N. E., 442;
Ann. Cas., 1914C, 616). However, the question of whether or not a state has ceased to be
republican in form because of its adoption of the initiative and referendum has been held not to be a
judicial but a political question (Pacific States Tel. & Tel. Co. vs. Oregon [1912], 223 U. S., 118; 56
Law. ed., 377; 32 Sup. Cet. Rep., 224), and as the constitutionality of such laws has been looked
upon with favor by certain progressive courts, the sting of the decisions of the more conservative
courts has been pretty well drawn. (Opinions of the Justices [1894], 160 Mass., 586; 36 N. E., 488;
23 L. R. A., 113; Kiernan vs. Portland [1910], 57 Ore., 454; 111 Pac., 379; 1132 Pac., 402; 37 L. R.
A. [N. S.], 332; Pacific States Tel. & Tel. Co. vs. Oregon, supra.) Doubtless, also, legislative power
may be delegated by the 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." And section 16 of the same article of the
Constitution provides that "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
prescribed, to promulgate rules and regulations to carry out a declared national policy." It is beyond
the scope of this decision to determine whether or not, in the absence of the foregoing constitutional
provisions, the President could be authorized to exercise the powers thereby vested in him. Upon
the other hand, whatever doubt may have existed has been removed by the Constitution itself.
The case before us does not fall under any of the exceptions hereinabove mentioned.
The challenged section of Act No. 4221 in section 11 which reads as follows:
This Act shall apply only in those provinces in which the respective provincial boards have
provided for the salary of a probation officer at rates not lower than those now provided for
76
provincial fiscals. Said probation officer shall be appointed by the Secretary of Justice and
shall be subject to the direction of the Probation Office. (Emphasis ours.)
In testing whether a statute constitute 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 was left to the judgment of any other appointee or delegate of the
legislature. (6 R. C. L., p. 165.) In the United States vs. Ang Tang Ho ([1922], 43 Phil., 1), this court
adhered to the foregoing rule when it held an act of the legislature void in so far as it undertook to
authorize the Governor-General, in his discretion, to issue a proclamation fixing the price of rice and
to make the sale of it in violation of the proclamation a crime. (See and cf. Compañia General de
Tabacos vs. Board of Public Utility Commissioners [1916], 34 Phil., 136.) The general rule, however,
is limited by another 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. (6 R.
C. L., pp. 177-179.)
For the purpose of Probation Act, the provincial boards may be regarded as administrative bodies
endowed with power to determine when the Act should take effect in their respective provinces.
They are the agents or delegates of the legislature in this respect. The rules governing delegation of
legislative power to administrative and executive officers are applicable or are at least indicative of
the rule which should be here adopted. An examination of a variety of cases on delegation of power
to administrative bodies will show that the ratio decidendi is at variance but, it can be broadly
asserted that the rationale revolves around the presence or absence of a standard or rule of action
— or the sufficiency thereof — in the statute, to aid the delegate in exercising the granted discretion.
In some cases, it is held that the standard is sufficient; in others that is insufficient; and in still others
that it is entirely lacking. As a rule, an act of the legislature is incomplete and hence invalid if it does
not lay down any rule or definite standard by which the administrative officer or board may be guided
in the exercise of the discretionary powers delegated to it. (See Schecter vs. United States [1925],
295 U. S., 495; 79 L. ed., 1570; 55 Sup. Ct. Rep., 837; 97 A.L.R., 947; People ex rel. Rice vs. Wilson
Oil Co. [1936], 364 Ill., 406; 4 N. E. [2d], 847; 107 A.L.R., 1500 and cases cited. See also R. C. L.,
title "Constitutional Law", sec 174.) In the case at bar, what rules are to guide the provincial boards
in the exercise of their discretionary power to determine whether or not the Probation Act shall apply
in their respective provinces? What standards are fixed by the Act? We do not find any and none
has been pointed to us by the respondents. 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, if we may use the language of Justice Cardozo in the recent
case of Schecter, supra, is a "roving commission" which enables the provincial boards to exercise
arbitrary discretion. By section 11 if the Act, the legislature does not 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. In other words, the provincial boards of the various provinces
are to determine for themselves, whether the Probation Law shall apply to their provinces or not at
all. The applicability and application of the Probation Act are entirely placed in the hands of the
provincial boards. If the 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. The
plain language of the Act is not susceptible of any other interpretation. This, to our minds, is a virtual
surrender of legislative power to the provincial boards.
"The true distinction", says Judge Ranney, "is between the delegation of power to make the law,
which necessarily involves a discretion 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 County
Comrs. [1852]; 1 Ohio St., 77, 88. See also, Sutherland on Statutory Construction, sec 68.) To the
same effect are the decision of this court in Municipality of Cardona vs. Municipality of
Binangonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of Mindoro ([1919],39 Phil., 660)
77
and Cruz vs. Youngberg ([1931], 56 Phil., 234). In the first of these cases, this court sustained the
validity of the law conferring upon the Governor-General authority to adjust provincial and municipal
boundaries. In the second case, this court held it lawful for the legislature to direct non-Christian
inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor
and approved by the provincial board. In the third case, it was held proper for the legislature to vest
in the Governor-General authority to suspend or not, at his discretion, the prohibition of the
importation of the foreign cattle, such prohibition to be raised "if the conditions of the country make
this advisable or if deceased among foreign cattle has ceased to be a menace to the agriculture and
livestock of the lands."
It should be observed that in the case at bar we are not concerned with the simple transference of
details of execution or the promulgation by executive or administrative officials of rules and
regulations to carry into effect the provisions of a law. If we were, recurrence to our own decisions
would be sufficient. (U. S. vs. Barrias [1908], 11 Phil., 327; U.S. vs. Molina [1914], 29 Phil., 119;
Alegre vs. Collector of Customs [1929], 53 Phil., 394; Cebu Autobus Co. vs. De Jesus [1931], 56
Phil., 446; U. S. vs. Gomez [1915], 31 Phil., 218; Rubi vs. Provincial Board of Mindoro [1919], 39
Phil., 660.)
It is connected, however, that a legislative act may be made to the effect as law after it leaves the
hands of the legislature. It is true that laws may be made effective on certain contingencies, as by
proclamation of the executive or the adoption by the people of a particular community (6 R. C. L.,
116, 170-172; Cooley, Constitutional Limitations, 8th ed., Vol. I, p. 227). In Wayman vs. Southard
([1825], 10 Wheat. 1; 6 Law. ed., 253), the Supreme Court of the United State ruled that the
legislature may delegate a power not legislative which it may itself rightfully exercise.(Vide, also,
Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N. W., 738; 31 L. R. A., 112.) The power to
ascertain facts is such a power which may be delegated. There is nothing essentially legislative in
ascertaining the existence of facts or conditions as the basis of the taking into effect of a law. That is
a mental process common to all branches of the government. (Dowling vs. Lancashire Ins.
Co., supra; In re Village of North Milwaukee [1896], 93 Wis., 616; 97 N.W., 1033; 33 L.R.A., 938;
Nash vs. Fries [1906], 129 Wis., 120; 108 N.W., 210; Field vs. Clark [1892], 143 U.S., 649; 12 Sup.
Ct., 495; 36 Law. ed., 294.) Notwithstanding the apparent tendency, however, to relax the rule
prohibiting delegation of legislative authority on account of the complexity arising from social and
economic forces at work in this modern industrial age (Pfiffner, Public Administration [1936] ch. XX;
Laski, "The Mother of Parliaments", foreign Affairs, July, 1931, Vol. IX, No. 4, pp. 569-579; Beard,
"Squirt-Gun Politics", in Harper's Monthly Magazine, July, 1930, Vol. CLXI, pp. 147, 152), the
orthodox pronouncement of Judge Cooley in his work on Constitutional Limitations finds restatement
in Prof. Willoughby's treatise on the Constitution of the United States in the following language —
speaking of declaration of legislative power to administrative agencies: "The principle which permits
the legislature to provide that the administrative agent may determine when the circumstances are
such as require the application of a law is defended upon the ground that at the time this authority is
granted, the rule of public policy, which is the essence of the legislative act, is determined by the
legislature. In other words, the legislature, as it its duty to do, determines that, under given
circumstances, certain executive or administrative action is to be taken, and that, under other
circumstances, different of no action at all is to be taken. What is thus left to the administrative
official is not the legislative determination of what public policy demands, but simply the
ascertainment of what the facts of the case require to be done according to the terms of the law by
which he is governed." (Willoughby on the Constitution of the United States, 2nd ed., Vol. II, p.
1637.) In Miller vs. Mayer, etc., of New York [1883], 109 U.S., 3 Sup. Ct. Rep., 228; 27 Law. ed.,
971, 974), it was said: "The efficiency of an Act as a declaration of legislative will must, of course,
come from Congress, but the ascertainment of the contingency upon which the Act shall take effect
may be left to such agencies as it may designate." (See, also, 12 C.J., p. 864; State vs. Parker
[1854], 26 Vt., 357; Blanding vs. Burr [1859], 13 Cal., 343, 258.) The legislature, then may provide
that a contingencies leaving to some other person or body the power to determine when the
78
specified contingencies has arisen. But, in the case at bar, the legislature has not made the
operation of the Prohibition Act contingent upon specified facts or conditions to be ascertained by
the provincial board. It leaves, as we have already said, the entire operation or non-operation of the
law upon the provincial board. the discretion vested is arbitrary because it is absolute and unlimited.
A provincial board need not investigate conditions or find any fact, or await the happening of any
specified contingency. It is bound by no rule, — limited by no principle of expendiency announced by
the legislature. It may take into consideration certain facts or conditions; and, again, it may not. It
may have any purpose or no purpose at all. It need not give any reason whatsoever for refusing or
failing to appropriate any funds for the salary of a probation officer. This is a matter which rest
entirely at its pleasure. The fact that at some future time — we cannot say when — the provincial
boards may appropriate funds for the salaries of probation officers and thus put the law into
operation in the various provinces will not save the statute. The time of its taking into effect, we
reiterate, would yet be based solely upon the will of the provincial boards and not upon the
happening of a certain specified contingency, or upon the ascertainment of certain facts or
conditions by a person or body other than legislature itself.
The various provincial boards are, in practical effect, endowed with the power of suspending the
operation of the Probation Law in their respective provinces. In some jurisdiction, constitutions
provided that laws may be suspended only by the legislature or by its authority. Thus, section 28,
article I of the Constitution of Texas provides that "No power of suspending laws in this state shall be
exercised except by the legislature"; and section 26, article I of the Constitution of Indiana provides
"That the operation of the laws shall never be suspended, except by authority of the General
Assembly." Yet, even provisions of this sort do not confer absolute power of suspension upon the
legislature. While it may be undoubted that the legislature may suspend a law, or the execution or
operation of a law, a law may not be suspended as to certain individuals only, leaving the law to be
enjoyed by others. The suspension must be general, and cannot be made for individual cases or for
particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec., 174, 177, 178), it was
said:
By the twentieth article of the declaration of rights in the constitution of this commonwealth, it
is declared that the power of suspending the laws, or the execution of the laws, ought never
to be exercised but by the legislature, or by authority derived from it, to be exercised in such
particular cases only as the legislature shall expressly provide for. Many of the articles in that
declaration of rights were adopted from the Magna Charta of England, and from the bill of
rights passed in the reign of William and Mary. The bill of rights contains an enumeration of
the oppressive acts of James II, tending to subvert and extirpate the protestant religion, and
the laws and liberties of the kingdom; and the first of them is the assuming and exercising a
power of dispensing with and suspending the laws, and the execution of the laws without
consent of parliament. The first article in the claim or declaration of rights contained in the
statute is, that the exercise of such power, by legal authority without consent of parliament, is
illegal. In the tenth section of the same statute it is further declared and enacted, that "No
dispensation by non obstante of or to any statute, or part thereof, should be allowed; but the
same should be held void and of no effect, except a dispensation be allowed of in such
statute." There is an implied reservation of authority in the parliament to exercise the power
here mentioned; because, according to the theory of the English Constitution, "that absolute
despotic power, which must in all governments reside somewhere," is intrusted to the
parliament: 1 Bl. Com., 160.
The principles of our government are widely different in this particular. Here the sovereign
and absolute power resides in the people; and the legislature can only exercise what is
delegated to them according to the constitution. It is obvious that the exercise of the power in
question would be equally oppressive to the subject, and subversive of his right to protection,
"according to standing laws," whether exercised by one man or by a number of men. It
79
cannot be supposed that the people when adopting this general principle from the English bill
of rights and inserting it in our constitution, intended to bestow by implication on the general
court one of the most odious and oppressive prerogatives of the ancient kings of England. It
is manifestly contrary to the first principles of civil liberty and natural justice, and to the spirit
of our constitution and laws, that any one citizen should enjoy privileges and advantages
which are denied to all others under like circumstances; or that ant one should be subject to
losses, damages, suits, or actions from which all others under like circumstances are
exempted.
To illustrate the principle: A section of a statute relative to dogs made the owner of any dog liable to
the owner of domestic animals wounded by it for the damages without proving a knowledge of it
vicious disposition. By a provision of the act, power was given to the board of supervisors to
determine whether or not during the current year their county should be governed by the provisions
of the act of which that section constituted a part. It was held that the legislature could not confer that
power. The court observed that it could no more confer such a power than to authorize the board of
supervisors of a county to abolish in such county the days of grace on commercial paper, or to
suspend the statute of limitations. (Slinger vs. Henneman [1875], 38 Wis., 504.) A similar statute in
Missouri was held void for the same reason in State vs. Field ([1853, 17 Mo., 529;59 Am. Dec., 275.)
In that case a general statute formulating a road system contained a provision that "if the county
court of any county should be of opinion that the provisions of the act should not be enforced, they
might, in their discretion, suspend the operation of the same for any specified length of time, and
thereupon the act should become inoperative in such county for the period specified in such order;
and thereupon order the roads to be opened and kept in good repair, under the laws theretofore in
force." Said the court: ". . . this act, by its own provisions, repeals the inconsistent provisions of a
former act, and yet it is left to the county court to say which act shall be enforce in their county. The
act does not submit the question to the county court as an original question, to be decided by that
tribunal, whether the act shall commence its operation within the county; but it became by its own
terms a law in every county not excepted by name in the act. It did not, then, require the county court
to do any act in order to give it effect. But being the law in the county, and having by its provisions
superseded and abrogated the inconsistent provisions of previous laws, the county court is . . .
empowered, to suspend this act and revive the repealed provisions of the former act. When the
question is before the county court for that tribunal to determine which law shall be in force, it is urge
before us that the power then to be exercised by the court is strictly legislative power, which under
our constitution, cannot be delegated to that tribunal or to any other body of men in the state. In the
present case, the question is not presented in the abstract; for the county court of Saline county,
after the act had been for several months in force in that county, did by order suspend its operation;
and during that suspension the offense was committed which is the subject of the present indictment
. . . ." (See Mitchell vs. State [1901], 134 Ala., 392; 32 S., 687.)
True, the legislature may enact laws for a particular locality different from those applicable to other
localities and, while recognizing the force of the principle hereinabove expressed, courts in may
jurisdiction have sustained the constitutionality of the submission of option laws to the vote of the
people. (6 R.C.L., p. 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.
"They relate to subjects which, like the retailing of intoxicating drinks, or the running at large of cattle
in the highways, may be differently regarded in different localities, and they are sustained on what
seems to us the impregnable ground, that the subject, though not embraced within the ordinary
powers of municipalities to make by-laws and ordinances, is nevertheless within the class of public
regulations, in respect to which it is proper that the local judgment should control." (Cooley on
Constitutional Limitations, 5th ed., p. 148.) So that, while we do not deny the right of local 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, we believe that in matters of general
of general legislation like that which treats of criminals in general, and as regards the general subject
80
of probation, discretion may not be vested in a manner so unqualified and absolute as provided in
Act No. 4221. True, the statute does not expressly state that the provincial boards may suspend the
operation of the Probation Act in particular provinces but, considering that, in being vested with the
authority to appropriate or not the necessary funds for the salaries of probation officers, they thereby
are given absolute discretion to determine whether or not the law should take effect or operate in
their respective provinces, the provincial boards are in reality empowered by the legislature to
suspend the operation of the Probation Act in particular provinces, the Act to be held in abeyance
until the provincial boards should decide otherwise by appropriating the necessary funds. The
validity of a law is not tested by what has been done but by what may be done under its provisions.
(Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C. J., p. 786.)
It in conceded that a great deal of latitude should be granted to the legislature not only in the
expression of what may be termed legislative policy but in the elaboration and execution thereof.
"Without this power, legislation would become oppressive and yet imbecile." (People vs. Reynolds, 5
Gilman, 1.) It has been said that popular government lives because of the inexhaustible reservoir of
power behind it. It is unquestionable that the mass of powers of government is vested in the
representatives of the people and that these representatives are no further restrained under our
system than by the express language of the instrument imposing the restraint, or by particular
provisions which by clear intendment, have that effect. (Angara vs. Electoral Commission [1936], 35
Off. Ga., 23; Schneckenburger vs. Moran [1936], 35 Off. Gaz., 1317.) But, it should be borne in mind
that a constitution is both a grant and a limitation of power and one of these time-honored limitations
is that, subject to certain exceptions, legislative power shall not be delegated.
We conclude that section 11 of Act No. 4221 constitutes an improper and unlawful delegation of
legislative authority to the provincial boards and is, for this reason, unconstitutional and void.
3. It is also contended that the Probation Act violates the provisions of our Bill of Rights which
prohibits the denial to any person of the equal protection of the laws (Act. III, sec. 1 subsec. 1.
Constitution of the Philippines.)
This basic individual right sheltered by the Constitution is a restraint on all the tree grand
departments of our government and on the subordinate instrumentalities and subdivision thereof,
and on many constitutional power, like the police power, taxation and eminent domain. The equal
protection of laws, sententiously observes the Supreme Court of the United States, "is a pledge of
the protection of equal laws." (Yick Wo vs. Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup.
Ct. Rep., 10464; Perley vs. North Carolina, 249 U. S., 510; 39 Sup. Ct. Rep., 357; 63 Law. ed., 735.)
Of course, what may be regarded as a denial of the equal protection of the laws in a question not
always easily determined. No rule that will cover every case can be formulated. (Connolly vs. Union
Sewer Pipe Co. [1902], 184, U. S., 540; 22 Sup. Ct., Rep., 431; 46 Law. ed., 679.) Class legislation
discriminating against some and favoring others in prohibited. But classification on a reasonable
basis, and nor made arbitrarily or capriciously, is permitted. (Finely vs. California [1911], 222 U. S.,
28; 56 Law. ed., 75; 32 Sup. Ct. Rep., 13; Gulf. C. & S. F. Ry Co. vs. Ellis [1897], 165 U. S., 150; 41
Law. ed., 666; 17 Sup. Ct. Rep., 255; Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) The
classification, however, to be reasonable must be based on substantial distinctions which make real
differences; it must be germane to the purposes of the law; it must not be limited to existing
conditions only, and must apply equally to each member of the class. (Borgnis vs. Falk. Co. [1911],
147 Wis., 327, 353; 133 N. W., 209; 3 N. C. C. A., 649; 37 L. R. A. [N. S.], 489; State vs. Cooley, 56
Minn., 540; 530-552; 58 N. W., 150; Lindsley vs. Natural Carbonic Gas Co.[1911], 220 U. S., 61, 79,
55 Law. ed., 369, 377; 31 Sup. Ct. Rep., 337; Ann. Cas., 1912C, 160; Lake Shore & M. S. R. Co. vs.
Clough [1917], 242 U.S., 375; 37 Sup. Ct. Rep., 144; 61 Law. ed., 374; Southern Ry. Co. vs. Greene
[1910], 216 U. S., 400; 30 Sup. Ct. Rep., 287; 54 Law. ed., 536; 17 Ann. Cas., 1247; Truax vs.
Corrigan [1921], 257 U. S., 312; 12 C. J., pp. 1148, 1149.)
81
In the case at bar, however, the resultant inequality may be said to flow from the unwarranted
delegation of legislative power, although perhaps this is not necessarily the result in every case.
Adopting the example given by one of the counsel for the petitioners in the course of his oral
argument, one province may appropriate the necessary fund to defray the salary of a probation
officer, while another province may refuse or fail to do so. In such a case, the Probation Act would
be in operation in the former province but not in the latter. This means that a person otherwise
coming within the purview of the law would be liable to enjoy the benefits of probation in one
province while another person similarly situated in another province would be denied those same
benefits. This is obnoxious discrimination. Contrariwise, it is also possible for all the provincial
boards to appropriate the necessary funds for the salaries of the probation officers in their respective
provinces, in which case no inequality would result for the obvious reason that probation would be in
operation in each and every province by the affirmative action of appropriation by all the provincial
boards. On that hypothesis, every person coming within the purview of the Probation Act would be
entitled to avail of the benefits of the Act. Neither will there be any resulting inequality if no province,
through its provincial board, should appropriate any amount for the salary of the probation officer —
which is the situation now — and, also, if we accept the contention that, for the purpose of the
Probation Act, the City of Manila should be considered as a province and that the municipal board of
said city has not made any appropriation for the salary of the probation officer. These different
situations suggested show, indeed, that while inequality may result in the application of the law and
in the conferment of the benefits therein provided, inequality is not in all cases the necessary result.
But whatever may be the case, it is clear that in section 11 of the Probation Act creates a situation in
which discrimination and inequality are permitted or allowed. There are, to be sure, abundant
authorities requiring actual denial of the equal protection of the law before court should assume the
task of setting aside a law vulnerable on that score, but premises and circumstances considered, we
are of the opinion that section 11 of Act No. 4221 permits of the denial of the equal protection of the
law and is on that account bad. We see no difference between a law which permits of such denial. A
law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and
illegal discrimination, it is within the constitutional prohibitions. (By analogy, Chy Lung vs. Freeman
[1876], 292 U. S., 275; 23 Law. ed., 550; Henderson vs. Mayor [1876], 92 U. S., 259; 23 Law. ed.,
543; Ex parte Virginia [1880], 100 U. S., 339; 25 Law. ed., 676; Neal vs. Delaware [1881], 103 U. S.,
370; 26 Law. ed., 567; Soon Hing vs. Crowley [1885], 113 U. S., 703; 28 Law. ed., 1145, Yick Wo
vs. Hopkins [1886],118 U. S., 356; 30 Law. ed., 220; Williams vs. Mississippi [1897], 170 U. S., 218;
18 Sup. Ct. Rep., 583; 42 Law. ed., 1012; Bailey vs. Alabama [1911], 219 U. S., 219; 31 Sup. Ct.
Rep. 145; 55 Law. ed., Sunday Lake Iron Co. vs. Wakefield [1918], 247 U. S., 450; 38 Sup. Ct. Rep.,
495; 62 Law. ed., 1154.) In other words, statutes may be adjudged unconstitutional because of their
effect in operation (General Oil Co. vs. Clain [1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law.
ed., 754; State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944; Ann. Cas., 1912D, 22). If the
law has the effect of denying the equal protection of the law it is unconstitutional. (6 R. C. L. p. 372;
Civil Rights Cases, 109 U. S., 3; 3 Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra;
State vs. Montgomery, 94 Me., 192; 47 Atl., 165; 80 A. S. R., 386; State vs. Dering, 84 Wis., 585; 54
N. W., 1104; 36 A. S. R., 948; 19 L. R. A., 858.) Under section 11 of the Probation Act, not only may
said Act be in force in one or several provinces and not be in force in other provinces, but one
province may appropriate for the salary of the probation officer of a given year — and have probation
during that year — and thereafter decline to make further appropriation, and have no probation is
subsequent years. While this situation goes rather to the abuse of discretion which delegation
implies, it is here indicated to show that the Probation Act sanctions a situation which is intolerable in
a government of laws, and to prove how easy it is, under the Act, to make the guaranty of the
equality clause but "a rope of sand". (Brewer, J. Gulf C. & S. F. Ry. Co. vs. Ellis [1897], 165 U. S.,
150 154; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255.) lawph!1.net
Great reliance is placed by counsel for the respondents on the case of Ocampo vs. United States
([1914], 234 U. S., 91; 58 Law. ed., 1231). In that case, the Supreme Court of the United States
affirmed the decision of this court (18 Phil., 1) by declining to uphold the contention that there was a
82
denial of the equal protection of the laws because, as held in Missouri vs. Lewis (Bowman vs. Lewis)
decided in 1880 (101 U. S., 220; 25 Law. ed., 991), the guaranty of the equality clause does not
require territorial uniformity. It should be observed, however, that this case concerns the right to
preliminary investigations in criminal cases originally granted by General Orders No. 58. No question
of legislative authority was involved and the alleged denial of the equal protection of the laws was
the result of the subsequent enactment of Act No. 612, amending the charter of the City of Manila
(Act No. 813) and providing in section 2 thereof that "in cases triable only in the court of first instance
of the City of Manila, the defendant . . . shall not be entitled as of right to a preliminary examination
in any case where the prosecuting attorney, after a due investigation of the facts . . . shall have
presented an information against him in proper form . . . ." Upon the other hand, an analysis of the
arguments and the decision indicates that the investigation by the prosecuting attorney — although
not in the form had in the provinces — was considered a reasonable substitute for the City of Manila,
considering the peculiar conditions of the city as found and taken into account by the legislature
itself.
Reliance is also placed on the case of Missouri vs. Lewis, supra. That case has reference to a
situation where the constitution of Missouri permits appeals to the Supreme Court of the state from
final judgments of any circuit court, except those in certain counties for which counties the
constitution establishes a separate court of appeals called St. Louis Court of Appeals. The provision
complained of, then, is found in the constitution itself and it is the constitution that makes the
apportionment of territorial jurisdiction.
We are of the opinion that section 11 of the Probation Act is unconstitutional and void because it is
also repugnant to equal-protection clause of our Constitution.
Section 11 of the Probation Act being unconstitutional and void for the reasons already stated, the
next inquiry is whether or not the entire Act should be avoided.
In seeking the legislative intent, the presumption is against any mutilation of a statute, and
the courts will resort to elimination only where an unconstitutional provision is interjected into
a statute otherwise valid, and is so independent and separable that its removal will leave the
constitutional features and purposes of the act substantially unaffected by the process.
(Riccio vs. Hoboken, 69 N. J. Law., 649, 662; 63 L. R. A., 485; 55 Atl., 1109, quoted in
Williams vs. Standard Oil Co. [1929], 278 U.S., 235, 240; 73 Law. ed., 287, 309; 49 Sup. Ct.
Rep., 115; 60 A. L. R., 596.) In Barrameda vs. Moir ([1913], 25 Phil., 44, 47), this court stated
the well-established rule concerning partial invalidity of statutes in the following language:
. . . where part of the a statute is void, as repugnant to the Organic Law, while another part is
valid, the valid portion, if separable from the valid, may stand and be enforced. But in order
to do this, the valid portion must be in so far independent of the invalid portion that it is fair to
presume that the Legislative would have enacted it by itself if they had supposed that they
could not constitutionally enact the other. (Mutual Loan Co. vs. Martell, 200 Mass., 482; 86
N. E., 916; 128 A. S. R., 446; Supervisors of Holmes Co. vs. Black Creek Drainage District,
99 Miss., 739; 55 Sou., 963.) Enough must remain to make a complete, intelligible, and valid
statute, which carries out the legislative intent. (Pearson vs. Bass. 132 Ga., 117; 63 S. E.,
798.) The void provisions must be eliminated without causing results affecting the main
purpose of the Act, in a manner contrary to the intention of the Legislature. (State vs. A. C. L.
R., Co., 56 Fla., 617, 642; 47 Sou., 969; Harper vs. Galloway, 58 Fla., 255; 51 Sou., 226; 26
L. R. A., N. S., 794; Connolly vs. Union Sewer Pipe Co., 184 U. S., 540, 565; People vs.
Strassheim, 240 Ill., 279, 300; 88 N. E., 821; 22 L. R. A., N. S., 1135; State vs. Cognevich,
124 La., 414; 50 Sou., 439.) The language used in the invalid part of a statute can have no
legal force or efficacy for any purpose whatever, and what remains must express the
83
legislative will, independently of the void part, since the court has no power to legislate.
(State vs. Junkin, 85 Neb., 1; 122 N. W., 473; 23 L. R. A., N. S., 839; Vide, also,. U. S., vs.
Rodriguez [1918], 38 Phil., 759; Pollock vs. Farmers' Loan and Trust Co. [1895], 158 U. S.,
601, 635; 39 Law. ed., 1108, 1125; 15 Sup. Ct. Rep., 912; 6 R.C.L., 121.)
It is contended that even if section 11, which makes the Probation Act applicable only in those
provinces in which the respective provincial boards provided for the salaries of probation officers
were inoperative on constitutional grounds, the remainder of the Act would still be valid and may be
enforced. We should be inclined to accept the suggestions but for the fact that said section is, in our
opinion, is inseparably linked with the other portions of the Act that with the elimination of the section
what would be left is the bare idealism of the system, devoid of any practical benefit to a large
number of people who may be deserving of the intended beneficial result of that system. The clear
policy of the law, as may be gleaned from a careful examination of the whole context, is to make the
application of the system dependent entirely upon the affirmative action of the different provincial
boards through appropriation of the salaries for probation officers at rates not lower than those
provided for provincial fiscals. Without such action on the part of the various boards, no probation
officers would be appointed by the Secretary of Justice to act in the provinces. The Philippines is
divided or subdivided into provinces and it needs no argument to show that if not one of the
provinces — and this is the actual situation now — appropriate the necessary fund for the salary of a
probation officer, probation under Act No. 4221 would be illusory. There can be no probation without
a probation officer. Neither can there be a probation officer without the probation system.
Section 2 of the Acts provides that the probation officer shall supervise and visit the probationer.
Every probation officer is given, as to the person placed in probation under his care, the powers of
the police officer. It is the duty of the probation officer to see that the conditions which are imposed
by the court upon the probationer under his care are complied with. Among those conditions, the
following are enumerated in section 3 of the Act:
That the probationer (a) shall indulge in no injurious or vicious habits;
(b) Shall avoid places or persons of disreputable or harmful character;
(c) Shall report to the probation officer as directed by the court or probation officers;
(d) Shall permit the probation officer to visit him at reasonable times at his place of abode or
elsewhere;
(e) Shall truthfully answer any reasonable inquiries on the part of the probation officer
concerning his conduct or condition; "(f) Shall endeavor to be employed regularly; "(g) Shall
remain or reside within a specified place or locality;
(f) Shall make reparation or restitution to the aggrieved parties for actual damages or losses
caused by his offense;
(g) Shall comply with such orders as the court may from time to time make; and
(h) Shall refrain from violating any law, statute, ordinance, or any by-law or regulation,
promulgated in accordance with law.
The court is required to notify the probation officer in writing of the period and terms of probation.
Under section 4, it is only after the period of probation, the submission of a report of the probation
84
officer and appropriate finding of the court that the probationer has complied with the conditions of
probation that probation may be definitely terminated and the probationer finally discharged from
supervision. Under section 5, if the court finds that there is non-compliance with said conditions, as
reported by the probation officer, it may issue a warrant for the arrest of the probationer and said
probationer may be committed with or without bail. Upon arraignment and after an opportunity to be
heard, the court may revoke, continue or modify the probation, and if revoked, the court shall order
the execution of the sentence originally imposed. Section 6 prescribes the duties of probation
officers: "It shall be the duty of every probation officer to furnish to all persons placed on probation
under his supervision a statement of the period and conditions of their probation, and to instruct
them concerning the same; to keep informed concerning their conduct and condition; to aid and
encourage them by friendly advice and admonition, and by such other measures, not inconsistent
with the conditions imposed by court as may seem most suitable, to bring about improvement in their
conduct and condition; to report in writing to the court having jurisdiction over said probationers at
least once every two months concerning their conduct and condition; to keep records of their work;
make such report as are necessary for the information of the Secretary of Justice and as the latter
may require; and to perform such other duties as are consistent with the functions of the probation
officer and as the court or judge may direct. The probation officers provided for in this Act may act as
parole officers for any penal or reformatory institution for adults when so requested by the authorities
thereof, and, when designated by the Secretary of Justice shall act as parole officer of persons
released on parole under Act Number Forty-one Hundred and Three, without additional
compensation."
It is argued, however, that even without section 11 probation officers maybe appointed in the
provinces under section 10 of Act which provides as follows:
There is hereby created in the Department of Justice and subject to its supervision and
control, a Probation Office under the direction of a Chief Probation Officer to be appointed by
the Governor-General with the advise and consent of the Senate who shall receive a salary
of four eight hundred pesos per annum. To carry out this Act there is hereby appropriated out
of any funds in the Insular Treasury not otherwise appropriated, the sum of fifty thousand
pesos to be disbursed by the Secretary of Justice, who is hereby authorized to appoint
probation officers and the administrative personnel of the probation officer under civil service
regulations from among those who possess the qualifications, training and experience
prescribed by the Bureau of Civil Service, and shall fix the compensation of such probation
officers and administrative personnel until such positions shall have been included in the
Appropriation Act.
But the probation officers and the administrative personnel referred to in the foregoing section are
clearly not those probation officers required to be appointed for the provinces under section 11. It
may be said, reddendo singula singulis, that the probation officers referred to in section 10 above-
quoted are to act as such, not in the various provinces, but in the central office known as the
Probation Office established in the Department of Justice, under the supervision of the Chief
Probation Officer. When the law provides that "the probation officer" shall investigate and make
reports to the court (secs. 1 and 4); that "the probation officer" shall supervise and visit the
probationer (sec. 2; sec. 6, par. d); that the probationer shall report to the "probationer officer" (sec.
3, par. c.), shall allow "the probationer officer" to visit him (sec. 3, par. d), shall truthfully answer any
reasonable inquiries on the part of "the probation officer" concerning his conduct or condition (sec. 3,
par. 4); that the court shall notify "the probation officer" in writing of the period and terms of probation
(sec. 3, last par.), it means the probation officer who is in charge of a particular probationer in a
particular province. It never could have been intention of the legislature, for instance, to require the
probationer in Batanes, to report to a probationer officer in the City of Manila, or to require a
probation officer in Manila to visit the probationer in the said province of Batanes, to place him under
85
his care, to supervise his conduct, to instruct him concerning the conditions of his probation or to
perform such other functions as are assigned to him by law.
That under section 10 the Secretary of Justice may appoint as many probation officers as there are
provinces or groups of provinces is, of course possible. But this would be arguing on what the law
may be or should be and not on what the law is. Between is and ought there is a far cry. The wisdom
and propriety of legislation is not for us to pass upon. We may think a law better otherwise than it is.
But much as has been said regarding progressive interpretation and judicial legislation we decline to
amend the law. We are not permitted to read into the law matters and provisions which are not there.
Not for any purpose — not even to save a statute from the doom of invalidity.
Upon the other hand, the clear intention and policy of the law is not to make the Insular Government
defray the salaries of probation officers in the provinces but to make the provinces defray them
should they desire to have the Probation Act apply thereto. The sum of P50,000, appropriated "to
carry out the purposes of this Act", is to be applied, among other things, for the salaries of probation
officers in the central office at Manila. These probation officers are to receive such compensations
as the Secretary of Justice may fix "until such positions shall have been included in the Appropriation
Act". It was the intention of the legislature to empower the Secretary of Justice to fix the salaries of
the probation officers in the provinces or later on to include said salaries in an appropriation act.
Considering, further, that the sum of P50,000 appropriated in section 10 is to cover, among other
things, the salaries of the administrative personnel of the Probation Office, what would be left of the
amount can hardly be said to be sufficient to pay even nominal salaries to probation officers in the
provinces. We take judicial notice of the fact that there are 48 provinces in the Philippines and we do
not think it is seriously contended that, with the fifty thousand pesos appropriated for the central
office, there can be in each province, as intended, a probation officer with a salary not lower than
that of a provincial fiscal. If this a correct, the contention that without section 11 of Act No. 4221 said
act is complete is an impracticable thing under the remainder of the Act, unless it is conceded that in
our case there can be a system of probation in the provinces without probation officers.
Probation as a development of a modern penology is a commendable system. Probation laws have

been enacted, here and in other countries, to permit what modern criminologist call the
"individualization of the punishment", the adjustment of the penalty to the character of the criminal
and the circumstances of his particular case. It provides a period of grace in order to aid in the
rehabilitation of a penitent offender. It is believed that, in any cases, convicts may be reformed and
their development into hardened criminals aborted. It, therefore, takes advantage of an opportunity
for reformation and avoids imprisonment so long as the convicts gives promise of reform. (United
States vs. Murray [1925], 275 U. S., 347 357, 358; 72 Law. ed., 309; 312, 313; 48 Sup. Ct. Rep.,
146; Kaplan vs. Hecht, 24 F. [2d], 664, 665.) The Welfare of society is its chief end and aim. The
benefit to the individual convict is merely incidental. But while we believe that probation is
commendable as a system and its implantation into the Philippines should be welcomed, we are
forced by our inescapable duty to set the law aside because of the repugnancy to our fundamental
law.
In arriving at this conclusion, we have endeavored to consider the different aspects presented by
able counsel for both parties, as well in their memorandums as in their oral argument. We have
examined the cases brought to our attention, and others we have been able to reach in the short
time at our command for the study and deliberation of this case. In the examination of the cases and
in then analysis of the legal principles involved we have inclined to adopt the line of action which in
our opinion, is supported better reasoned authorities and is more conducive to the general welfare.
(Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) Realizing the conflict of authorities, we have
declined to be bound by certain adjudicated cases brought to our attention, except where the point
or principle is settled directly or by clear implication by the more authoritative pronouncements of the
Supreme Court of the United States. This line of approach is justified because:
86
(a) The constitutional relations between the Federal and the State governments of the United
States and the dual character of the American Government is a situation which does not
obtain in the Philippines;
(b) The situation of s state of the American Union of the District of Columbia with reference to
the Federal Government of the United States is not the situation of the province with respect
to the Insular Government (Art. I, sec. 8 cl. 17 and 10th Amendment, Constitution of the
United States; Sims vs. Rives, 84 Fed. [2d], 871),
(c) The distinct federal and the state judicial organizations of the United States do not
embrace the integrated judicial system of the Philippines (Schneckenburger vs. Moran
[1936], 35 Off. Gaz., p. 1317);
(d) "General propositions do not decide concrete cases" (Justice Holmes in Lochner vs. New
York [1904], 198 U. S., 45, 76; 49 Law. ed., 937, 949) and, "to keep pace with . . . new
developments of times and circumstances" (Chief Justice Waite in Pensacola Tel. Co. vs.
Western Union Tel. Co. [1899], 96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX,
No. 2, Dec. 1919, 141, 142), fundamental principles should be interpreted having in view
existing local conditions and environment.
Act No. 4221 is hereby declared unconstitutional and void and the writ of prohibition is, accordingly,
granted. Without any pronouncement regarding costs. So ordered.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR
AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D.
SACO, respondents.
Jimenea, Dala & Zaragoza Law Office for petitioner.
The Solicitor General for public respondent.
Dizon Law Office for respondent Kathleen D. Saco.
CRUZ, J.:
The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment Administration (POEA)
for the death of her husband. The decision is challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the
case as the husband was not an overseas worker.
87
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and
Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the
complaint was cognizable not by the POEA but by the Social Security System and should have been
filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after
considering the position papers of the parties ruled in favor of the complainant. The award consisted
of P180,000.00 as death benefits and P12,000.00 for burial expenses.
The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal
on the ground of non-exhaustion of administrative remedies.
Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations
Commission, on the theory inter alia that the agency should be given an opportunity to correct the
errors, if any, of its subordinates. This case comes under one of the exceptions, however, as the
questions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondent
himself has not objected to the petitioner's direct resort to this Court, observing that the usual
procedure would delay the disposition of the case to her prejudice.
The Philippine Overseas Employment Administration was created under Executive Order No. 797,
promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to
protect their rights. It replaced the National Seamen Board created earlier under Article 20 of the
Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with
"original and exclusive jurisdiction over all cases, including money claims, involving employee-
employer relations arising out of or by virtue of any law or contract involving Filipino contract
workers, including seamen." These cases, according to the 1985 Rules and Regulations on
Overseas Employment issued by the POEA, include "claims for death, disability and other benefits"
arising out of such employment. 2
The petitioner does not contend that Saco was not its employee or that the claim of his widow is not
compensable. What it does urge is that he was not an overseas worker but a 'domestic employee
and consequently his widow's claim should have been filed with Social Security System, subject to
appeal to the Employees Compensation Commission.
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas
employee of the petitioner at the time he met with the fatal accident in Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined
as "employment of a worker outside the Philippines, including employment on board vessels plying
international waters, covered by a valid contract. 3 A contract worker is described as "any person
working or who has worked overseas under a valid employment contract and shall include
seamen" 4 or "any person working overseas or who has been employed by another which may be a
local employer, foreign employer, principal or partner under a valid employment contract and shall
include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is not disputed that he died
while under a contract of employment with the petitioner and alongside the petitioner's vessel, the
M/V Eastern Polaris, while berthed in a foreign country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit
recognition of the nature of Saco's employment at the time of his death in 1985. The first is its
submission of its shipping articles to the POEA for processing, formalization and approval in the
exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The
second is its payment 8 of the contributions mandated by law and regulations to the Welfare Fund for
88
Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing social and
welfare services to Filipino overseas workers."
Significantly, the office administering this fund, in the receipt it prepared for the private respondent's
signature, described the subject of the burial benefits as "overseas contract worker Vitaliano
Saco." 9 While this receipt is certainly not controlling, it does indicate, in the light of the petitioner's
own previous acts, that the petitioner and the Fund to which it had made contributions considered
Saco to be an overseas employee.
The petitioner argues that the deceased employee should be likened to the employees of the
Philippine Air Lines who, although working abroad in its international flights, are not considered
overseas workers. If this be so, the petitioner should not have found it necessary to submit its
shipping articles to the POEA for processing, formalization and approval or to contribute to the
Welfare Fund which is available only to overseas workers. Moreover, the analogy is hardly
appropriate as the employees of the PAL cannot under the definitions given be considered seamen
nor are their appointments coursed through the POEA.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the
POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984.
This circular prescribed a standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier
been required by the National Seamen Board and had been sustained in a number of cases by this
Court. 10 The petitioner claims that it had never entered into such a contract with the deceased Saco,
but that is hardly a serious argument. In the first place, it should have done so as required by the
circular, which specifically declared that "all parties to the employment of any Filipino seamen on
board any ocean-going vessel are advised to adopt and use this employment contract effective 01
February 1984 and to desist from using any other format of employment contract effective that date."
In the second place, even if it had not done so, the provisions of the said circular are nevertheless
deemed written into the contract with Saco as a postulate of the police power of the State. 11
But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power. It contends that no authority had been given the
POEA to promulgate the said regulation; and even with such authorization, the regulation represents
an exercise of legislative discretion which, under the principle, is not subject to delegation.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No.
797, reading as follows:
... The governing Board of the Administration (POEA), as hereunder provided shall
promulgate the necessary rules and regulations to govern the exercise of the
adjudicatory functions of the Administration (POEA).
Similar authorization had been granted the National Seamen Board, which, as earlier observed, had
itself prescribed a standard shipping contract substantially the same as the format adopted by the
POEA.
The second challenge is more serious as it is true that legislative discretion as to the substantive
contents of the law cannot be delegated. What can be delegated is the discretion to
determine how the law may be enforced, not what the law shall be. The ascertainment of the latter
subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by
the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled
Executive Order No. 626, this Court held:
89
We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall be distributed to charitable institutions and
other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase "may
see fit" is an extremely generous and dangerous condition, if condition it is. It is laden
with perilous opportunities for partiality and abuse, and even corruption. One
searches in vain for the usual standard and the reasonable guidelines, or better still,
the limitations that the officers must observe when they make their distribution. There
is none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen? Only the
officers named can supply the answer, they and they alone may choose the grantee
as they see fit, and in their own exclusive discretion. Definitely, there is here a 'roving
commission a wide and sweeping authority that is not canalized within banks that
keep it from overflowing,' in short a clearly profligate and therefore invalid delegation
of legislative powers.
There are two accepted tests to determine whether or not there is a valid delegation of legislative
power, viz, the completeness test and the sufficient standard test. Under the first test, the law must
be complete in all its terms and conditions when it leaves the legislature such that when it reaches
the delegate the only thing he will have to do is enforce it. 13 Under the sufficient standard test, there
must be adequate guidelines or stations in the law to map out the boundaries of the delegate's
authority and prevent the delegation from running riot. 14
Both tests are intended to prevent a total transference of legislative authority to the delegate, who is
not allowed to step into the shoes of the legislature and exercise a power essentially legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the
Government but is especially important in the case of the legislative power because of the many
instances when its delegation is permitted. The occasions are rare when executive or judicial powers
have to be delegated by the authorities to which they legally certain. In the case of the legislative
power, however, such occasions have become more and more frequent, if not necessary. This had
led to the observation that the delegation of legislative power has become the rule and its non-
delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of the
legislature to cope directly with the myriad problems demanding its attention. The growth of society
has ramified its activities and created peculiar and sophisticated problems that the legislature cannot
be expected reasonably to comprehend. Specialization even in legislation has become necessary.
To many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct and efficacious, not to say, specific solutions. These
solutions may, however, be expected from its delegates, who are supposed to be experts in the
particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their attendant
peculiar problems, the national legislature has found it more and more necessary to entrust to
administrative agencies the authority to issue rules to carry out the general provisions of the statute.
This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute by
"filling in' the details which the Congress may not have the opportunity or competence to provide.
90
This is effected by their promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor Code. These regulations
have the force and effect of law.
Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed
thereby has been applied in a significant number of the cases without challenge by the employer.
The power of the POEA (and before it the National Seamen Board) in requiring the model contract is
not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said
authority. That standard is discoverable in the executive order itself which, in creating the Philippine
Overseas Employment Administration, mandated it to protect the rights of overseas Filipino workers
to "fair and equitable employment practices."
Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest"
in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience
and welfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v.
Auditor General, 18 to mention only a few cases. In the United States, the "sense and experience of
men" was accepted in Mutual Film Corp. v. Industrial Commission, 19 and "national security"
in Hirabayashi v. United States. 20
It is not denied that the private respondent has been receiving a monthly death benefit pension of
P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social
Security System. In addition, as already observed, she also received a P5,000.00 burial gratuity from
the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private
respondent's claim against the petitioner because it is specifically reserved in the standard contract
of employment for Filipino seamen under Memorandum Circular No. 2, Series of 1984, that—
Section C. Compensation and Benefits.—
1. In case of death of the seamen during the term of his Contract, the employer shall
pay his beneficiaries the amount of:
a. P220,000.00 for master and chief engineers
b. P180,000.00 for other officers, including radio operators and

master electrician
c. P 130,000.00 for ratings.
2. It is understood and agreed that the benefits mentioned above shall be separate
and distinct from, and will be in addition to whatever benefits which the seaman is
entitled to under Philippine laws. ...
3. ...
c. If the remains of the seaman is buried in the Philippines, the

owners shall pay the beneficiaries of the seaman an amount not
exceeding P18,000.00 for burial expenses.
The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the
National Seamen Board on July 12,1976, providing an follows:
91
Income Benefits under this Rule Shall be Considered Additional Benefits.—
All compensation benefits under Title II, Book Four of the Labor Code of the
Philippines (Employees Compensation and State Insurance Fund) shall be granted,
in addition to whatever benefits, gratuities or allowances that the seaman or his
beneficiaries may be entitled to under the employment contract approved by the
NSB. If applicable, all benefits under the Social Security Law and the Philippine
Medicare Law shall be enjoyed by the seaman or his beneficiaries in accordance
with such laws.
The above provisions are manifestations of the concern of the State for the working class,
consistently with the social justice policy and the specific provisions in the Constitution for the
protection of the working class and the promotion of its interest.
One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been
denied due process because the same POEA that issued Memorandum Circular No. 2 has also
sustained and applied it is an uninformed criticism of administrative law itself. Administrative
agencies are vested with two basic powers, the quasi-legislative and the quasi-judicial. The first
enables them to promulgate implementing rules and regulations, and the second enables them to
interpret and apply such regulations. Examples abound: the Bureau of Internal Revenue adjudicates
on its own revenue regulations, the Central Bank on its own circulars, the Securities and Exchange
Commission on its own rules, as so too do the Philippine Patent Office and the Videogram
Regulatory Board and the Civil Aeronautics Administration and the Department of Natural Resources
and so on ad infinitum on their respective administrative regulations. Such an arrangement has been
accepted as a fact of life of modern governments and cannot be considered violative of due process
as long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court
of Industrial Relations 21 are observed.
Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor
of the private respondent, in line with the express mandate of the Labor Code and the principle that
those with less in life should have more in law.
When the conflicting interests of labor and capital are weighed on the scales of social justice, the
heavier influence of the latter must be counter-balanced by the sympathy and compassion the law
must accord the underprivileged worker. This is only fair if he is to be given the opportunity and the
right to assert and defend his cause not as a subordinate but as a peer of management, with which
he can negotiate on even plane. Labor is not a mere employee of capital but its active and equal
partner.
WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary
restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

SUPREME COURT
Manila
EN BANC
G.R. No. 111812 May 31, 1995
92
DIONISIO M. RABOR, petitioner,

vs.
CIVIL SERVICE COMMISSION, respondent.
FELICIANO, J.:
Petitioner Dionisio M. Rabor is a Utility Worker in the Office of the Mayor, Davao City. He entered
the government service as a Utility worker on 10 April 1978 at the age of 55 years.
Sometime in May 1991,1 Alma, D. Pagatpatan, an official in the Office of the Mayor of Davao City,
advised Dionisio M. Rabor to apply for retirement, considering that he had already reached the age
of sixty-eight (68) years and seven (7) months, with thirteen (13) years and one (1) month of
government service. Rabor responded to this advice by exhibiting a "Certificate of
Membership"2 issued by the Government Service Insurance System ("GSIS") and dated 12 May
1988. At the bottom of this "Certificate of Membership" is a typewritten statement of the following
tenor: "Service extended to comply 15 years service reqts." This statement is followed by a non-
legible initial with the following date "2/28/91."
Thereupon, the Davao City Government, through Ms. Pagatpatan, wrote to the Regional Director of
the Civil Service Commission, Region XI, Davao City ("CSRO-XI"), informing the latter of the
foregoing and requesting advice "as to what action [should] be taken on this matter."
In a letter dated 26 July 1991, Director Filemon B. Cawad of CSRO-XI advised Davao City Mayor
Rodrigo R. Duterte as follows:
Please be informed that the extension of services of Mr. Rabor is contrary to M.C.
No. 65 of the Office of the President, the relevant portion of which is hereunder
quoted:
Officials and employees who have reached the compulsory

retirement age of 65 years shall not be retained the service, except
for extremely meritorious reasons in which case the retention shall
not exceed six (6) months.
IN VIEW WHEREFORE, please be advised that the services of Mr. Dominador [M.]
Rabor as Utility Worker in that office, is already non-extend[i]ble.3
Accordingly, on 8 August l991, Mayor Duterte furnished a copy of the 26 July 1991 letter of Director
Cawad to Rabor and advised him "to stop reporting for work effective August 16, 1991."4
Petitioner Rabor then sent to the Regional Director, CSRO-XI, a letter dated 14 August 1991, asking
for extension of his services in the City Government until he "shall have completed the fifteen (15)
years service [requirement] in the Government so that [he] could also avail of the benefits of the
retirement laws given to employees of the Government." The extension he was asking for was about
two (2) years. Asserting that he was "still in good health and very able to perform the duties and
functions of [his] position as Utility Worker," Rabor sought "extension of [his] service as an exception
to Memorandum Circular No. 65 of the Office of the President."5 This request was denied by Director
Cawad on 15 August 1991.
93
Petitioner Rabor next wrote to the Office of the President on 29 January 1992 seeking
reconsideration of the decision of Director Cawad, CSRO-XI. The Office of the President referred Mr.
Rabor's letter to the Chairman of the Civil Service Commission on 5 March 1992.
In its Resolution No. 92-594, dated 28 April 1992, the Civil Service Commission dismissed the
appeal of Mr. Rabor and affirmed the action of Director Cawad embodied in the latter's letter of 26
July 1991. This Resolution stated in part:
In his appeal, Rabor requested that he be allowed to continue rendering services as

Utility Worker in order to complete the fifteen (15) year service requirement under
P.D. 1146.
CSC Memorandum Circular No. 27, s. 1990 provides, in part:
1. Any request for extension of service of compulsory retirees to

complete the fifteen years service requirement for retirement shall be
allowed only to permanent appointees in the career service who are
regular members of the Government Service Insurance System
(GSIS) and shall be granted for a period of not exceeding one (1)
year.
Considering that as early as October 18, 1988, Rabor was already due for
retirement, his request for further extension of service cannot be given due
course.6 (Emphasis in the original)
On 28 October 1992, Mr. Rabor sought reconsideration of Resolution No. 92-594 of the Civil Service
Commission this time invoking the Decision of this Court in Cena v. Civil Service
Commission.7 Petitioner also asked for reinstatement with back salaries and benefits, having been
separated from the government service effective 16 August 1991. Rabor's motion for reconsideration
was denied by the Commission.
Petitioner Rabor sent another letter dated 16 April 1993 to the Office of the Mayor, Davao City, again
requesting that he be allowed to continue rendering service to the Davao City Government as Utility
Worker in order to complete the fifteen (15) years service requirement under P.D. No. 1146. This
request was once more denied by Mayor Duterte in a letter to petitioner dated 19 May 1993. In this
letter, Mayor Duterte pointed out that, under Cena grant of the extension of service was discretionary
on the part of the City Mayor, but that he could not grant the extension requested. Mayor Duterte's
letter, in relevant part, read:
The matter was referred to the City Legal Office and the Chairman of the Civil
Service Commission, in the advent of the decision of the Supreme Court in the Cena
vs. CSC, et al. (G.R. No. 97419 dated July 3, 1992), for legal opinion. Both the City
Legal Officer and the Chairman of the Civil Service Commission are one in these
opinion that extending you an appointment in order that you may be able to complete
the fifteen-year service requirement is discretionary [on the part of] the City Mayor.
Much as we desire to extend you an appointment but circumstances are that we can
no longer do so. As you are already nearing your 70th birthday may no longer be
able to perform the duties attached to your position. Moreover, the position you had
vacated was already filled up.
94
We therefore regret to inform you that we cannot act favorably on your

request.8 (Emphases supplied)
At this point, Mr. Rabor decided to come to this Court. He filed a Letter/Petition dated 6 July 1993
appealing from Civil Service Resolution No. 92-594 and from Mayor Duterte's letter of 10 May 1993.
The Court required petitioner Rabor to comply with the formal requirements for instituting a special
civil action of certiorari to review the assailed Resolution of the Civil Service Commission. In turn, the
Commission was required to comment on petitioner's Letter/Petition.9 The Court subsequently noted
petitioner's Letter of 13 September 1993 relating to compliance with the mentioned formal
requirements and directed the Clerk of Court to advise petitioner to engage the services of counsel
or to ask for legal assistance from the Public Attorney's Office (PAO). 10
The Civil Service Commission, through the Office of the Solicitor General, filed its comment on 16
November 1993. The Court then resolved to give due course to the Petition and required the parties
to file memoranda. Both the Commission and Mr. Rabor (the latter through PAO counsel) did so.
In this proceeding, petitioner Rabor contends that his claim falls squarely within the ruling of this
Court in Cena v. Civil Service Commission. 11
Upon the other hand, the Commission seeks to distinguish this case from Cena. The Commission,
through the Solicitor General, stressed that in Cena, this Court had ruled that the employer agency,
the Land Registration Authority of the Department of Justice, was vested with discretion to grant to
Cena the extension requested by him. The Land Registration Authority had chosen not to exercise
its discretion to grant or deny such extension. In contrast, in the instant case, the Davao City
Government did exercise its discretion on the matter and decided to deny the extension sought by
petitioner Rabor for legitimate reasons.
While the Cena decision is barely three (3) years old, the Court considers that it must reexamine the
doctrine of Cena and the theoretical and policy underpinnings thereof. 12
We start by recalling the factual setting of Cena.
Gaudencio Cena was appointed Registrar of the Register of Deeds of Malabon, Metropolitan Manila,
on 16 July 1987. He reached the compulsory retirement age of sixty-five (65) years on 22 January
1991. By the latter date, his government service would have reached a total of eleven (11) years,
nine (9) months and six (6) days. Before reaching his 65th birthday, Cena requested the Secretary of
Justice, through the Administrator of the Land Registration Authority ("LRA") that he be allowed to
extend his service to complete the fifteen-year service requirement to enable him to retire with the
full benefit of an Old-Age Pension under Section 11 (b) of P.D. No. 1146. If Cena's request were
granted, he would complete fifteen (15) years of government service on 15 April 1994, at the age of
sixty-eight (68) years.
The LRA Administrator sought a ruling from the Civil Service Commission on whether or not Cena's
request could be granted considering that Cena was covered by Civil Service Memorandum No. 27,
Series of 1990. On 17 October 1990, the Commission allowed Cena a one (1) year extension of his
service from 22 January 1991 to 22 January 1992 under its Memorandum Circular No. 27.
Dissatisfied, Cena moved for reconsideration, without success. He then came to this Court, claiming
that he was entitled to an extension of three (3) years, three (3) months and twenty-four (24) days to
complete the fifteen-year service requirement for retirement with full benefits under Section 11 (b) of
P.D. No. 1146.
95
This Court granted Cena' s petition in its Decision of 3 July 1992. Speaking through Mr. Justice
Medialdea, the Court held that a government employee who has reached the compulsory retirement
age of sixty-five (65) years, but at the same time has not yet completed fifteen (15) years of
government service required under Section 11 (b) of P.D. No. 1146 to qualify for the Old-Age
Pension Benefit, may be granted an extension of his government service for such period of time as
may be necessary to "fill up" or comply with the fifteen (15)-year service requirement. The Court also
held that the authority to grant the extension was a discretionary one vested in the head of the
agency concerned. Thus the Court concluded:
Accordingly, the Petition is GRANTED. The Land Registration Authority (LRA) and
Department of Justice has the discretion to allow petitioner Gaudencio Cena to
extend his 11 years, 9 months and 6 days of government to complete the fifteen-year
service so that he may retire with full benefits under Section 11, paragraph (b) of
P.D. 1146.13 (Emphases supplied)
The Court reached the above conclusion primarily on the basis of the "plain and ordinary meaning"
of Section 11 (b) of P.D. No. 1146. Section 11 may be quoted in its entirety:
Sec. 11 Conditions for Old-Age Pension. — (a) Old-Age Pension shall be paid to a
member who
(1) has at least fifteen (15) years of service;
(2) is at least sixty (60) years of age; and
(3) is separated from the service.
(b) unless the service is extended by appropriate authorities, retirement shall be

compulsory for an employee at sixty-five-(65) years of age with at least fifteen (15)
years of service; Provided, that if he has less than fifteen (15) years of service, he
shall he allowed to continue in the service to completed the fifteen (15) years.
(Emphases supplied)
The Court went on to rely upon the canon of liberal construction which has often been invoked in
respect of retirement statutes:
Being remedial in character, a statute granting a pension or establishing [a]

retirement plan should be liberally construed and administered in favor of persons
intended to be benefitted thereby. The liberal approach aims to achieve the
humanitarian purposes of the law in order that efficiency, security and well-being of
government employees may be enhanced.14 (Citations omitted)
While Section 11 (b) appeared cast in verbally unqualified terms, there were (and still are) two (2)
administrative issuances which prescribe limitations on the extension of service that may be granted
to an employee who has reached sixty-five (65) years of age.
The first administrative issuance is Civil Service Commission Circular No. 27, Series of 1990, which
should be quoted in its entirety:
96
TO : ALL HEADS OF DEPARTMENTS, BUREAUS AND AGENCIES OF THE

NATIONAL/LOCAL GOVERNMENTS INCLUDING GOVERNMENT- OWNED
AND/OR CONTROLLED CORPORATIONS WITH ORIGINAL CHARTERS.
SUBJECT : Extension of Service of Compulsory Retiree to Complete the Fifteen

Years Service Requirement for Retirement Purposes.
Pursuant to CSC Resolution No. 90-454 dated May 21, 1990, the Civil Service
Commission hereby adopts and promulgates the following policies and guidelines in
the extension of services of compulsory retirees to complete the fifteen years service
requirement for retirement purposes:
1. Any request for the extension of service of compulsory retirees to

complete the fifteen (15) years service requirement for retirement
shall be allowed only to permanent appointees in the career service
who are regular members of the Government Service Insurance
System (GSIS), and shall be granted for a period not exceeding one
(1) year.
2. Any request for the extension of service of compulsory retiree to

complete the fifteen (15) years service requirement for retirement
who entered the government service at 57 years of age or over upon
prior grant of authority to appoint him or her, shall no longer be
granted.
3. Any request for the extension of service to complete the fifteen (15)
years service requirement of retirement shall be filled not later than
three (3) years prior to the date of compulsory retirement.
4. Any request for the extension of service of a compulsory retiree

who meets the minimum number of years of service for retirement
purposes may be granted for six (6) months only with no further
extension.
This Memorandum Circular shall take effect immediately. (Emphases supplied)
The second administrative issuance — Memorandum Circular No. 65 of the Office of the President,
dated 14 June 1988 — provides:
xxx xxx xxx
WHEREAS, this Office has been. receiving requests for reinstatement and/or
retention in the service of employees who have reached the compulsory retirement
age of 65 years, despite the strict conditions provided for in Memorandum Circular
No. 163, dated March 5, 1968, as amended.
WHEREAS, the President has recently adopted a policy to adhere more strictly to the
law providing for compulsory retirement age of 65 years and, in extremely
meritorious cases, to limit the service beyond the age of 65 years to six (6) months
only.
97
WHEREFORE, the pertinent provision of Memorandum Circular No. 163 or on the

retention in the service of officials or employees who have reached the compulsory
retirement age of 65 years, is hereby amended to read as follows:
Officials or employees who have reached the compulsory retirement

age of 65 years shall not be retained in the service, except for
extremely meritorious reasons in which case the retention shall not
exceed six (6) months.
All heads of departments, bureaus, offices and instrumentalities of the government

including government-owned or controlled corporations, are hereby enjoined to
require their respective offices to strictly comply with this circular.
This Circular shall take effect immediately.
By
authorit
y of the
Preside
nt
(Sgd.)
CATAL
INO
MACA
RAIG,
JR.
Executi
ve
Secret
ary
Manila, June 14, 1988.15 (Emphasis supplied)
Medialdea, J. resolved the challenges posed by the above two (2) administrative regulations by,
firstly, considering as invalid Civil Service Memorandum No. 27 and, secondly, by interpreting the
Office of the President's Memorandum Circular No. 65 as inapplicable to the case of Gaudencio T.
Cena.
We turn first to the Civil Service Commission's Memorandum Circular No. 27. Medialdea, J. wrote:
The Civil Service Commission Memorandum Circular No. 27 being in the nature of
an administrative regulation, must be governed by the principle that administrative
regulations adopted under legislative authority by a particular department must be in
harmony with the provisions of the law, and should be for the sole purpose of
carrying into effect its general provisions (People v. Maceren, G.R. No. L-32166,
October 18, 1977, 79 SCRA 450; Teoxon v. Members of the Board of Administrators,
L-25619, June 30, 1970, 33 SCRA 585; Manuel v. General Auditing Office, L-28952,
December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29
SCRA 350). . . . . The rule on limiting to one the year the extension of service of an
employee who has reached the compulsory retirement age of sixty-five (65) years,
98
but has less than fifteen (15) years of service under Civil Service Memorandum
Circular No. 27, S. 1990, cannot likewise be accorded validity because it has no
relationship or connection with any provision of P.D. 1146 supposed to be carried
into effect. The rule was an addition to or extension of the law, not merely a mode of
carrying it into effect. The Civil Service Commission has no power to supply
perceived omissions in P.D. 1146. 16 (Emphasis supplied)
It will be seen that Cena, in striking down Civil Service Commission Memorandum No. 27, took a
very narrow view on the question of what subordinate rule-making by an administrative agency is
permissible and valid. That restrictive view must be contrasted with this Court's earlier ruling
in People v. Exconde, 17 where Mr. Justice J.B.L. Reyes said:
It is well established in this jurisdiction that, while the making of laws is a non-
delegable activity that corresponds exclusively to Congress, nevertheless, the latter
may constitutionally delegate authority and promulgate rules and regulations to
implement a given legislation and effectuate its policies, for the reason that the
legislature often finds it impracticable (if not impossible) to anticipate and provide for
the multifarious and complex situations that may be met in carrying the law into
effect. All that is required is that the regulation should be germane to the objects and
purposes of the law; that the regulation be not in contradiction with it, but conform to
standards that the law prescribes.18 (Emphasis supplied)
In Tablarin v. Gutierrez, 19 the Court, in sustaining the validity of a MECS Order which established
passing a uniform admission test called the National Medical Admission Test (NMAT) as a
prerequisite for eligibility for admission into medical schools in the Philippines, said:
The standards set for subordinate legislation in the exercise of rule making authority
by an administrative agency like the Board of Medical Education are necessarily
broad and highly abstract. As explained by then Mr. Justice Fernando in Edu v.
Ericta (35 SCRA 481 [1970]) —
The standards may be either expressed or implied. If the former, the

non-delegation objection is easily met. The Standard though does not
have to be spelled out specifically. It could be implied from the policy
and purpose of the act considered as a whole. In the Reflector Law,
clearly the legislative objective is public safety. What is sought to be
attained in Calalang v. William is "safe transit upon the roads."
We believe and so hold that the necessary standards are set forth in Section 1 of the
1959 Medical Act: "the standardization and regulation of medical education" and in
Section 5 (a) and 7 of the same Act, the body of the statute itself, and that these
considered together are sufficient compliance with the requirements of the non-
delegation principle.20 (Citations omitted; emphasis partly in the original and partly
supplied)
In Edu v. Ericta, 21 then Mr. Justice Fernando stressed the abstract and very general nature of the
standards which our Court has in prior case law upheld as sufficient for purposes of compliance with
the requirements for validity of subordinate or administrative rule-making:
This Court has considered as sufficient standards, "public welfare," (Municipality of

Cardona v. Municipality of Binangonan, 36 Phil. 547 [1917]); "necessary in the
interest of law and order," (Rubi v. Provincial Board, 39 Phil. 660 [1919]); "public
99
interest," (People v. Rosenthal, 68 Phil. 328 [1939]); and "justice and equity and
substantial merits of the case," (International Hardwood v. Pangil Federation of
Labor, 17 Phil. 602 [1940]). 22 (Emphasis supplied)
Clearly, therefore, Cena when it required a considerably higher degree of detail in the statute to be
implemented, went against prevailing doctrine. It seems clear that if the governing or enabling
statute is quite detailed and specific to begin with, there would be very little need (or occasion) for
implementing administrative regulations. It is, however, precisely the inability of legislative bodies to
anticipate all (or many) possible detailed situations in respect of any relatively complex subject
matter, that makes subordinate, delegated rule-making by administrative agencies so important and
unavoidable. All that may be reasonably; demanded is a showing that the delegated legislation
consisting of administrative regulations are germane to the general purposes projected by the
governing or enabling statute. This is the test that is appropriately applied in respect of Civil Service
Memorandum Circular No. 27, Series of 1990, and to this test we now turn.
We consider that the enabling statute that should appropriately be examined is the present Civil
Service law — found in Book V, Title I, Subtitle A, of Executive Order No. 292 dated 25 July 1987,
otherwise known as the Administrative Code of 1987 — and not alone P.D. No. 1146, otherwise
known as the "Revised Government Service Insurance Act of 1977." For the matter of extension of
service of retirees who have reached sixty-five (65) years of age is an area that is covered by both
statutes and not alone by Section 11 (b) of P.D. 1146. This is crystal clear from examination of many
provisions of the present civil service law.
Section 12 of the present Civil Service law set out in the 1987 Administrative Code provides, in
relevant part, as follows:
Sec. 12 Powers and Functions. — The [Civil Service] Commission shall have the
following powers and functions:
xxx xxx xxx
(2) Prescribe, amend and enforce rules and regulations for carrying into effect the
provisions of the Civil Service Law and other pertinent laws;
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt
plans and programs to promote economical, efficient and effective personnel
administration in the government;
xxx xxx xxx
(10) Formulate, administer and evaluate programs relative to the development and
retention of a qualified and competent work force in the public service;
xxx xxx xxx
(14) Take appropriate action on all appointments and other personnel matters in the
Civil Service including extension of service beyond retirement age;
xxx xxx xxx
100
(17) Administer the retirement program for government officials and employees, and
accredit government services and evaluate qualifications for retirement;
xxx xxx xxx
(19) Perform all functions properly belonging to a central personnel agency and such
other functions as may be provided by law. (Emphasis supplied)
It was on the bases of the above quoted provisions of the 1987 Administrative Code that the Civil
Service Commission promulgated its Memorandum Circular No. 27. In doing so, the Commission
was acting as "the central personnel agency of the government empowered to promulgate policies,
standards and guidelines for efficient, responsive and effective personnel administration in the
government." 23 It was also discharging its function of "administering the retirement program for
government officials and employees" and of "evaluat[ing] qualifications for retirement."
In addition, the Civil Service Commission is charged by the 1987 Administrative Code with providing
leadership and assistance "in the development and retention of qualified and efficient work force in
the Civil Service" (Section 16 [10]) and with the "enforcement of the constitutional and statutory
provisions, relative to retirement and the regulation for the effective implementation of the retirement
of government officials and employees" (Section 16 [14]).
We find it very difficult to suppose that the limitation of permissible extensions of service after an
employee has reached sixty-five (65) years of age has no reasonable relationship or is not germane
to the foregoing provisions of the present Civil Service Law. The physiological and psychological
processes associated with ageing in human beings are in fact related to the efficiency and quality of
the service that may be expected from individual persons. The policy considerations which guided
the Civil Service Commission in limiting the maximum extension of service allowable for compulsory
retirees, were summarized by Griño-Aquino, J. in her dissenting opinion in Cena:
Worth pondering also are the points raised by the Civil Service Commission that
extending the service of compulsory retirees for longer than one (1) year would: (1)
give a premium to late-comers in the government service and in effect discriminate
against those who enter the service at a younger age; (2) delay the promotion of the
latter and of next-in-rank employees; and (3) prejudice the chances for employment
of qualified young civil service applicants who have already passed the various
government examination but must wait for jobs to be vacated by "extendees" who
have long passed the mandatory retirement age but are enjoying extension of their
government service to complete 15 years so they may qualify for old-age
pension. 24 (Emphasis supplied).
Cena laid heavy stress on the interest of retirees or would be retirees, something that is, in itself,
quite appropriate. At the same time, however, we are bound to note that there should be
countervailing stress on the interests of the employer agency and of other government employees as
a whole. The results flowing from the striking down of the limitation established in Civil Service
Memorandum Circular No. 27 may well be "absurd and inequitable," as suggested by Mme. Justice
Griño-Aquino in her dissenting opinion. An employee who has rendered only three (3) years of
government service at age sixty-five (65) can have his service extended for twelve (12) years and
finally retire at the age of seventy-seven (77). This reduces the significance of the general principle
of compulsory retirement at age sixty-five (65) very close to the vanishing point.
The very real difficulties posed by the Cena doctrine for rational personnel administration and
management in the Civil Service, are aggravated when Cena is considered together with the case
101
of Toledo v. Civil Service Commission. 25 Toledo involved the provisions of Rule III, Section 22, of the
Civil Service Rules on Personnel Action and Policies (CSRPAP) which prohibited the appointment of
persons fifty-seven (57) years old or above in government service without prior approval of the Civil
Service Commission. Civil Service Memorandum Circular No. 5, Series of 1983 provided that a
person fifty-seven (57) years of age may be appointed to the Civil Service provided that the
exigencies of the government service so required and provided that the appointee possesses special
qualifications not possessed by other officers or employees in the Civil Service and that the vacancy
cannot be filled by promotion of qualified officers or employees of the Civil Service. Petitioner Toledo
was appointed Manager of the Education and Information Division of the Commission on Elections
when he was almost fifty-nine (59) years old. No authority for such appointment had been obtained
either from the President of the Philippines or from the Civil Service Commission and the
Commission found that the other conditions laid down in Section 22 of Rule III, CSRPAP, did not
exist. The Court nevertheless struck down Section 22, Rule III on the same exceedingly restrictive
view of permissible administrative legislation that Cena relied on.26
When one combines the doctrine of Toledo with the ruling in Cena, very strange results follow.
Under these combined doctrines, a person sixty-four (64) years of age may be appointed to the
government service and one (1) year later may demand extension of his service for the next fourteen
(14) years; he would retire at age seventy-nine (79). The net effect is thus that the general statutory
policy of compulsory retirement at sixty-five (65) years is heavily eroded and effectively becomes
unenforceable. That general statutory policy may be seen to embody the notion that there should be
a certain minimum turn-over in the government service and that opportunities for government service
should be distributed as broadly as possible, specially to younger people, considering that the bulk
of our population is below thirty (30) years of age. That same general policy also reflects the life
expectancy of our people which is still significantly lower than the life expectancy of, e.g., people in
Northern and Western Europe, North America and Japan.
Our conclusion is that the doctrine of Cena should be and is hereby modified to this extent: that Civil
Service Memorandum Circular No. 27, Series of 1990, more specifically paragraph (1) thereof, is
hereby declared valid and effective. Section 11 (b) of P.D. No. 1146 must, accordingly, be read
together with Memorandum Circular No. 27. We reiterate, however, the holding in Cena that the
head of the government agency concerned is vested with discretionary authority to allow or disallow
extension of the service of an official or employee who has reached sixty-five (65) years of age
without completing fifteen (15) years of government service; this discretion is, nevertheless, to be
exercised conformably with the provisions of Civil Service Memorandum Circular No. 27, Series of
1990.
We do not believe it necessary to deal specifically with Memorandum Circular No. 65 of the Office of
the President dated 14 June 1988. It will be noted from the text quoted supra (pp. 11-12) that the
text itself of Memorandum Circular No. 65 (and for that matter, that of Memorandum Circular No.
163, also of the Office of the President, dated 5 March 1968) 27 does not purport to apply only to
officers or employees who have reached the age of sixty-five (65) years and who have at least
fifteen (l5) years of government service. We noted earlier that Cena interpreted Memorandum
Circular No. 65 as referring only to officers and employees who have both reached the compulsory
retirement age of sixty-five (65) and completed the fifteen (15) years of government service. Cena so
interpreted this Memorandum Circular precisely because Cena had reached the conclusion that
employees who have reached sixty-five (65) years of age, but who have less than fifteen (15) years
of government service, may be allowed such extension of service as may be needed to complete
fifteen (15) years of service. In other words, Cena read Memorandum Circular No. 65 in such a way
as to comfort with Cena's own conclusion reached without regard to that Memorandum Circular. In
view of the conclusion that we today reached in the instant case, this last ruling of Cena is properly
regarded as merely orbiter.
102
We also do not believe it necessary to determine whether Civil Service Memorandum Circular No.
27 is fully compatible with Office of the President's Memorandum Circular No. 65; this question must
be reserved for detailed analysis in some future justiciable case.
Applying now the results of our reexamination of Cena to the instant case, we believe and so hold
that Civil Service Resolution No. 92-594 dated 28 April 1992 dismissing the appeal of petitioner
Rabor and affirming the action of CSRO-XI Director Cawad dated 26 July 1991, must be upheld and
affirmed.
ACCORDINGLY, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of
merit. No pronouncement as to costs.
SO ORDERED.
Separate Opinions
PADILLA, J., concurring:
I vote to grant the petition for the same reasons stated in my concurring opinion in Cena vs. CSC
reported in 211 SCRA 192.

SUPREME COURT
Manila
EN BANC
A.M. No. 03-9-02-SC November 27, 2008
RE: ENTITLEMENT TO HAZARD PAY OF SC MEDICAL AND DENTAL CLINIC PERSONNEL.
RESOLUTION
TINGA, J.:
This administrative matter pertains to the latest of the spate of requests of some of the members of the
Supreme Court Medical and Dental Services (SCMDS) Division in relation to the grant of hazard
allowance.
In the Court's Resolution1 of 9 September 2003, the SCMDS personnel were declared entitled to hazard
pay according to the provisions of Republic Act (R.A.) No. 7305, 2 otherwise known as The Magna Carta
of Public Health Workers. The resolution paved the way for the issuance of Administrative Circular No.
57-20043 which prescribed the guidelines for the grant of hazard allowance in favor of the SCMDS
personnel. Now, eleven members of the same office: namely, Ramon S. Armedilla, Celeste P. Vista,
Consuelo M. Bernal, Remedios L. Patricio, Madonna Catherine G. Dimaisip, Elmer A. Ruñez, Marybeth
V. Jurado, Mary Ann D. Barrientos, Angel S. Ambata, Nora T. Juat and Geslaine C. Juan-question the
103
wisdom behind the allocation of hazard pay to the SCMDS personnel at large in the manner provided in
the said circular.
Administrative Circular No. 57-2004 (the subject Circular) initially classified SCMDS employees according
to the level of exposure to health hazards, as follows: (a) physicians, dentists, nurses, medical
technologists, nursing and dental aides, and physical therapists who render direct, actual and frequent
medical services in the form of consultation, examination, treatment and ancillary care, were said to be
subject to high-risk exposure; and (b) psychologists, pharmacists, optometrists, clerks, data encoders,
utility workers, ambulance drivers, and administrative and technical support personnel, to low-risk
exposure.4 Accordingly, employees exposed to high-risk hazards belonging to Salary Grade 19 and
below, and those belonging to Salary Grade 20 and above, were respectively given 27% and 7% of their
basic monthly salaries as hazard allowances; whereas employees open to low-risk hazards belonging to
Salary Grade 20 and above, and Salary Grade 19 and below, were respectively given 5% and 25% of
their basic monthly salaries as hazard allowances.5 This classification, however, was abolished when the
Department of Health (DOH)-after reviewing the corresponding job descriptions of the members of the
SCMDS personnel and the nature of their exposure to hazards-directed that they should all be entitled to
a uniform hazard pay rate without regard for the nature of the risks and hazards to which they are
exposed.6 The dual 25% and 5% hazard allowance rates for all the members of the SCMDS personnel
were retained.
In their Letter7 dated 21 January 2005 addressed to then Chief Justice Hilario Davide, Jr., eleven of the
SCMDS personnel concerned-who claim to be doctors with salary grades higher than 198 and who
allegedly render front-line and hands-on services but receive less hazard allowance allocations than do
those personnel who do not directly deliver patient care-lamented that the classification and the rates of
hazard allowance implemented by the subject Circular seemed to favor only those belonging to Salary
Grade 19 and below, contrary to the very purpose of the grant which is to compensate health workers
according to the degree of exposure to hazards regardless of rank or status. They believe that the grant
must be based
not on the salary grade but rather on the degree of hazard to which they are actually exposed; thus, they
asked for a reexamination of the subject Circular.9
However, even before the request could be acted upon by the Court, Secretary Francisco Duque III
issued Administrative Order (A.O.) No. 2006-001110 on 16 May 2006. The administrative order prescribes
amended guidelines in the payment of hazard pay applicable to all public health workers regardless of the
nature of their appointment. It essentially establishes a 25% hazard pay rate for health workers with
salary grade 19 and below but fixed the hazard allowance of those occupying positions belonging to
Salary Grade 20 and above to P4,989.75 without further increases.11 In view of this development, some
of the SCMDS personnel concerned,12 in another Letter dated 19 December 2007 and addressed to Chief
Justice Reynato S. Puno, suggesting that the subject Circular be amended to conform to A.O. No. 2006-
0011, and that they accordingly be paid hazard pay differentials accruing by virtue thereof. 13
SCMDS Senior Chief Staff Officer Dr. Prudencio Banzon, Jr. indorsed the letter to Deputy Clerk of Court
and Chief Administrative Officer Atty. Eden Candelaria (Atty. Candelaria). 14 On 15 January 2008, Atty.
Candelaria issued a Memorandum 15 finding merit in the request to amend the subject Circular because
A.O. No. 2006-0011 suggests more equitable guidelines on the allocation of hazard allowances among
health workers in the government.16 Accordingly, she recommended that: (a) the classification as to
whether employees are exposed to high or low-risk hazard, as found in the Circular, be abolished and
instead replaced by the fixed rates provided in A.O. No. 2006-0011; and that (b) the payment of the
adjusted hazard allowance be charged against the regular savings of the Court.17
In its Resolution18 dated 22 January 2008, the Court referred Atty. Candelaria's memorandum to the
Fiscal Management and Budget Office (FMBO) and to the Office of the Chief Attorney (OCAT) for
comment.
104
The OCAT posits that the subject Circular may not be amended in accordance with A.O. No. 2006-0011
and in the manner the personnel concerned desire because, first, the mechanics of payment established
by the administrative order is of doubtful validity; and second, the said administrative order has not been
duly published and hence not binding on the Court.19 It also points out that the administrative order does
not conform to Section 21 of R.A. No. 7305 in which the rates of hazard pay are clearly based on salary
grade.20
The FMBO advances a contrary position. It maintains that the subject Circular may be amended
according to the terms of A.O. No. 2006-0011 inasmuch as the latter could put to rest the objection of the
personnel concerned to the allegedly unreasonable and unfair allocation of hazard pay. Additionally, it
recommends that once the amendment is made, the hazard allowances due the SCMDS personnel be
charged against the savings from the regular appropriations of the Court. 21
This Court has to deny the request because the subject Circular cannot be amended according to the
mechanism of hazard pay allocation under AO No. 2006-0011 without denigrating established
administrative law principles.
Essentially, hazard pay is the premium granted by law to health workers who, by the nature of their work,
are constantly exposed to various risks to health and safety.22 Section 21 of R.A. No. 7305 provides:
SEC. 21. Hazard Allowance.-Public health workers in hospitals, sanitaria, rural health units, main
health centers, health infirmaries, barangay health stations, clinics and other health-related
establishments located in difficult areas, strife-torn or embattled areas, distressed or isolated
stations, prison camps, mental hospitals, radiation-exposed clinics, laboratories or disease-
infested areas or in areas declared under state of calamity or emergency for the duration thereof
which expose them to great danger, contagion, radiation, volcanic activity/eruption, occupational
risks or perils to life as determined by the Secretary of Health or the Head of the unit with the
approval of the Secretary of Health, shall be compensated hazard allowances equivalent to at
least twenty-five percent (25%) of the monthly basic salary of health workers receiving salary
grade 19 and below, and five percent (5%) for health workers with salary grade 20 and above.
The implementing rules of R.A. No. 7305 likewise stipulate the same rates of hazard pay. Rule 7.1.5
thereof states:
7.1.5 Rates of Hazard Pay
a. Public health workers shall be compensated hazard allowances equivalent to at least twenty-
five percent (25%) of the monthly basic salary of health workers receiving salary grade 19 and
below, and five percent (5%) for health workers with salary grade 20 and above. This may be
granted on a monthly, quarterly or annual basis. x x x
In a language too plain to be mistaken, R.A. No. 7305 and its implementing rules mandate that the
allocation and distribution of hazard allowances to public health workers within each of the two salary
grade brackets at the respective rates of 25% and 5% be based on the salary grade to which the covered
employees belong. These same rates have in fact been incorporated into the subject Circular to apply to
all SCMDS personnel. The computation of the hazard allowance due should, in turn, be based on the
corresponding basic salary attached to the position of the employee concerned.
To be sure, the law and the implementing rules obviously prescribe the minimum rates of hazard pay due
all health workers in the government, as in fact this is evident in the self-explanatory phrase "at least"
used in both the law and the rules. No compelling argument may thus be offered against the competence
of the DOH to prescribe, by rules or orders, higher rates of hazard allowance, provided that the same fall
within the limits of the law. As the lead agency in the implementation of the provisions of R.A. No. 7305, it
has in fact been invested with such power by Section 35.23 Be that as it may, the question that arises is
105
whether that power is broad enough to vest the DOH with authority to fix an exact amount of hazard pay
accruing to public health workers with Salary Grade 20 and above, deviating from the 5% monthly salary
benchmark prescribed by both the law and its implementing rules.
The DOH possesses no such power.
Fundamental is the precept in administrative law that the rule-making power delegated to an
administrative agency is limited and defined by the statute conferring the power. For this reason, valid
objections to the exercise of this power lie where it conflicts with the authority granted by the legislature. 24
A mere fleeting glance at A.O. No. 2006-0011 readily reveals that the DOH, in issuing the said
administrative order, has exceeded its limited power of implementing the provisions of R.A. No. 7305. It
undoubtedly sought to modify the rates of hazard pay and the mechanism for its allocation under both the
law and the implementing rules by prescribing a uniform rate-let alone a fixed and exact amount-of
hazard allowance for government health workers occupying positions with salary grade 20 and above.
The effect of this measure can hardly be downplayed especially in view of the unmistakable import of the
law to establish a scalar allocation of hazard allowances among public health workers within each of the
two salary grade brackets.
Section 1925 of R.A. No. 7305 recognizes, for its own purposes, the applicability of the provisions of R.A.
No. 675826 (The Salary Standardization Act of 1989) in the determination of the salary scale of all covered
public health workers. Telling is this reference to the scalar schedule of salaries when viewed in light of
the fact that factoring in the salaries of individual employees and the applicable uniform rate of hazard
allowance would yield different results which, when charted against each other, would also bear the
scalar schedule intended by the law.
The object, in other words, of both the law and its implementing rules in providing a uniform rate for each
of the two groups of public health workers is to establish a scalar allocation of the cash equivalents of the
hazard allowance within each of the two groups. A scalar schedule of hazard pay allocation within the
Salary Grade 20 and higher bracket can indeed be achieved only by multiplying the basic monthly salary
of the covered employees by a constant factor that is 25% as the fixed legal rate. Even without an
express reference to the scalar schedule of salaries under R.A. No. 6758, it can nevertheless be inferred
that R.A. No. 7305, by mandating a fixed rate of hazard allowance for each of the two groups of health
workers, intends to achieve the same effect.
Hence, it can only be surmised that the issuance of AO No. 2006-0011 is an attempt to amend the rates
of hazard allowance and the mechanism for its allocation as provided for in R.A. No. 7305 and the
implementing rules because it has the effect of obliterating the intended discrepancy in the cash
equivalents of the hazard allowance for employees falling within the bracket of Salary Grade 20 and
above. Without unnecessarily belaboring this point, the Court finds that the administrative order violates
the established principle that administrative issuances cannot amend an act of Congress. 27 It is void on its
face, but only insofar as it prescribes a predetermined exact amount in cash of the hazard allowance for
public health workers with Salary Grade 20 and above.
Indeed, when an administrative agency enters into the exercise of the specific power of implementing a
statute, it is bound by what is provided for in the same legislative enactment 28 inasmuch as its rule-
making power is a delegated legislative power which may not be used either to abridge the authority
given by the Congress or the Constitution or to enlarge the power beyond the scope intended. 29 The
power may not be validly extended by implication beyond what may be necessary for its just and
reasonable execution.30 In other words, the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying out the provisions of a law, inasmuch as the power
is confined to implementing the law or putting it into effect.31 Therefore, such rules and regulations must
not be inconsistent with the provisions of existing laws, particularly the statute being administered and
implemented by the agency concerned,32 that is to say, the statute to which the issuance relates.
106
Constitutional and statutory provisions control with respect to what rules and regulations may be
promulgated by such a body, as well as with respect to what fields are subject to regulation by it. 33
It must be stressed that the DOH issued the rules and regulations implementing the provisions of R.A.
7305 pursuant to the authority expressly delegated by Congress. Hence, the DOH, as the delegate
administrative agency, cannot contravene the law from which its rule-making authority has emanated. As
the cliché goes, the spring cannot rise higher than its source.34 In this regard, Fisher observes:
x x x The often conflicting and ambiguous passages within a law must be interpreted by executive
officials to construct the purpose and intent of Congress. As important as intent is the extent to
which a law is carried out. President Taft once remarked, "Let anyone make the laws of the
country, if I can construe them."
To carry out the laws, administrators issue rules and regulations of their own. The courts long ago
appreciated this need. Rules and regulations "must be received as the acts of the executive, and
as such, be binding upon all within the sphere of his legal and constitutional authority. Current law
authorizes the head of an executive department or military department to prescribe regulations
"for the government of his department, the conduct of its employees, the distribution and
performance of its business, and the custody, use, and preservation of its records, papers, and
property.
These duties, primarily of a "housekeeping" nature, relate only distantly to the citizenry. Many
regulations, however, bear directly on the public. It is here that administrative legislation must be
restricted in its scope and application. Regulations are not supposed to be a substitute for the
general policymaking that Congress enacts in the form of a public law. Although administrative
regulations are entitled to respect, the authority to prescribe rules and regulations is not
an independent source of power to make laws. Agency rulemaking must rest on authority
granted directly or indirectly by Congress.35 (Emphasis supplied)
Moreover, although an administrative agency is authorized to exercise its discretion in the exercise of its
power of subordinate legislation, nevertheless, no similar authority exists to validate an arbitrary or
capricious enactment of rules and regulations.36 Rules which have the effect of extending or conflicting
with the authority-granting statute do not represent a valid exercise of rule-making power but constitute an
attempt by the agency to legislate.37 In such a situation, it is said that the issuance becomes void not only
for being ultra vires but also for being unreasonable.38 The law therefore prevails over the administrative
issuance.39
The Court takes notice of the fact that the enactment of R.A. No. 7305 has touched off, within the public
health service sector, a surge of negative sentiments regarding the alleged inequitableness and
unfairness of the law-particularly the provisions thereof relating to the allocation of hazard allowances.
Certainly, the DOH can be reasonably expected to respond to the well-meaning clamor of the public
health workers; but while indeed the DOH is entitled to a certain amount of hegemony over the statutes
which it is tasked to administer, it nevertheless may not go far beyond the letter of the law even if it does
perceive that it is acting in the furtherance of the spirit of the law.40
A final note. Just as the power of the DOH to issue rules and regulations is confined to the clear letter of
the law, the Court's hands are likewise tied to interpreting and applying the law. In other words, the Court
cannot infuse vitality, let alone a semblance of validity, to an issuance which on its face is inconsistent
with the law and therefore void, by adopting its terms and in effect implementing the same-lest we
otherwise validate an undue exercise by the DOH of its delegated and limited power of implementation.
Suffice it to say that questions relative to the seeming unfairness and inequitableness of the law are
matters that lie well within the legitimate powers of Congress and are well beyond the competence of the
Court to address.
107
In light of the foregoing, there appears to be no more necessity to discuss the issue of the non-publication
of A.O. No. 2006-0011.
WHEREFORE, the request of the Supreme Court Medical and Dental Services Division to amend
Administrative Circular (A.C.) No. 57-2004 according to the provisions of Department of Health
Administrative Order No. 2006-0011 is DENIED. The Court DIRECTS that the payment of hazard
allowance in favor of the personnel concerned be made in accordance with A.C. No. 57-2004.
SO ORDERED.
108

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12/11/2019 Administrative Law Cases

MAKATI STOCK EXCHANGE, INC. v. SEC and MSE

Republic of the Philippines

G.R. No. 85439 January 13, 1992

KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG

G.R. No. 91927 January 13, 1992

IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E. AGUINALDO,

DAVIDE, JR., J.:

The procedural and factual antecedents are not disputed.

On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality), Metro

G.R. No. 85439

WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA

WHEREAS, the Department of Agriculture is empowered to regulate and supervise

WHEREAS, the on-going financial and management audit of the Department of

WHEREAS, the interest of the public so demanding it is evident and urgently

WHEREAS, it is ordered that the Department of Agriculture in the exercise of its

1. THAT a Management Committee is hereby created composed of

a) Reg. Dir. or OIC RD — DA Region IV

b) Atty. Rogelio P. Madriaga — BACOD

c) Mr. Recto Coronado — KBMBPM

d) Mrs. Nadjasda Ponsones — KBMBPM

e) One (1) from the Municipal Government of Muntinlupa to be

2. THAT the Management Committee shall, upon receipt of this

3. THAT the present Board of Directors is hereby disbanded and the

4. THAT the Management Committee is hereby empowered to

5. THAT the Management Committee shall submit to the undersigned

6. THAT the Management Committee shall call a General Assembly

Done this 28th day of October, 1988 at Quezon City.

(a) Respondent Secretary acted without or in excess of jurisdiction in issuing the

(b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic

Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the

Arraignment was set for 18 October 1989. 52

Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated

We required the respondents to Comment on the petition.

THE ISSUES AND THEIR RESOLUTION

And now on the validity of the assailed Order.

An elected officer, director or committee member may be removed by a vote of

The right of an accused to a preliminary investigation is not among

Independently of the foregoing, the absence of such investigation [preliminary] did

This doctrine was thereafter reiterated or affirmed in several case. 84

The petition then must fail.

WHEREFORE, judgment is hereby rendered:

2. DISMISSING, for lack of merit, the petition in G.R. No. 91927.

Republic of the Philippines

G.R. No. 144463 January 14, 2004

SENATOR ROBERT S. JAWORSKI, petitioner,

The facts may be summarized as follows:

PAGCOR is a government owned and controlled corporation existing under Presidential

SECTION 1. Declaration of Policy. – It is hereby declared to be the policy of the

xxx xxx xxx

b) To establish and operate clubs and casinos, for amusement and

xxx xxx xxx

TITLE IV – GRANT OF FRANCHISE

The issues raised by petitioner are as follows:

I. WHETHER OR NOT RESPONDENT PAGCOR IS AUTHORIZED UNDER P.D. NO. 1869

II. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS

III. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS

A legislative franchise is a special privilege granted by the state to corporations. It is a privilege of

Republic of the Philippines

G.R. No. 93237 November 6, 1992

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,

MANONG POLING DIED INTERMENT TUESDAY 1

1. Juan Alegre is not the real party in interest;